Kerala High Court
Axis Bank Limited vs The Sub Registrar on 11 April, 2024
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE VIJU ABRAHAM
THURSDAY, THE 11TH DAY OF APRIL 2024 / 22ND CHAITHRA, 1946
WP(C) NO. 13902 OF 2024
PETITIONER:
AXIS BANK LIMITED
A COMPANY INCORPORATED UNDER THE COMPANIES ACT-1956,
HAVING ITS REGISTERED OFFICE AT "TRISHUL", 3RD FLOOR,
OPPOSITE SAMARTHESHWAR TEMPLE, ELLIS BRIDGE, AHMEDABAD
- 380 006 AND HAVING ITS BRANCH OFFICE AT AGRI BUSINESS
CENTRE, AXIS BANK LTD, 1ST FLOOR, PUKALAKKAT CITY
CENTRE, PALARIVATTOM, COCHIN-682025 IS REPRESENTED BY
RAHUL MATHEW, AUTHORISED OFFICER & MANAGER, 5TH FLOOR,
RAC, CHICAGO PLAZA, RAJAJI ROAD, KOCHI, KERALA, PIN -
682035
BY ADVS.
P.PAULOCHAN ANTONY
SREEJITH K.
RESPONDENTS:
1 THE SUB REGISTRAR,
CHERPU SUB REGISTRAR OFFICE CHERPU, THRISSUR, KERALA,
PIN - 680561
2 THE VILLAGE OFFICER
PALISSERY VILLAGE OFFICE PALAKKAL, THRISSUR, PIN -
680027
3 MANAGER, GURUVIJAYA KURIES
GURUVIJAYA TOWER, PALIYAM ROAD, PATTURAIKKAL, THRISSUR,
PIN - 680022
4 MR SUDHEESH. KUMAR.K.K
KAROTH HOUSE KANNAMKULANGARA KOORKANCHERRY THRISSUR,
PIN - 680007
OTHER PRESENT:
GP - DEEPA V
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
11.04.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.P.(C).No.13902 of 2024 2
VIJU ABRAHAM,J
-------------------
W.P.(C).No.13902 of 2024
----------------------------------
Dated this the 11th day of April, 2024
JUDGMENT
The above writ petition is filed seeking the
following reliefs:
A. To declare that the attachment
made after the Exhibit P1 mortgage is
having no existence after the issuance
of the Exhibit-P4 sale Notification as
per Section 13(8) of SARFAESI Act
(after amendment);
B. To direct respondent No.1 to
efface the attachment made/effected
after mortgage and to register Exhibit
P-5 sale certificate.
C. To direct Respondents No.1 and
2 to effeace the encumbrances created
after mortgage.
D. To pass any other order as this
deems fit
&
E. Dispense with the production of
translation of Vernacular documents.
2. It is averred that the petitioner, a banking
company, extended loan to one Anitha V.P. and her
Son, Nithish K.P on the strength of the mortgage
of the property created on 24.07.2021 as evident
from Ext P1. There was default in repayment of
the loan amount and SARFAESI proceedings were
initiated and Ext P5 sale certificate was issued
in favour of the 4th respondent. When Ext P3
encumbrance certificate was taken, there was an
entry regarding an attachment at the instance of
Respondent No.3 in E.P. No. 2529 of 2020 in O.S.
No. 901 of 2011 and the date of attachment was on
15.09.2021.
3. Ext.P3 would show that the said attachment
has been obtained by the 3rd respondent subsequent
to the creation of the equitable mortgage by the
borrower in favour of the petitioner. Petitioner
contends that the attachment at the instance of
the 3rd respondent which is subsequent to the
mortgage cannot affect the right of the petitioner
to sell the property under the provisions of the
SARFAESI Act.
4. Though notice by special messenger was
issued to respondents 3 and 4, there is no
appearance for them in this proceedings.
5. Heard the learned counsel for the petitioner
and the learned Government Pleader.
6. The learned counsel for the petitioner
relied on the decision of this Court in Madhan S.
v. Sub Registrar, Kollam and Others [2014 (1) KHC
249] and the decision of a Division Bench of this
Court in Secretary, Keechery Service Cooperative
Bank Ltd. v. Sajitha Nizar alias Sajitha P.M. and
Others, [2020 (5) KHC 231] and contends that the
attachment effected subsequent to the creation of
equitable mortgage will not affect the right of
the Bank to sell the mortgaged property and the
attachment has to be effaced from the encumbrance
register.
7. In Madhan's case (supra), this Court held in
paragraph 9 as follows:-
"9. 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 subsequent 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 sale 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. 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. The needful in relation to the property bought by the
petitioner shall be done within a period of two months from the date of
receipt of a copy of this judgment."
8. A Division Bench of this Court in Ali
Asharaf M.M. and Another v. Sub Registrar,
Thrissur (Judgment dated 24.7.2015 in W.A.
No.612/2015) has affirmed the law laid down in
Madhan's case. In Keechery Service Co-operative
Bank case (cited supra), another Division Bench of
this Court also affirmed the law laid down in
Madhan's case (supra) and held in paragraph 7 as
under:-
"7.In the light of the aforesaid declaration of law by this Court the
order of dismissal of the petition filed for lifting the attachment
ordered under Ext R7 (a) viz., Ext R7 (b) by the Federal Bnk would
pale into insignificance. We do not find any reason to disagree with
the declaration of law in Madhan's case (supra) which was virtually
affirmed by the Division Bench in Ali Asharaf's case (supra). In the
said circumstances and taking note of the fact that the orders of
attachment of the property in question were after the creation of
equitable mortgage of the same with Federal Bank we do not find any
reason to interfere with the impugned judgment passed by the learned
Single Judge following the dictum in Madhan's case (supra), carrying
the directions to effect mutation of the property as also to efface all
encumbrance over the property effected after 27/06/2014, the date on
which the property in question was mortgaged with Federal Bank".
9. Thus it is trite law that attachment effected
subsequent to the creation of equitable mortgage
does not have any effect on the sale conducted by
the Bank under the SARFAESI Act and has to be
effaced from the encumbrance register. It is
evident from the documents produced in the writ
petition that the attachment obtained by the 3rd
respondent is subsequent to the creation of
equitable mortgage by the borrowers in favour of
the petitioner.
10. This Court in Phoenix ARC Pvt. Ltd. v. Sub
Registrar, Feroke [2023 KHC Online 9452] while
considering an identical issue referring to
Section 89(5) of the Registration Act, 1908 has
held that since the attachment subsequent to the
creation of equitable mortgage has lost its
efficacy and has to be obliterated from the
records, the same can be done by the Sub Registrar
by filing the certified copy of the order/judgment
of this Court in Book No.1 maintained by the Sub
Registrar.
11. Accordingly, there will be a direction to
the 1st respondent to efface the attachment
obtained by the 3rd respondent noted in Ext.P3
encumbrance certificate and to register the sale
certificate in favour of the 4th respondent without
any delay.
The writ petition is disposed of.
sd/-
VIJU ABRAHAM,
JUDGE
pm
APPENDIX OF WP(C) 13902/2024
PETITIONER'S EXHIBITS
Exhibit P1 TRUE COPY OF MEMORANDUM OF ENTRY DATED
24-07-2019
Exhibit P2 THE COMPUTER COPY OF THE ORDER DATED
01-06-2023 IN CRL M.P. 2576/2022
Exhibit P3 TRUE COPY OF THE ENCUMBRANCE
CERTIFICATE DATED 22-03-2023
Exhibit P4 TRUE COPY OF PAPER PUBLICATION OF SALE
NOTICE DATED 09-06-2023 PUBLISHED IN
"THE HINDU
Exhibit P5 TRUE COPY OF THE SALE CERTIFICATE DATED
16-02-2024
