Kerala High Court
Uco Bank, Kottayam Branch vs State Of Kerala on 20 July, 2021
WP(C) NO. 22657 OF 2020 1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V
TUESDAY, THE 20TH DAY OF JULY 2021 / 29TH ASHADHA, 1943
WP(C) NO. 22657 OF 2020
PETITIONER:
UCO BANK, KOTTAYAM BRANCH,
MADUKANIL BUILDING, KANJIKUZHI P.O, DEVALOKAM ROAD,
KOTTAYAM-686 004,REP.BY ITS MANAGER.
BY ADV H.RAMANAN
RESPONDENTS:
1 STATE OF KERALA,
REP. BY ITS SECRETARY, REGISTRATION DEPT.,
SECRETARIAT, THIRUVANANTHAPURAM-695001
2 SUB REGISTRAR (PRINCIPAL)
SUB REGISTRAR'S OFFICE, K.K. ROAD,COLLECTORATE P.O,
KOTTAYAM-686 002.
3 P.M. JACOB,
S/O. P.I. MARKOSE, PERUMACHERIL HOUSE, NEAR GOMATHY
JUNCTION, CHINGAVANAM P.O, KOTTAYAM-686 531
4 SIBU TOM,
S/O. THOMAS SEBASTIAN, PUTHENPARAMBIL, MAMMOOD P.O,
KOTTAYAM-686 536
5 P.K. MARKOSE,
S/O.KURIAN, PADINJAREMURIYIL, CHERUKULANJIKARA,
AITHALA VILLAGE, PATHANAMTHITTA -689 673
6 GEO JOSEPH,
S/O. JOSEPH, KOCHUPARAMBIL HOUSE, CHINGAVANAM P.O,
KOTTAYAM-686 531
7 M/S. THOPPIL CHITS PVT. LTD,
THOPPIL TOWERS, ST. FRANCIS XAVIER'S CHURCH ROAD,
WP(C) NO. 22657 OF 2020 2
KALOOR, ERNAKULAM-682 017
8 S. SALEEM,
HOUSE NO.71, YAMUNA NAGAR, 2ND STREET, MANACAUD,
THIRUVANANTHAPURAM-695 009
9 STATE BANK OF INDIA,
(FORMER STATE BANK OF TRAVANCORE), REP. BY IT'S
MANAGER, COLLECTORATE P.O, KOTTAYAM-686 002
BY ADVS.
SHRI.TOM K.THOMAS
SRI.T.SETHUMADHAVAN (SR.)
SMT.PREETHI. P.V.
SRI.M.V.BALAGOPAL
SMT K AMMINIKUTTY SR GP
SMT DEEPA NARAYAN SC
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON 20.07.2021, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
WP(C) NO. 22657 OF 2020 3
JUDGMENT
This Writ Petition has been filed under Article 226 of the Constitution of India
seeking a direction to the second respondent to efface attachments made pursuant
to the creation of security interest by the petitioner bank over an item of immovable
property by an equitable mortgage.
2. Brief facts of the case are as under:
The petitioner is a public sector Bank. The 3rd respondent secured cash credit
facilities from the petitioner bank on 09.08.2005 and towards security created
equitable mortgage of immovable property admeasuring 10.40 Ares falling in Re-Sy
No-323/23 in Block No.19 of Nattakom Village. Ext.P1 is the letter dated 10.08.2005
issued by the 3rd respondent confirming the deposit of title deeds for the creation of
the mortgage. The 3rd respondent defaulted in paying the instalments due to the
bank and the account was categorised as a non-performing one. Proceedings under
the Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 ('SARFAESI Act' for brevity) were initiated. The petitioner
took physical possession of the secured asset pursuant to the order passed by the
Chief Judicial Magistrate Court, Kottayam. Later, the property was put up for sale by
e-auction. Though several buyers came forward to purchase the property, the sale
could not be effected. The petitioner applied for and obtained an encumbrance
certificate in respect of the property to ascertain the nature of attachments. It was
found that numerous individuals as well as institutions and other banks had
instituted civil suits against the 3rd respondent for realization of money and they had
secured attachments over the property. The details of the attachment as mentioned
in Ext.P4 are charted out by the petitioner. The same is extracted below:
Sl. Date of Name of Plaintiff Case No. Name of
No. Attachment Courts
1 20.05.2010 Sibu Tom (R4) OS 266/10 Sub Court,
Kottayam
2 03.08.2010 P.K.Markose (R5) OS 409/10 -Do-
3 23.08.2011 Geo Joseph (R6) OS 421/11 -Do-
4 03.08.2012 Thoppil Chits Pvt. Ltd OS 1031/12 Munsiff Court,
(R7) Tvm
5 27.08.2012 S.Saleem (R8) OS 1047/12 Addl. Sub Court,
Tvm
6 15.04.2016 P.K.Markose (R5) EP 448/12 Prl Sub Court,
In Kottayam
OS 409/10
7 04.08.2017 SBT (Now SBI) Kottayam EA 56/17 Prl Sub Court,
(R9) In Kottayam
EP 143/15
In
OS 13/13
3. According to the petitioner, the attachments were all effected
much after the creation of the mortgage in favour of the petitioner bank. The
petitioner further states that the rights conferred on the creditor bank by
virtue of the creation of mortgage and the right to proceed under the relevant
provisions of the SARFAESI Act cannot be defeated because of the subsequent
attachments ordered by civil courts. It is in the afore circumstances that the
petitioner has approached this Court seeking the following reliefs:
i) Direct the 2nd respondent to efface the entire attachments made in
the register relating to the subject property ;
4. I have considered the submissions advanced and have perused
the records.
5. Though ample opportunities were granted to the respondents
to file their counter, no counter affidavit has been filed till date.
6. Section 26E of the SARFAESI Act grants priority to secured
creditors after the registration of the security interest and the debts due to
any secured creditor shall be paid in priority over all other debts and all
revenues, taxes, cesses and other rates payable to the Central Government
or State Government or local authority. In the instant case, the property
was mortgaged by way of equitable mortgage on 10.08.2005, as is evident
from Ext.P1. Ext.P4 Encumbrance Certificate would reveal that attachments
were effected by various civil courts only on 20.05.2010 and thereafter.
The rights and liberties conferred on the creditor/bank by virtue of
mortgage created in the year 2005 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 Court (see HDFC v. Sub
Registry Officer [2011 KHC 851] and Madhan v. Sub Registrar [2014
(1) KLT 406]). In TDB v Deputy Examiner, Local Fund Audit and
Others, [2020 (3) KHC 129] a Division Bench of this Court had occasion to
observe that the sale carried out either under the SARFAESI Act or under
the RDB Act takes precedence even over the statutory charges due to the
Government created under KVAT Act or under other State Enactments
after the Amendment Act of 2016. A secured creditor in whose favour a
security interest has been created thus has priority in sale and payment
over all other statutory charge holders.
In that view of the matter, the petitioner is entitled to succeed.
The attachments effected subsequent to the creation of mortgage on
09.08.2005 shall not affect the title and ownership of the petitioner over
the property covered under Ext.P1. Consequently, there will be a direction
to the competent among respondents to efface the entries in the registers
relating to encumbrances over the property covered under Ext.P1
subsequent to the creation of the mortgage on 9.8.2005.
This writ petition will stand allowed as above.
Sd/-
RAJA VIJAYARAGHAVAN V
JUDGE
ps
APPENDIX OF WP(C) 22657/2020
PETITIONER'S EXHIBITS:
EXHIBIT P1 R-3' LETTER CONFIRMING DEPOSIT OF TITLE
DEEDS (TRUE COPY).
EXHIBIT P2 POSSESSION NOTICE ISSUED BY THE PETITIONER
(TRUE COPY).
EXHIBIT P3 NOTICE OF SALE (TRUE COPY).
EXHIBIT P4 ENCUMBRANCE CERTIFICATE (EC)(TRUE COPY)
EXHIBIT P5 PETITIONER'S COUNTER AFFIDAVIT IN WP(C)NO.
29789/18 FILED BY R-5 (TRUE COPY).
EXHIBIT P6 JUDGMENT IN W.P.(C)NO. 29879/18 (TRUE
COPY).
RESPONDENTS' EXHIBITS:
NIL
