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The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
The Security Interest (Enforcement) Rules, 2002

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Kerala High Court
Union Bank Of India vs The Sub Registrar on 22 December, 2010




WP(C).No. 34636 of 2010(D)

                      ...  Petitioner


                       ...       Respondent





                For Petitioner  :SRI.A.S.P.KURUP, SC, UBI

                For Respondent  :SRI.U.K.DEVIDAS

The Hon'ble MR. Justice C.K.ABDUL REHIM

 Dated :22/12/2010

 O R D E R
                      C.K.ABDUL REHIM, J.
                     W.P.(C).No.34636 of 2010
           Dated this the 22nd day of December, 2010

                           J U D G M E N T


The petitioner is a Nationalised Bank, which had sanctioned a housing loan to the 3rd respondent, to the tune of Rs.12 lakhs, during the year 2007. The 3rd respondent had deposited Ext.P2 title deed of immovable property having an extent of 3.60 Ares comprised in Sy.No.328/3 (old Sy.No.988/1A) of Aluva East Village, creating an equitable mortgage, in order to secure the said loan transaction. Consequent to default committed by the 3rd respondent, the petitioner had initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) and the property in question was sold to the 4th respondent on 27.8.2010. Ext.P4 is the sale certificate issued in this regard and through Ext.P5 the 4th respondent was put in possession of the property.

2. Pursuant to the sale, the petitioner Bank had executed a sale deed in favour of the 4th respondent, which was presented for registration before the 1st respondent. But the 1st respondent had refused to register the document, for the reason that there was an intimation received with respect to an order of attachment issued by the Principal Sub Court, North Parur in W.P.(C).34636/10 -2-

I.A.No.4249/07 in O.S.No.505/07. It was revealed that the above said order of attachment was obtained in a suit filed by the 5th respondent against the 3rd respondent. The order of attachment is dt.3.11.2007. The petitioner Bank is challenging the stand taken by the 1st respondent in refusing registration of document on assigning the reason that there exists an order of attachment issued by the civil court. Eventhough the petitioner submitted Ext.P7 request to the 1st respondent to effect registration of the document, the same was not complied with. Hence the petitioner is seeking directions to the 1st respondent to register the document and also seeking direction against the 2nd respondent to effect mutation in the revenue records with respect to the transfer of the property in question.

3. The issue to be considered is as to whether the Sub Registrar is justified in denying registration on the ground that there exists an order of attachment on the property, issued by a civil court. It is noticed that a similar issue has been considered by this court in two judgments, WP(C).No.22566/10 dt.15.9.2006 and WP(C).7798/10 dt.7.12.2010. Learned Government Pleader had pointed out that there is a circular issued by the Inspector General of Registrations (dt.12.12.2001) to the effect that the Sub Registrar's should make proper endorsements in the Subsidiary Index regarding all intimations with respect to the W.P.(C).34636/10 -3-

court attachments and should insist that information regarding such attachments should be incorporated in the documents concerned. In the judgment in WP(C).22566/06 a learned Judge of this court had considered the validity of the above said circular. It was observed that there is no legal provision obliging a party to a sale deed to include details of encumbrances in the property and is not at an obligation to incorporate such an encumbrance in the sale deed. Therefore it should not be prescribed as a condition for getting the document registered. It is held that the circular in question is without jurisdiction since it has no support of any legal provisions. It is further observed that, even if there is any attachment, the same will continue as an encumbrance on the property and that the sale which will be effected will be subject to such encumbrance. But, existence of such an encumbrance will not affect the right of the party to get sale deed executed and the sale being registered under the provisions of the Indian Registration Act, is the finding.

4. In the judgment in WP(C).7798/2010, while finalising the factual situation in an identical case, another learned Judge of this court observed that, if the attachment was obtained during subsistence of a valid mortgage, and if the person who had obtained the order of attachment has not challenged the sale conducted by the Bank, the claim of such person cannot be held W.P.(C).34636/10 -4-

as valid as against the sale conducted by the Bank. It is observed that in such case, the claim raised by such person can at best be for surplus in the sale proceedings. In the said case also, it was observed that, there is no reason for the registering authority to refuse registration of the sale certificate merely because of the reason that an order of attachment was intimated from the civil court.

5. In the case at hand, inspite of issuance of notice from this court the 5th respondent has not chosen to appear. It is evident from the facts that, the suit in question was filed long after creation of the mortgage and the order of attachment was issued only on 3.11.2007. It is evident that the mortgage was created on 30.4.2007 prior to the order of attachment. Therefore, it is doubtful as to whether the 5th respondent can raise any valid challenge against the sale in question. However, it is explicitly evident that the reason for refusing registration on the basis of intimation regarding the order of attachment, is unsustainable in the eye of law. However, I make it clear that the order of attachment as such will not become inoperative on the basis of registration of documents.

6. Under the above circumstances, the writ petition is disposed of directing the 1st respondent to register the sale deed if any presented either by the petitioner or by the 4th respondent W.P.(C).34636/10 -5-

with respect to the transaction of the property in question on the basis of which Ext.P4 sale certificate was issued, without any further delay.

7. Regarding the prayer for effecting mutation I am of the view that the relief sought for is premature, since the 4th respondent has not yet approached the authority concerned seeking to effect such transfer in the Registry. Needless to say that if any such approach is made, the 2nd respondent shall take appropriate action in accordance with law.