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2025 DIGILAW 1577 (TS)

Federal Bank Ltd. v. State of Telangana

2025-11-20

K.SARATH

body2025
ORDER : 1. Heard learned counsel for the petitioner and learned Assistant Government Pleader for Stamps and Registration appearing for the respondent Nos.1 to 5 and perused the material on record. 2. The personal notice sent to the respondent Nos.6 to 9 was returned with an endorsement that ‘addressee left without instructions’ and learned Counsel for the petitioner filed return covers along with proof of service. In view of the same, service of notice sent to the respondent Nos.6 to 9 deemed to be served. 3. Learned Counsel for the petitioner submits that the petitioner is questioning the action of the respondent No.5 in not deleting the subject property situated as all that the Flat No.G-17, in ground Floor of “Venkatadhri Heights” Block-E, admeasuring 1516 square feet of plinth area (including common areas) and car parking, with undivided share of land admeasuring 42 Square Yards or 35.11 Square Meters, out of total admeasuring Ac.4.31 guntas together with all the building and structures thereon and all plant and machinery attached to the earth or permanently fastened to anything attached to the earth both present and future and all other improvements thereon in Survey Nos.754 and 755, situated at Korremula Village, Chowdariguda Gram Panchyat, Ghatkesar Mandal, Medchal-Malkajigiri District, Telangana, under S.R.O., Narapally, from the prohibitory list as illegal and arbitrary and consequently direct the respondent No.5 to delete the subject property from the prohibitory list and register the sale deed in favour of the successful bidder. 4. Learned counsel for the petitioner further submits that the respondent Nos.6 and 7 have obtained mortgage loan of an amount of Rs.46,50,000/- vide Account No.13957600005926 Sanction Order dated 20.01.2023 from the petitioner Company by mortgaging the subject house property of the respondent No.6 by way of registered Memorandum of Deposit of Title Deed vide Doc.No.778/2023 dated 24.01.2023 registered in the office of the Sub-Registrar, Narapally. 5. Learned counsel for the petitioner further submits that in view of default in payment, the petitioner- Company initiated proceedings under provisions of Section 14 of SARFAESI Act and took over the possession of the property and later the petitioner- Company brought the mortgaged property for auction by way of paper publication for possession notice on 27.10.2023 and issued notice for auction. As the subject property is reflected in prohibitory list of the Sub-Registrar, Narapally, the interested buyers did not participate in the auction and withdrawn from auction. As the subject property is reflected in prohibitory list of the Sub-Registrar, Narapally, the interested buyers did not participate in the auction and withdrawn from auction. He further submits that the respondent No.8 filed O.S.No.301 of 2023 before the XI Additional Chief Judge, City Civil Court, Hyderabad, arraying the respondent Nos.6 and 9 herein as defendants therein for recovery of an amount of Rs.80,00,000/- and the respondent No.8 herein also filed I.A.No.1412 of 2023 in the said suit and the XI Additional Chief Judge, City Civil Court, Hyderabad, has allowed the attachment prayed for and issued a Warrant of Attachment before Judgment on 20.07.2023 in the said I.A.No.1412 of 2023 attaching the three properties including the property mortgaged by the respondent No.6 herein and pursuant the said orders, the subject mortgaged property was incorporated in the prohibitory list. 6. Learned counsel for the petitioner further submits that the action of respondent No.5 is contrary to the Orders passed by this Court in City Union Bank Limited Vs. Sub Registrar, Peddapalli and Others , 2018 (5) ALT 279 and the same is followed by another Division Bench of this Court in W.P.No.38125 of 2018 dated 14.10.2019 and requested to direct the respondent No.5 to register the sale deed to be issued in favour of the successful bidder. 7. On the other hand, learned Assistant Government Pleader for Stamps and Registration submits that as per the orders of the XI Additional Chief Judge, City Civil Court, Hyderabad in I.A.No.1412 of 2023 in O.S.No.301 of 2023 dated 20.07.2023, the respondents herein have entered the subject property in prohibitory list and in view of the provisions of the Registration Act, 1908, the respondent No.5- The Sub-Registrar, Narapally is not empowered to delete the subject property from the prohibitory list and requested to dismiss the writ petition. 8. After hearing both sides and perusing the material on record, this Court is of the considered view that there is no dispute with regard to the mortgage of the subject property by the respondent Nos.6 and 7 with the petitioner Company and in view of their default in payment of loan amount, the petitioner by following due procedure contemplated under SARFAESI Act brought the subject property for auction, however, as the property was incorporated in the prohibitory list, the interest buyers did not participate in the auction and withdrawn from the auction. Now the respondent No.5 refused to delete the subject property from the prohibitory list on the pretext of the attachment order in I.A.No.1412 of 2023 in O.S.No.301 of 2023 dated 20.07.2023. The said action of the respondent No.5 is contrary to the Orders passed by this Court in City Union Bank Limited Vs. Sub Registrar, Peddapalli and Others (supra 1). 9. The relevant portion of the Judgment in City Union Bank Limited Vs. Sub Registrar, Peddapalli and Others (supra 1) is as follows: “8. It is needless to observe that the civil Court has no jurisdiction to deal with subject matters pertaining to the SARFAESI Act. In the present scenario, the secured creditor was not a party to the civil suits before the Courts below and thus the orders of attachment before judgment are not binding on the secured creditor/Bank. More so, the cause of action before the Courts below is not within the ambit of SARFAESI Act. 10. Upon fair reading of S.O. 219 in the light of Section 64 of CPC, this Court is of the view that it only pertains to a civil dispute between the private parties and it does not include an institutional sale under a statute. Though Section 64 comes into play only after the alienation of the property under attachment amongst the private persons, the said legal position does not create an embargo upon the Registrar to proceed with the registration of sale certificates under the SARFAESI Act as the bank is not a party to the suit and the sale is not being effected by a party to the attachment order. 12. In similar circumstances, the Kerala High Court in The South Indian Bank Ltd. v. The Sub Registrar (3) WP (C) No. 3875 of 2017 dated 24.11.2016, considered the question whether a sale certificate is liable to be registered or not in view of the order of attachment before judgment passed by the civil Court and held that the secured creditor is entitled to proceed with the registration and the Registration Authority cannot stall the process of registration under the garb of an order of attachment passed by the civil Court.” The above said finding of the Division Bench of this Court would squarely apply to the instant case and the Registration Authority cannot stall the process of registration of the petitioner-Company in view of the attachment orders. 10. 10. In the instant case also, the petitioner-Bank by following the provisions of SARFAESI Act took over the possession of the subject property and brought the same for auction. In view of the settled law, the respondent authorities have no power to refuse the registration of the sale certificate under SARFAESI Act on the ground of attachment orders of the Civil Court or other authorities for the same property. In view of the same, the Registering Authority has to delete the subject property from the prohibitory list for registration of the sale certificate to be issued by the petitioner Bank in favour of the auction purchaser without reference to the attachment order in I.A.No.1412 of 2023 in O.S.No.301 of 2023 dated 20.07.2023 on the file of the XI Additional Chief Judge, City Civil Court, Hyderabad. 11. In view of the above findings, the present writ petition is disposed of directing the respondent No.5- Sub-Registrar to register the sale certificate to be issued by the petitioner Bank in favour of the auction purchaser as per the provisions of SARFAESI Act without reference to the attachment order in I.A.No.1412 of 2023 in O.S.No.301 of 2023 dated 20.07.2023 on the file of the XI Additional Chief Judge, City Civil Court, Hyderabad. There shall be no order as to costs. 12. Miscellaneous petitions pending, if any, shall also stand closed.