Telangana High Court
M/S. Shriram Finance Limited vs The State Of Telangana on 17 June, 2025
THE HON'BLE SRI JUSTICE K.SARATH
WRIT PETITION No.3164 of 2025
ORDER:
Heard learned counsel for the petitioner and learned Assistant Government Pleader for Stamps and Registration and perused the material on record.
2. The notices sent to the respondent Nos.5 to 9 were returned with an endorsement 'unclaimed' and the notice sent to the respondent No.10 was served, but none appears for the respondent No.10.
3. This writ petition is filed questioning the action of the respondent No.4 in not registering the sale deed based on the sale certificate issued by the petitioner pursuant to the auction conducted under the SARFEASI Act to the respondent No.9 (successful bidder) pertaining to the property bearing Shop No.46 in Ground Floor "B" Block of Laxmi Complex, Erragadda, Hyderabad, situated near Fateh Nagar Flyover Bridge, Sanath Nagar, on the pretext of attachment order dated 08.05.2017 in I.A.No.59 of 2017 in ABR/CF No.262 of 2017 passed by 2 SK, J W.P.No.3164_2025 the respondent No.3 despite of the notice dated 06.12.2024 as illegal and arbitrary.
4. Learned counsel for the petitioner submits that the respondent Nos.5 to 8 have approached the petitioner- Finance Company for the purpose of finance facility and obtained mortgage loan of Rs.30,00,000/- on 06.08.2014 and the respondent No.6 has mortgaged the subject property through registered mortgage deed bearing No.3033/2014 dated 07.08.2014. He further submits that in view of default in payment, the petitioner-Company has initiated proceedings under the provisions of Section 14 of SARFAESI Act and took over the possession of the subject property and later the petitioner has sold the property by way of auction in accordance with the procedure as contemplated under the SARFAESI Act. In the auction, the respondent No.9 stood as highest bidder and the petitioner-Company has issued sale certificate dated 12.09.2024 in his favour and confirmed the sale after payment of full amount. After issuance of sale certificate, the petitioner-Company 3 SK, J W.P.No.3164_2025 and the respondent No.9 took steps for registration of the sale certificate and approached the respondent No.4, but the respondent No.4 has refused to receive the said document on the pretext that the property is under attachment by virtue of Orders in I.A.No.59 of 2017 in ABR/CF No.262 of 2017 passed by the respondent No.3- Deputy Registrar of Chits/Arbitrator, Erragadda, Hyderabad.
5. Learned counsel for the petitioner further submits that the action of respondent No.4 is contrary to the Orders passed by this Court in City Union Bank Limited Vs Sub Registrar, Peddapalli and Ors.,1 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.4 to register the sale certificate in favour of the respondent No.9.
6. On the other hand, learned Assistant Government Pleader for Stamps and Registration submits that though the petitioner herein presented a sale certificate 1 2018 (5) ALT 279 4 SK, J W.P.No.3164_2025 dated 12.09.2024 under SARFAESI Act and the same was accepted by the respondent No.4 for scrutiny, during the scrutiny of the said document, it is found that as per the orders dated 08.05.2017 in I.A.No.59 of 2017 in ABR/CF No.262 of 217, the property mentioned in the sale certificate is under attachment. The subject property of the writ petition is kept in the prohibited property list on the basis of Attachment Orders passed by the Deputy Registrar of Chits/Arbitrator, Erragadda t Hyderabad (South). The sale certificate presented by the petitioner cannot be registered until and unless the Attachment Orders are set aside.
7. Learned Assistant Government Pleader for Stamps and Registration further submits that though the sale certificate was issued under SARFAESI Act, it cannot be registered, as the property involved in the sale certificate is already in prohibited list on the website of the IGRS 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 5 SK, J W.P.No.3164_2025 is no dispute with regard to the sale certificate issued by the petitioner-Company to the respondent No.9 for registration of the subject property as per SARFAESI Act. The respondent Nos.5 to 8 have mortgaged the subject property with the petitioner Company. The petitioner by following the procedure as contemplated under SARFAESI Act conducted auction for the subject property and issued sale certificate in favour of respondent No.9. Now, the respondent No.4 has refused to register the sale certificate on the ground that there is attachment Order with respect to the subject property and until the same was vacated, it cannot be possible to register the sale certificate dated 12.09.2024 issued in favour of respondent No.9. The said contention of respondent No.4 is contrary to the Orders passed by this Court in City Union Bank Limited Vs Sub Registrar, Peddapalli and Ors. (supra 1).
9. The relevant portion of the Judgment in City Union Bank Limited Vs Sub Registrar, Peddapalli and Ors. (supra 1) is as follows:
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SK, J W.P.No.3164_2025 "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 order.
10. In the instant case also, the petitioner-Company by following the SARFAESI Act conducted auction for the 7 SK, J W.P.No.3164_2025 subject property and issued sale certificate in favour of the respondent No.9. 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 register the sale certificate issued by the petitioner-Company in favour of the respondent No.9 without taking into account of the attachment order dated 08.05.2017 in I.A.No.59 of 2017 in ABR/CF No.262 of 2017 passed by the respondent No.3.
11. In view of the above findings, the present writ petition is disposed of directing the Registering Authority to register the sale certificate dated 12.09.2024 presented by the petitioner-Company in favour of the respondent No.9 as per the provisions of SARFAESI Act without reference to the Attachment Order dated 08.05.2017 in I.A.No.59 of 2017 in ABR/CF No.262 of 2017 passed by the respondent No.3. 8
SK, J W.P.No.3164_2025
12. Accordingly, the Writ Petition is disposed of. There shall be no order as to costs.
13. Miscellaneous petitions pending, if any, shall also stand closed.
_____________________ JUSTICE K.SARATH Date:17.06.2025 sj