Research › Search › Judgment

Kerala High Court · body

2017 DIGILAW 657 (KER)

SOUTH INDIAN BANK LTD v. SUB REGISTRAR, ERNAKULAM

2017-04-04

SHAJI P.CHALY

body2017
JUDGMENT : This writ petition is filed by the petitioners, namely the South Indian Bank Limited and its authorized officer, seeking direction to the first respondent to register the sale certificate in respect of 8.09 Ares of property comprised in Survey No.738/2 of Elamkulam Village, Kanayannur Taluk in the name of the first petitioner when presented for registration before him by the petitioners, without creating any inhibition, consequent to the attachment effected on the above property by the Subordinate Judges Court, Ernakulam in I.A.No.1920/2016 in O.S.No.104/2016, and also for other related reliefs. 2. Necessary facts for the disposal of the writ petition are as follows:- In this writ petition, petitioners are challenging the illegal refusal of the first respondent to register the sale certificate in respect of an item of property purchased by the bank in the SARFAESI sale conducted by the second petitioner. Various credit facilities were availed by a company, functioning in the name and style of M/s. P.T. Mathai Construction Company Pvt. Ltd. from the first respondent. For securing repayment of the same different items of properties belonging to the borrowers as well as promoters/ directors and their relatives, who are guarantors were mortgaged with the bank. Several items of the secured properties were purchased in SARFAESI auction by the bank on failure to get bidders for the same. One of such items of property is 8.09 Ares situate in Elamkulam Village, Kanayannur Taluk, Ernakulam District. The property was bid in auction in the year, 2014. Equitable mortgage of the property was created in favour of the bank in the year, 2005 by depositing the title documents. The SARFAESI sale was conducted and concluded after the mortgagor failed to get any order against the same in a series of petitions filed before the Debts Recovery Tribunal, Ernakulam and also before this Court. The writ petition filed challenging the same was dismissed by this Court on 17.11.2016. Even though aggrieved, W.A.No.2349/2016 was filed the same was also dismissed. It is submitted, after the dismissal of the aforesaid proceedings second petitioner moved for registration of the sale certificate. The sale price is rupees Four Crores and one Thousand. The stamp duty and registration charges payable for registration will be around Rs.40 lakhs. However, when Encumbrance Certificate was taken it shows an attachment dated 24.11.2016. It is submitted, after the dismissal of the aforesaid proceedings second petitioner moved for registration of the sale certificate. The sale price is rupees Four Crores and one Thousand. The stamp duty and registration charges payable for registration will be around Rs.40 lakhs. However, when Encumbrance Certificate was taken it shows an attachment dated 24.11.2016. Therefore, the second petitioner met the first respondent and discussed about the same and requested for registration of sale certificate without reference to the attachment. However, it was conveyed to the second petitioner that he will not register the sale certificate in view of the attachment. Therefore, the stand taken, according to the petitioners, by the first respondent is illegal and arbitrary. It is also against the law laid down by this Court in Housing Development Finance Corporation Ltd. v. Sub Registrar [ 2011 (3) KLJ 561 and Madhan v. Sub Registrar [ 2014(1) KLT 406 ]. Other contentions are also raised in respect of consequential actions after registration of the document. 3. The 5th respondent has filed a counter affidavit refuting the allegations, claims and demands raised by the petitioners. According to the 5th respondent, going by the pleadings in the writ petition the refusal by the registrar to register the sale certificate in view of the attachment was, admittedly, on or before Ext.P2. The said aspect was confirmed by Ext.P3 reminder letter, and therefore, going by Section 77 of the Registration Act, 1908 a suit ought to have been instituted on or before 28.12.2016 and the right flowing from Section 77 in favour of those claiming under the document, has now been lost by efflux of time. It is also contended that, refusal to register a document is taken care of under Sections 72 and 77 of the Registration Act, 1908 and the attempt of the petitioner is to get over the period of limitation prescribed thereunder. That apart it is also contended that, if the petitioners in any manner affected by attachment order under Order XXXVIII of the Code of Civil Procedure, 1908, remedy is provided under Rule 10 of Order XXXVIII of the CPC and no reasons are assigned by the petitioners for not availing the same remedy. That apart it is also contended that, if the petitioners in any manner affected by attachment order under Order XXXVIII of the Code of Civil Procedure, 1908, remedy is provided under Rule 10 of Order XXXVIII of the CPC and no reasons are assigned by the petitioners for not availing the same remedy. It is also stated that, the attachment effected is not under challenge in this writ petition and the challenge is only with respect to the consequential act done by the registering authority as mandated under Section 89(5) of the Registration Act, 1908. According to the 5th respondent, 5th respondent is taking all steps to challenge the judgment in W.A.No.2349/2016. Other contentions are also raised to canvass the proposition that petitioners have not made out a case warranting interference of this Court exercising the power of judicial review under Article 226 of the Constitution of India. 4. Heard learned senior counsel for the petitioners Sri. K.K. Chandran Pillai, learned Government Pleader Sri. Ron Bastian and learned counsel for the 5th respondent, Sri. Manu Govind. 5. The question to be decided is whether the sale certificate produced by the petitioners is liable to be registered by the first respondent, in view of the attachment order passed by the Sub Ordinate Judges Court, Ernakulam in O.S.No.104/2016. Learned senior counsel for the petitioners made heavy reliance on the judgment rendered by this Court in Madhan. S. v. Sub Registrar Kollam and Others [2014(1) KHC 249, wherein, a learned single Judge of this Court held that "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 consequent 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 same 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. 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. 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" and thereby it was directed to register the sale certificate in a time bound manner. According to the learned senior counsel the said judgment was rendered taking into account the proposition of law laid down in Housing Development Finance Corporation Ltd. (supra) arising under the SARFAESI Act itself, wherein, it was held that "this Court finds that rights and liberties conferred on the creditor/Bank by virtue of mortgage created in the year 2001 and the right to proceed under the relevant provisions of the SARFAESI Act cannot be defeated because of the subsequent attachments ordered by the Civil Courts in 2007-09. As such the sale conducted on 24.11.2010 leading to issuance of Ext.P4 sale certificate is complete in all respects and the title stand conveyed to the second petitioner." 5. Learned single Judge in Madhan.S (supra) relied on a Division Bench judgment of this Curt in Rajalekshmi Amma v. Basheer (2013 KHC 3678) = 2013(4) KLT 443] = [ILR 2013(4) Kerala 385], wherein it was held as follows:- "When a mortgage is created in terms of the provisions of the TP At, it amounts to an encumbrance. An order of attachment before judgment creates no charge, x x x x (omitted as is not relevant to the context). The quality of the mortgage as an encumbrance does not get watered down to be subservient to by an order of attachment by the Civil Court under Code of Civil Procedure. That order of attachment does not override or deserves to be preferred over the rights of a mortgagee or the effect of the mortgage as an encumbrance". 6. Various other judgments were relied on before laying down the law in Madhan S (supra). Therefore, according to the learned senior counsel the law in this regard is well settled. The facts and circumstances of the case reveal that the mortgage was executed by depositing the title deed of the property in question in the year, 2005. 6. Various other judgments were relied on before laying down the law in Madhan S (supra). Therefore, according to the learned senior counsel the law in this regard is well settled. The facts and circumstances of the case reveal that the mortgage was executed by depositing the title deed of the property in question in the year, 2005. The property was purchased by the first petitioner in the auction proceedings in accordance with law on 10.10.2014. However, the attachment in question was secured in the suit proceedings in a suit filed in the year, 2016. Therefore, it is unequivocally clear that a charge was created over the property much prior to securing the attachment of the property in the year, 2016. The sale proceedings also took place prior to the attachment ordered by the court. Therefore, the principle of law laid down by this Court referred to above applies clearly to the facts and circumstances of this case. 7. Now, the question arises whether there is any statutory inhibition created as per the provisions of the Registration Act, 1908 as contended by the 5th respondent. According to the learned counsel for the 5th respondent, in accordance with the pleadings in the writ petition it is clear that, the document was returned by the Sub Registrar without registering, and therefore, a statutory remedy is available to the petitioner under Section 72 of the Registration Act, 1908. Having not resorted to such a course of action the writ petition is not maintainable under law. That apart, it is contended that, if in any case of failure, under Section 72, Section 77 of the said Act itself provides a further remedy of filing a suit. Therefore, the contention of the learned counsel for the 5th respondent is that, when a track is provided under the Act, the petitioners were duty bound to proceed in accordance with the said provisions of the Registration Act, 1908. In this regard learned counsel has relied on a Division Bench judgment of this Court in District Executive Officer v. Abel (2006 KHC 705). In this regard learned counsel has relied on a Division Bench judgment of this Court in District Executive Officer v. Abel (2006 KHC 705). That apart learned counsel also contended that, since a period of limitation is prescribed under the Registration Act, 1908 in order to entertain an appeal and the period prescribed thereunder is over, petitioners have no statutory remedy created under law and therefore, the attempt of the petitioners is to get over the limitation prescribed under the Registration Act, 1908. In order to canvass the said proposition of law, judgments rendered by this Court in T. Krishnan and another v. State of Kerala and Others (2007 KHC 3367), and Thomas Thomas and Another v. Kottayam Municipality and Another [2008(4)KHC 26 etc., etc. are relied on. 8. However, first of all from the facts narrated it is evident and clear that, there is no order passed by the first respondent, by which the document submitted for registration, was returned. The pleadings put forth by the petitioner is that when the second respondent discussed the first petitioner with respect to the registration of sale certificate, the first respondent has expressed his inability, consequent to the attachment order passed. Now, on a reading of Section 72 of the Registration Act, it is clear that an appeal under Section 72 can be preferred, from an order of a Sub Registrar refusing to admit the document to registration, if preferred within 30 days from the date of the order. Therefore, it is convincingly clear that, there is no order passed by the Sub Registrar enabling the petitioners to prefer an appeal under Section 72. Moreover it is well settled and apposite that merely because there is a statutory remedy available under law, the right conferred on the petitioner under Article 226 of the Constitution of India cannot be taken away, if and when there are sufficient grounds for the petitioner to resort to the said constitutional provision. When a law is laid down by this Court in respect of the issue of registration of documents on the basis of SARFAESI proceedings, Government functionary is duty bound to follow the same. When such a course is not adopted, the action of the statutory authority becomes illegal and arbitrary. Therefore, in my considered opinion petitioners are entitled to invoke the jurisdiction conferred on this Court under Article 226 of the Constitution of India. When such a course is not adopted, the action of the statutory authority becomes illegal and arbitrary. Therefore, in my considered opinion petitioners are entitled to invoke the jurisdiction conferred on this Court under Article 226 of the Constitution of India. In that view of the matter also it cannot be said that the writ petition was filed by the petitioners to get over the limitation contained under Sections 72 and 77 of the Registration Act. In that view of the matter the proposition of law laid down by this Court in the aforequoted judgments have no bearing to the facts and circumstances of this case. Apart from all these, so far as the proceedings against the property is concerned, to the knowledge of this Court as on today the proceedings have become final and conclusive. Therefore, the authority of the 5th respondent to question the registration of sale certificate is bleak. 8. Taking into account all these aspects and reckoning the law in the subject as discussed above I have no hesitation to hold that petitioners are entitled to succeed in this writ petition. Consequentially there will be a direction to the second respondent to register the sale certificate, if the same is produced within three weeks from the date of receipt of a copy of this judgment. 9. Be that as it may, question remains to be considered is whether as held by this Court in Madhan. S (supra) the attachment registered by the first respondent can be effaced or not. Learned counsel for the 5th respondent, in that regard invited by attention to three judgments of a learned single Judge of this Court rendered in W.P.(C)No.31316/2014, W.P.(C) No.25488/2014 and W.P.(C)No.33319/2014 dated 24.11.2014, 13.10.2014 and 11.12.2014, respectively. I find from the facts and circumstances of the case that, the said writ petitions were filed after the registration of the sale certificate, and seeking to remove only the attachment registered by the concerned Sub Registrars. However, in this case, the petitioners have made a specific prayer to efface the attachment ordered by the Sub Ordinate Judges Court, Ernakulam in I.A.No.1920/2016 in O.S.No.104/2016. However, in this case, the petitioners have made a specific prayer to efface the attachment ordered by the Sub Ordinate Judges Court, Ernakulam in I.A.No.1920/2016 in O.S.No.104/2016. In the aforesaid three judgments learned single Judge was of the opinion that to remove the attachment there is a specific provision conferred under Rule 10 of Order XXXVIII of the CPC and therefore, the petitioners were directed to approach the said court and get the attachment released enabling the concerned Sub Registrar to consequentially efface the same from the relevant book kept in the office of the Sub Registrar. In my considered opinion since specific prayer is sought for by the petitioners in this writ petition along with the main relief, to efface the attachment, there is no prohibition standing in the way of this Court to issue such a direction invoking the power conferred under Article 226 of the Constitution of India since it is found that the sale certificate in favour of the petitioners are entitled to be registered before the office of the Sub Registrar. More over, the said relief sought for, is only a consequential one to the main relief and therefore, justice demands this Court to grant it, especially in view of the law laid down in Madhan (supra). More over when a sale is effected on the basis of a charge created over the property, the subsequent attachment has no legal sustenance. In that view of the matter, I have no hesitation to direct the respondents to efface the noting of the attachment in I.A.No.1920/2016 in OS No. 104/2016 of the Subordinate Judges Court, Ernakulam from the revenue records. Accordingly I direct respondents 1 and 3 to efface the attachment from the concerned records of the respective offices. 10. Yet another prayer sought for by the petitioners is in respect of mutation to be effected to the property. Needless to say, if any such application is forwarded from the office of the first respondent/filed by the petitioner, I have no reason to think that, the third respondent or any other officer empowered under the Transfer of Registry Rules will not carry out the same, in accordance with law, if there are no other legal impediments standing in the way other than the subject matter discussed above. Writ petition is allowed, accordingly.