Union Bank of India v. Sub Registrar, Perumbavoor and Others

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE VIJU ABRAHAM** **MONDAY, THE 18[TH] DAY OF MARCH 2024 / 28TH PHALGUNA, 1945** ## **WP(C) NO. 25028 OF 2023** ## **PETITIONER:** **UNION BANK OF INDIA, ASSET RECOVERY BRANCH, 2ND FLOOR, UNION BANK BHAVAN M.G. ROAD, ERNAKULAM 682035 REP. BY ITS CHIEF MANAGER SURESH SACHIDANANDAN** **BY ADVS. ASP.KURUP SADCHITH.P.KURUP C.P.ANIL RAJ SIVA SURESH RESHMA RAJ** ## **RESPONDENTS:** - **1 THE SUB REGISTRAR OFFICE OF SUB REGISTRAR SUB REGISTRY OFFICE, PERUMBAVOOR ERNAKULAM -, PIN - 683542** - **2 THE TAHSILDAR KUNNATHUNADU TALUK OFFICE, PERUMBAVOOR, ERNAKULAM, PIN - 683543** - **3 THE VILLAGE OFFICER PERUMBAVOOR VILLAGE OFFICE ERNAKULAM -, PIN - 683542** - **4 M.P.MATHEW MUTHANADAN, PERUMBAVOOR PO, PIN - 683542** - **5 SUNNY PAULOSE VALLIKKAT, VENGOLA PERUMBAVOOR, PIN - 683556** - **6 JIJO K. JOSE S/O. KOONATHAN CHOURU JOSE, KOONATHAN HOUSE, KDOVAPPADY, EMAKULAM, PIN - 683542** **WP(C) NO.25028/2023** **2** **BY ADVS. SIRAJ K H DIVAKARAN R VINOD JABAR P.SAJEEV(S-62)** **SR.GP - JUSTIN JACOB** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18.03.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C) NO.25028/2023** **3** ## **JUDGMENT** _Dated this the 18[th] day of March, 2024_ The petitioner Bank has filed this writ petition for a direction to the 1[st] respondent Sub Registrar, to efface the attachment effected over the property covered by Ext.P3 and register Ext.P3 sale certificate and to effect transfer of registry of property in the name of the sixth respondent. 2. It is contended that the petitioner is a Nationalised Bank. The petitioner Bank through its Perumbavoor Branch granted an overdraft facility to the limit of Rs.25 lakhs on 11.11.2015. In order to secure credit facilities, the property having an extent of 2.43 Ares in Sy.Nos.56/2 and 56/3 of Perumbavoor Village was mortgaged by the borrower. The mortgage was created on 09.11.2015 as is evident from Ext.P2 memorandum of deposit of title deeds. The Bank initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the SARFAESI Act, 2002) and the property was sold in public **WP(C) NO.25028/2023** **4** auction in favour of the 6[th] respondent as per Ext.P3 sale certificate dated 05.07.2023. Initially there had been an attachment in O.S.No.71 of 2020 by the Munsiff's Court, Perumbavoor on 27.02.2020, but, the suit was subsequently rejected. Thereafter, respondents 4 and 5 obtained attachments over the property as is evident from Exts.P4 and P5 encumbrance certificates on 18.11.2021 and 30.07.2022 respectively. In view of the said attachment, even if the sale certificate is presented for registration, it will not be entertained, contended the learned counsel for the petitioner. Petitioner submits that it is settled law that any attachment pursuant to the mortgage of the property will not affect any proceedings initiated by the Bank under the SARFAESI Act inasmuch as the mortgage was on 09.11.2015 and attachment was on 18.11.2021 and 30.07.2022. 3. A counter affidavit has been filed by the fifth respondent wherein it is contended that owner of the property has obtained Rs.10,00,000/- from the fifth respondent and that he is in possession of the property and **WP(C) NO.25028/2023** **5** has obtained an order of attachment from the civil court. 4. The learned counsel for the petitioner relied on the decision of this Court in **Madhan S. v. Sub Registrar, Kollam and Others** [2014 (1) KHC 249] and the decision of a Division Bench of this Court in **Secretary, Keechery Service Cooperative Bank Ltd. v. Sajitha Nizar alias Sajitha P.M. and Others** , [2020 (5) KHC 231] and contends that the attachment effected subsequent to the creation of equitable mortgage will not affect the right of the Bank to sell the mortgaged property and the attachment has to be effaced 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 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 confirmed in favour of the petitioner. The declaration so sought by the petitioner is therefore granted and I further direct the Sub-Registrar and the Village Officer to efface the attachments effected subsequent to the mortgage from the relevant records._ **WP(C) NO.25028/2023** **6** _Otherwise those attachments would remain as a permanent taboo prejudicially 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. In Keechery Service Co-operative Bank case (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.In the light of the aforesaid declaration of law by this Court the order of dismissal of the petition filed for lifting the attachment ordered under Ext R7 (a) viz., Ext R7 (b) by the Federal Bank would pale into insignificance. 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_ **WP(C) NO.25028/2023** **7** _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”._ Thus it is trite law that attachment effected subsequent to the creation of equitable mortgage does not have any effect on the sale conducted by the Bank under the SARFAESI Act and has to be effaced from the encumbrance register. It is evident from the documents produced in the writ petition that the attachments obtained by respondents 4 and 5 are subsequent to the creation of equitable mortgage by the borrowers in favour of the petitioner. ## 7. This Court in **Phoenic ARC Pvt. Ltd. v. Sub** **Registrar, Feroke** [2023 KHC Online 9452] while considering an identical issue referring to Section 89(5) of the Registration Act, 1908 has held that since the attachment subsequent to creation of equitable mortgage has lost its efficacy and has to be obliterated from the records, the same can be done by the Sub Registrar by filing the certified copy of the order/judgment of this Court in Book No.1 maintained by the Sub Registrar. **WP(C) NO.25028/2023** **8** 8. Accordingly, there will be a direction to the 1[st] respondent to efface the attachment obtained by respondents 4 and 5 noted in Exts.P4 and P5 encumbrance certificates from Book No.1 by filing the certified copy of this judgment in the said book and register Ext.P3 sale certificate if the same is otherwise in order. Respondents 2 and 3 shall thereafter effect mutation of the said property _de hors_ the aforesaid attachments, if there are no other impediments. The Writ Petition is disposed of as above. **Sd/VIJU ABRAHAM JUDGE** csl **WP(C) NO.25028/2023** **9** ## **APPENDIX OF WP(C) 25028/2023** ## **PETITIONER'S EXHIBITS** **Exhibit 1 A TRUE COPY OF THE DEMAND PROMISSORY NOTE DATED 11.11.2015** **Exhibit P2 A TRUE COPY OF THE MEMORANDUM OF DEPOSIT OF TITLE DEED DATED 10.11.2015 EVIDENCING MORTGAGE OF THE PROPERTY** **Exhibit P 3 A TRUE COPY OF THE SALE CERTIFICATE DATED 5.7.2023** **Exhibit P 4 A TRUE COPY OF THE ENCUMBRANCE CERTIFICATE DATED 26.11.2021** **Exhibit P 5 A TRUE COPY OF THE ENCUMBRANCE CERTIFICATE DATED 24/7/2023** **Exhibit P6 A TRUE COPY OF THE JUDGMENT DATED 28.10.2022 PASSED IN OS NO. 71/2020 BY THE MUNSIFF'S COURT, PERUMBAVOOR** **RESPONDENTS' EXHIBITS** **Exhibit R5(1) The true copy of the sale agreement dated 23/12/2019** **Exhibit R5(2) The true copy of the sale agreement dated 1/9/2021** **Exhibit R5(3) The true copy of the sale agreement dated 2/9/2021** **Exhibit R5(4) The true copy of the report submitted by the Advocate Commissioner in OS No. 82/2022 of the Munsiff Court Perumbavoor dated 1/4/2022** **WP(C) NO.25028/2023** **10** **Exhibit R5(5)** **The true copy of the attachment order in OS No. 29/2022 of the sub Court Perumbavoor dated 30/7/2022**