Phoenix Arc Private Limited vs Sub Registrar
2023 Latest Caselaw 6865 Ker

                IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                PRESENT
                   THE HONOURABLE MR.JUSTICE C.S.DIAS
        THURSDAY, THE 22ND DAY OF JUNE 2023 / 1ST ASHADHA, 1945
                        WP(C) NO. 30142 OF 2022
PETITIONER/S:

            PHOENIX ARC PRIVATE LIMITED
            (ACTING IN ITS CAPACITY AS TRUSTEE OF PHOENIX TRUST
            FY17-8), HAVING ITS REGISTERED OFFICE AT 5TH FLOOR,
            DANI CORPORATE PARK, 158, CST ROAD, KALINA, SANTA
            CRUZ(E), MUNBAL REPRESENTED BY ITS AUTHORIZED OFFICER
            MR. HARSH MAGIA, PIN - 400098

            BY ADVS.
            MANSOOR.B.H.
            SAKEENA BEEGUM



RESPONDENT/S:

    1       SUB REGISTRAR
            SUB REGISTRAR OFFICE, THRITHALA, PALAKKAD, PIN - 679354

    2       VILLAGE OFFICER
            THRITHALA VILLAGE OFFICE, THRUTHALA PALAKKAD, PIN -
            679354

    3       MUSTHAFA
            S/O.MUHARMMED, NEDIYEDATH HOUSE, POOKODE VILLAGE,
            PILLAKKAD DESOM, CHAVAKKAD TALUK, PIN - 680506

    4       AVATHAR JEWELLERS, THRISSUR,
            REP. BY MANAGING PARTNER U. ABDULLA„ S/O.URATHODIYIL
            ALIKUTTY, PATTAMBI TALUK, THITHALA DESOM, PIN - 679335

    5       U. ABDULLA
            S/O. URATHODIYIL ALIKUTTY, PATTAMBI TALUK, THRUTHALLA
            DESOM., PIN - 679335

    6       U.ABDUL NAZER,
            S/O. URATHODIYIL ALIKURTY, PATTAMBI TALUK, THRUTHALLA
            DESOM, PIN - 679335

    7       U.FAIZAL BABU,
            S/O.URATHODIYIL ALIKUTTY, PATTAMBI TALUK, THRUTHALLA
 WP(C) NO. 30142 OF 2022
                                      2

             DESOM, PIN - 679335

     8       U.FARRIS
             S/O.URATHODIYIL ALIKUTTY, PATTAMBI TALUK,
             THRUTHALLA DESOM., PIN - 679335

     9       K.A.NOUSHAD
             S/O.KALLIPARAMBIL K. B.MUHAMMED, THALIKULAM VILLAGE
             & DESOM, CHAVAKKAD TALUK., PIN - 680569

     10      MUHAMMED ALI
             S/O.PONNATH ABDU, VYLATHOOR.P. O. , CHAVAKKAD
             TALUK, THRISSUR DISTRICT, PIN - 627797

     11      HANEEFA.T.
             S/O.PAREETH, AMMUS VILLA, MELADU.P.O., KOHIKODE
             DIST., PIN - 673522

     12      K.M.HUSSIAN
             S/O. KUNNAMBATH VETTIL M.MOIDHU, AKALAD.P.O.,
             CHAVAKKAD TALUK, PIN - 680518

     13      . HAMSA
             S/O .MADALA VEETTIL LATE. MUHAMMED, MUTHIKURRISSI
             ELAD.P.O., MALAPPURAM DIST, PIN - 679340

           BY ADVS.
           ADVOCATE GENERAL OFFICE KERALA
           SREEHARI R
           HAMZA A.V.(K/1588/2022)



OTHER PRESENT:

           GP SRI SREEJITH V S




      THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON   22.06.2023,   THE   COURT   ON       THE   SAME   DAY   DELIVERED   THE
FOLLOWING:
 WP(C) NO. 30142 OF 2022
                                3

                          JUDGMENT

The writ petition is filed, interalia, to direct the

respondents 1 and 2 to efface the attachment that is

reflected in Ext.P3 encumbrance certificate.

2. The petitioner's case is that they are an Asset

Reconstruction Company as defined under Section 3 of

the Securitisation and Reconstruction of Financial Assets

and Enforcement of Security Interest Act, 2002 (in short

'Act'). As per an assignment deed, the South Indian Bank

Ltd. (Assignor Bank) had assigned its rights, in respect of

the loan transaction of the 4 th respondent, in favour of the

petitioner. The respondents 5 to 12 are the partners of

the 4th respondent and the respondents 9 to 13 are the

guarantors of the loan. The borrower had failed to repay

the loan, and the bank proceeded against the secured

asset under the Act. The bank has also preferred O.A.

No.251/2016 before the Debt Recovery Tribunal-II,

Ernakulam. During the pendency of the above

application, the bank assigned its rights in favour of the WP(C) NO. 30142 OF 2022

petitioner. Subsequently, in the auction that was

conducted, the sale was confirmed in favour of successful

bider. However, when the petitioner obtained Ext.P3

encumbrance certificate, it is seen that there are several

attachments over the property. One of the attachments is

on the basis of Ext.P4 order passed by the Court of the

Principal Subordinate Judge, Thrissur, which is a suit

filed at the instance of the 3rd respondent. The petitioner

apprehends that the 1st respondent would refuse to

register the sale deed. On an earlier occasion, the

petitioner had filed WP(C) No.16067/2021 before this

Court, which was disposed of by Ext.P5 judgment,

directing the 1st respondent to register the sale

certificate in favour of the petitioner. The attachment

shown in Ext.P3 was effected subsequent to the

mortgage and is, therefore, not binding on the petitioner.

Therefore, the petitioner is entitled to get the

encumbrance effaced. Hence, the writ petition.

3. The 1st respondent has filed a statement, inter-

alia, contenting that in view of Section 55 of the Transfer WP(C) NO. 30142 OF 2022

of Property Act, the seller is bound to disclose all the

liabilities on the property as per the the circular issued

by the Inspector General of Registration. Hence, the writ

petition is only to be dismissed.

4. Heard, Sri. Mansoor B.H., the learned Counsel

appearing for the petitioner, the learned Government

Pleader appearing for the respondents 1 and 2 and Sri.

Sreehari R., the learned Counsel appearing for the 3 rd

respondent.

5. The petitioners' case is that an equitable

mortgage was created by the 4th respondent in favour of

the Assignor Bank, prior to the suit instituted by the 3 rd

respondent. Therefore, the Assignor Bank has the first

charge over the property. Consequently, the attachment

made by the 3rd respondent has no effect over the Bank

and now the petitioner. The petitioner relies on Ext.P5

judgment of this Court to substantiate that the petitioner

has the right to get the encumbrance effaced from

Ext.P3.

6. Having considered the pleadings and materials on WP(C) NO. 30142 OF 2022

record, I am of the definite view that the above

contentions have to be reconsidered by the 1 st

respondent, after affording the petitioner and the 3 rd

respondent an opportunity of being heard. It would be up

to the petitioner and the 3rd respondent to address their

contentions before the 1st respondent.

Resultantly, I dispose of the writ petition as follows:

(i) The 1st respondent is directed to reconsider and

decide, whether the attachment reflected in Ext.P3

encumbrance certificate is to be effaced or not,

after affording the petitioner and the 3 rd

respondent, an opportunity of being heard.

(ii) The above exercise shall be carried out in

accordance with law and as expeditiously as

possible, at any rate, within a period of two months

from the date of receipt of a certified copy of this

judgment.

Sd/-

C.S.DIAS JUDGE rkc/22.06.23 WP(C) NO. 30142 OF 2022

APPENDIX OF WP(C) 30142/2022

PETITIONER EXHIBITS

Exhibit P1 COPY OF THE ONLINE E AUCTION NOTICE DATED 7/1 /2022

Exhibit P2 COPY OF THE SALE CONFIRMATION LETTER DATED FEBRUARY 04, 2022

Exhibit P3 A TRUE COPY OF THE CERTIFICATE OF ENCUMBRANCE OF PROPERTY ISSUED BY THE RESPONDENT NO. I DATED 3.09.2019

Exhibit P4 THE COPY OF AN ORDER DATED 12.09.2018 PASSED IN OS 265 /2017 OF SUB COURT, THRISSUR.

Exhibit P5 COPY OF THE JUDGMENT DATED 27.10.2021 IN W.P(C) NO.16067/2021 OF THE HON'BLE COURT