Union Bank of India v. Sub Registrar Office Alangad Sub Registry; Tahsildar Paravur Taluk Office; Village Officer Kadungallur; Deputy Commissioner (WCT & LT), Commercial Taxes Department; Regional Transport Officer, Ernakulam; and Others

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN`** ``` TUESDAY, THE 31[ST] DAY OF OCTOBER 2023 / 9TH KARTHIKA, 1945 WP(C) NO. 17236 OF 2023 ``` ## **`PETITIONER:`** ``` UNION BANK OF INDIA ASSET RECOVERY BRANCH 2ND FLOOR, UNION BANK BHAVAN M.G. ROAD, ERNAKULAM REPRESENTED BY ITS CHIEF MANAGER SURESH SACHIDANANDAN, PIN – 682 035. ``` ``` BY ADVS. ASP.KURUP SADCHITH.P.KURUP C.P.ANIL RAJ SIVA SURESH RESHMA RAJ ``` ## **`RESPONDENTS:`** - **`1 THE SUB REGISTRAR OFFICE OF THE SUB REGISTRAR ALANGAD SUB REGISTRY, KADUNGALLUR ROAD VARAPPUZHA, ERNAKULAM, PIN – 683 518.`** - **`2 THE TAHSILDAR PARAVUR TALUK OFFICE POLICE STATION ROAD, NORTH PARAVUR ERNAKULAM, PIN – 683 513.`** - **`3 THE VILLAGE OFFICER KADUNGALLUR VILLAGE OFFICE KADUNGALLUR, ERNAKULAM, PIN – 683 110.`** - **`4 THE DEPUTY COMMISSIONER OFFICE OF THE DEPUTY COMMISSIONER WORKS CONTRACT & LUXURY TAX COMMERCIAL TAX DEPARTMENT OLD RAILWAY STATION ROAD KACHERIPADY, ERNAKULAM, PIN – 682 018.`** - **`5 THE REGIONAL TRANSPORT OFFICER RTO OFFICE, PERIYAR NAGAR ALUVA, PIN – 683 101.`** ``` WP(C).No.17236 OF 2023 ``` ``` 2 ``` |**`6`**|**`SASI P.S`**| |---|---| ||**`S/O. SREEDHARAN`**| ||**`PULIKKAPARAMBU, MUPPATHADAM`**| ||**`MUPPATHADAM JUNCTION KADUNGALLOOR,`**| ||**`MUPPATHADAM P.O`**| ||**`ERNAKULAM, PIN – 683 110.`**| |**`7`**|**`VALSA P.R`**| ||**`D/O. ROCKEY PANACKAL`**| ||**`ACHAMBAVA, 18/1600A,`**| ||**`ARAKKAL HOUSE, PALLICHAL ROAD,`**| ||**`THOPPUMPADY P.O,`**| ||**`ERNAKULAM, PIN – 682 005.`**| ||**`SMT. DEEPA - GP`**| ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 31.10.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` WP(C).No.17236 OF 2023 ``` ``` 3 ``` ## **`JUDGMENT`** One Karthik Constructions availed credit facilities from the petitioner, a Nationalised Bank, in the year 2007 after creating equitable mortgage by deposit of title deed on 07.12.2007. Since the borrower defaulted payment of installments, the Bank initiated proceedings under the SARFAESI Act and the secured assets were sold in auction to respondents 6 and 7 as per Exts.P2 and P3 sale certificates respectively. When the auction purchasers took steps to register the sale certificates, the 1[st] respondent Sub Registrar refused to register the same on the ground that there are attachments from civil courts as well as revenue recovery proceedings against the mortgaged properties. 2. The petitioner submits that, all the attachments and the revenue recovery proceedings are ``` WP(C).No.17236 OF 2023 ``` ``` 4 ``` subsequent to the creation of equitable mortgage. The petitioner has produced Ext.P5 proceedings of the Additional District Court, North Paravur in E.P No.4 of 2013 in ACP No.5781/2013 wherein an order of attachment dated 29.06.2013 has been passed by the said Court. According to the petitioner, the execution petition was dismissed on 01.01.2018 and therefore, the same cannot stand in the way of the 1[st] respondent registering the sale certificates. It is also stated that the attachment effected by the Munsiff Court, Palakkad dated 18.06.2019 in O.S No.663/2017 subsequent to the creation of the equitable mortgage also cannot be an impediment for registration of the sale certificate as the suit itself was dismissed on 05.03.2022 as evident from Ext.P6. 3. The petitioner then refers to Ext.P7 requisition dated 09.03.2017 of the 4[th] respondent, the Deputy Commissioner, Commercial Taxes Department, ``` WP(C).No.17236 OF 2023 ``` ``` 5 ``` for recovery of sales tax arrears for the assessment year 2013 – 2014. According to the petitioner, the said liability cannot affect the registration of sale certificates since the requisition is subsequent to the date of creation of equitable mortgage. Ext.P8 dated 07.03.2018 issued by the 5[th] respondent, the Regional Transport Officer, is another requisition for recovery of arrears of motor vehicle tax due from the borrower, which is also subsequent to the creation of equitable mortgage. The learned counsel for the petitioner submits that above attachments and entries in the encumbrance certificate subsequent to the creation of equitable mortgage have to be effaced. 4. The learned counsel for the petitioner relying on the decision in Madhan S. v. Sub Registrar, Kollam and Others [2014 (1) KHC 249: 2014 (1) KLT 406: ILR 2014 (1) Ker.586: 2014 (1) KLJ 483: AIR 2014 Ker.54] and the decision of a Division Bench of this ``` WP(C).No.17236 OF 2023 ``` ``` 6 ``` - Court in Secretary, Keechery Service Co operative Bank Ltd. v.Sajitha Nizar alias Sajitha P.M. and Others [2020 (5) KHC 231: ILR 2020 (4) Ker.249: 2020(6) KLT 68: 2020(4) KLJ 970] contends that the attachment effected by civil courts subsequent to the creation of equitable mortgage shall not affect the right of the Bank to sell the mortgaged property and the 1[st] respondent has to efface the attachment from the encumbrance register. 5. In Madhan's case (supra), this Court held in paragraph 9 as follows: **“9. The preponderance of judicial opinion leads to the irresistible conclusion that the sale of the mortgaged property in favour of the petitioner under Ext. P5 sale certificate under the Act is free of all encumbrances. The attachments effected subsequent to the mortgage created in favour of the bank do not affect the title and ownership of the petitioner over the subject property. Such attachments have no impact** ``` WP(C).No.17236 OF 2023 ``` ``` 7 ``` **on the sale conducted under the Act and the same ceases to have any effect or fall to the ground the moment the sale is petitioner. The confirmed in favour of the declaration so sought by the petitioner is therefore granted and I further direct the SubRegistrar and the Village Officer to efface the attachments effected subsequent to the mortgage from the relevant records. Otherwise those attachments would remain as a permanent taboo prejudicial affecting the marketability and title to the property even though they ceased to have any legal efficacy. The needful in relation to the property bought by the petitioner shall be done within a period of two months from the date of receipt of a copy of this judgment.”** 6. A Division Bench of this Court in Ali Asharaf M.M. and Another v . Sub Registrar, Thrissur (Judgment dated 24.7.2015 in W.A. No.612/2015) has affirmed the law laid down in Madhan's case (supra). 7. In Keechery Service Co-operative Bank case ``` WP(C).No.17236 OF 2023 ``` ``` 8 ``` (supra), another Division Bench of this Court also affirmed the law laid down in Madhan's case (supra) and held in paragraph 7 as under: **“7. …. We do not find any reason to disagree with the declaration of law in Madhan's case (supra) which was virtually affirmed by the Division Bench in Ali Asharaf's case (supra). In the said circumstances and taking note of the fact that the orders of attachment of the property in question were after the creation of equitable mortgage of the same with Federal Bank we do not find any reason to interfere with the impugned judgment passed by the learned Single Judge following the dictum in Madhan's case (supra), carrying the directions to effect mutation of the property as also to efface all encumbrance over the property effected after 27/06/2014, the date on which the property in question was mortgaged with Federal Bank”.** 8. It is thus trite law that all attachments effected by courts subsequent to the creation of ``` WP(C).No.17236 OF 2023 ``` ``` 9 ``` equitable mortgage cannot have any effect on the sale conducted by the Bank under the SARFAESI Act and have to be effaced from the encumbrance register. 9. With regard to the attachments under the Kerala Revenue Recovery Act pursuant to the requisitions made by the Commercial Taxes Department and the Motor Vehicle Department for recovering the Kerala Value Added Tax (for short, 'the KVAT') and Motor Vehicle Tax respectively, it is to be noted that those attachments are subsequent to the creation of equitable mortgage by the borrower in favour of the petitioner. From Exts.P7 and P8 requisitions, it can be seen that Ext.P7 is of the year 2017 for the recovery of amounts due from the borrower towards arrears of KVAT for the assessment year 2013-2014 and Ext.P8 dated 07.03.2018 pertains to recovery of Motor Vehicle Tax. A Division Bench of this Court in **Tahsildar (RR), Taluk Office,** ``` WP(C).No.17236 OF 2023 ``` ``` 10 ``` **Kollam v. Nizamudeen** [2023 (1) KHC 248 : ILR 2023 (1) KER.365] has held that the statutory charge created as per the provisions of the KVAT Act, 2003, prior to any mortgage made, would remain in tact even if the property is sold by the Bank, under the SARFAESI Act, till such time the encumbrances are cleared as per the provisions of the said enactments. In the present case, the charge created as per the provisions of the KVAT Act and the Motor Vehicles Taxation Act are subsequent to the creation of equitable mortgage and therefore get effaced for the purpose of registration of the sale certificates and for mutation of the properties. 9. Accordingly, there will be a direction to the 1[st] respondent to efface the entries regarding court and revenue recovery attachments in respect of the properties measuring 4.05 Ares & 1.21 Ares, both in Survey No.49/6 of Kadungallur Village, from Book No.1 ``` WP(C).No.17236 OF 2023 ``` ``` 11 ``` maintained in terms of Section 51 of the Registration Act, 1908. There will be a further direction to the 1[st] respondent to register Exts.P2 and P3 sale certificates as and when presented for registration, if they are otherwise in order. On registration of Exts.P2 and P3 sale certificates respondents 2 and 3 shall effect mutation of the properties covered by Exts.P2 and P3 in the name of respondents 6 and 7 de hors the aforesaid attachments. The writ petition is disposed of with the above directions. ## **`Sd/-`** ``` MURALI PURUSHOTHAMAN JUDGE ``` SPR ``` WP(C).No.17236 OF 2023 ``` ``` 12 ``` ## **`APPENDIX`** ## **`PETITIONER’S EXHIBITS:-`** ``` EXHIBIT P1A TRUE COPY OF THE MEMORANDUM OF DEPOSIT OF TITLE DEED DATED 07.12.2007 EVIDENCING MORTGAGE OF THE PROPERTY. EXHIBIT P2A TRUE COPIES OF THE SALE CERTIFICATES IN THE NAME OF 6TH AND 7TH RESPONDENTS RESPECTIVELY DATED 24.03.2023. ``` ``` EXHIBIT P3A TRUE COPY OF THE SALE CERTIFICATE IN THE NAME OF 7TH RESPONDENT DATED 24.03.2023. ``` ``` EXHIBIT P4A TRUE COPY OF THE ENCUMBRANCE CERTIFICATE DATED 31.03.2023 OF ALANGAD SUB REGISTRY. ``` ``` EXHIBIT P5A TRUE COPY OF THE PROCEEDINGS AS MAINTAINED IN THE E-COURTS PORTAL. EXHIBIT P6A TRUE COPY OF THE JUDGMENT IN OS 663/2017 ON THE MUNSIFF COURT PALAKKAD DATED 05.03.2022. EXHIBIT P7A TRUE COPY OF THE REQUISITION ISSUED BY THE 4TH RESPONDENT. EXHIBIT P8A TRUE COPY OF THE REQUISITION ISSUED BY THE 5TH RESPONDENT. ``` ## **`RESPONDENTS EXHIBITS: NIL.`**