Kerala High Court
The State Bank Of India, Represented By ... vs The Sub Registrar, Pooyappally on 11 September, 2024
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE C. JAYACHANDRAN
Wednesday, the 11th day of September 2024 / 20th Bhadra, 1946
WP(C) NO. 5522 OF 2024
PETITIONER:
THE STATE BANK OF INDIA, REPRESENTED BY ITS CHIEF MANAGER, STRESS
ASSETS RECOVERY BRANCH (S.A.R.B), LMS COMPOUND, OPPOSITE MUSEUM WEST
GATE, VIKAS BHAVAN (P.O), THIRUVANANTHAPURAM., PIN - 695033
RESPONDENTS:
1. THE SUB REGISTRAR, POOYAPPALLY. SUB REGISTRAR OFFICE, POOYAPPALLY
(P.O), KOLLAM DISTRICT., PIN - 691537
2. M.V.KISHORE AGED 54 YEARS S/O VISWAMBARAN, RESIDING AT "MUKALUVILA
PUTHEN VEEDU", CHEPRA (P.O), KOTTARAKKARA, KOLLAM DISTRICT., PIN -
691520
3. SATYABAMA AGED 87 YEARS W/O VISWAMBARAN, RESIDING AT "MUKALUVILA
PUTHEN VEEDU", CHEPRA (P.O), KOTTARAKKARA, KOLLAM DISTRICT., PIN -
691520
4. SURESH S/O VIDHYADHARAN, REPRESENTED BY THE POWER OF ATTORNEY H
OLDER MRS. JYOTHI SURESH, W/O SURESH, OLIKKARA PUTHEN VEEDU, VELIYAM
TOWN, VELIYAM (P.O), KOTTARAKKARA, KOLLA DISTRICT., PIN - 691540
5. M/S. MUTHOOT VEHICLE AND ASSET FINANCE LIMITED BANARJI ROAD,
ERNAKULAM, PIN - 682018
6. THE VILLAGE OFFICER, ODANAVATTOM ODANAVATTOM (P.O), KOLLAM
DISTRICT., PIN - 691512
Writ petition (civil) praying inter alia that in the circumstances
stated in the affidavit filed along with the WP(C) the High Court be
pleased to direct the 1st respondent to register the sale deed produced by
the petitioner, in favour of Mr.Ajayakumar Sreedharan, S/o. Sreedharan,
"Kunnath", Chepra P.O, Kottarakkara, Kollam, notwithstanding the orders of
attachment by the Sub Court, Kottarakkara, in O.S.No.37/2016 and the
Additional District Court, Kollam, in E.A.No.26/13 in E.P.No.48/13,
pending the disposal of writ petition.
This petition coming on for orders upon perusing the petition and
the affidavit filed in support of WP(C) and upon hearing the arguments of
M/S. JAWAHAR JOSE, SAFEER BAWA A.S., CISSY MATHEWS Advocates for the
petitioner, GOVERNMENT PLEADER for R1 and R6 and of M/S. C.S.MANILAL &
S.NIDHEESH(K/1061/2007) Advocates for the 5th respondent, the court passed
the following:
C.JAYACHANDRAN, J.
------------------------------------
W.P.(C)Nos.7115/2023, 24723/2023, 34928/2023,
36701/2023, 41544/2023, 1761/2024, 5522/2024,
5675/2024, 5740/2024, 6301/2024, 10737/2024,
------------------------------------
Dated, this the 11th September, 2024
REFERENCE ORDER
These Writ Petitions are filed seeking a writ of
mandamus against the registering authority, as
also, the Village Officer to delete/efface the
attachments noted in the encumbrance register and
the revenue records. In all the cases, except one
or two, the petitioner is the Bank, which sold the
secured asset to an auction purchaser (arraigned
as respondent in the Writ Petitions) as per the
provisions of the SARFAESI Act. A relief for
registering the secured asset in the name of the
auction purchaser is also sought for, in respect
of which relief, there is no serious dispute,
except in one or two cases. The main relief for
effacement of attachments is not traceable to any
statutory provision, but based on the decision of
W.P(C) No.7115 of 2023 and connected matters
..2..
a learned Single Judge of this Court in Madan S.
v. Sub Registry, Kollam and others [2014 (1) KLT
406], which was upheld by the Division Bench in
Ali Ashraf M.M and another v. Sub Registrar,
Thrissur [judgment dated 24.07.2015 in
W.A.No.612/2015] and Secretary, Keechery Service
Co-operative Bank v. Sajida Nazar alias Sajitha
P.M. and others [2020 (6) KLT 68].
2. The above Writ Petitions were heard along with
other Writ Petitions, whereupon, this Court
entertained a doubt as regards the correctness of
the directions given in Madan S.(supra) to efface
off the attachments. The matters were heard and
reserved for judgment. While so, a Division Bench
of this Court in W.A.No.1087/2024 doubted the
correctness of Madan S.(supra) and the judgment in
W.A.No.612/2015, and referred the matter for
consideration by a larger bench.
W.P(C) No.7115 of 2023 and connected matters
..3..
3. Inasmuch as the above captioned cases were
heard at length for quite some time, this court is
impelled to direct the Registry to place the cases
before the Hon'ble the Chief Justice, so as to
enable a reference to a larger Bench and to be
tagged along with the Writ Appeal No.1087/2024.
The above referred writ petitions are chosen for
such reference for the reason that arguments were
advanced by the respective counsel in these
matters elaborately, wherefore, a reference of the
above Writ Petitions would offer an opportunity to
the said counsel to place their arguments before
the larger Bench. Else the parties, who are
vitally interested in the outcome of the issue
referred in Writ Appeal No.1087/2024, may miss an
opportunity, especially when their counsel have
already worked up the legal position and had in
fact filed notes of arguments and compilations of
decisions.
W.P(C) No.7115 of 2023 and connected matters
..4..
4. Apart from the issue which is seen raised in
the reference order dated 31.07.2024 in
W.A.No.1087/2024, the following incidental issues
also surface for consideration:
(1) Whether the petitioner/Banks have the
locus and the right to seek effacement of
attachments, duly entered into in the
encumbrance register as per various orders
passed by the courts of law and other
competent authorities? Whether writ
jurisdiction can be invoked for such remedy,
when the statute prescribes a due procedure
for lifting such attachments?
(2) Whether the auction purchaser (respondent
in the writ petitions), who participates in
the auction and purchases the property with
full knowledge about the encumbrances on the
property is entitled to invoke the writ
jurisdiction of this Court to efface off such
W.P(C) No.7115 of 2023 and connected matters
..5..
encumbrances? Can the auction purchaser claim
a better right, than stepping into shoes of
the debtor/borrower, insofar as the auctioned
property and its liabilities are concerned?
[See in this regard the impact of Rule 8,
7(a) and (f), Rule 9(7), 9(9) and 9(10) of
the Security Interest (Enforcement) Rules
2002, as also, Appendix IV-A to the said
rules (which provides to give sale notice
with the stipulation that the secured asset
will be sold on "As is where is", "As is what
is", and "Whatever there is" condition)]. It
would be profitable in this context to refer
to the law laid down by the Hon'ble Supreme
Court in K.C.Ninan v. KSEB and others [2023
SCC Online SC 663].
(3) Can the petitioners'(banks') contention
that they have a duty and obligation to
transfer "an encumbrance free title" to the
W.P(C) No.7115 of 2023 and connected matters
..6..
auction purchaser be recognized in law, in
view of the above referred provisions of The
Security Interest (Enforcement) Rules and
Appendix IV-A?
(4) Is not the dictum laid down in paragraph
no.9 of Madhan S.(supra) that the sale of the
mortgaged property under the SARFAESI Act is
free from all encumbrances liable to be
reconsidered, especially when Madhan S.
(supra) does not refer at all to the Security
Interest (Enforcement) Rules, 2002?
(5) Can the petitioners/banks rely on the
proposition of law that attachments effected
subsequent to creation of equitable mortgage
will not affect the title and ownership over
such property, in seeking effacement of such
attachments, especially when the contingency
of the mortgagee/Bank retaining amounts in
W.P(C) No.7115 of 2023 and connected matters
..7..
excess of the mortgage debt pursuant to sale
- over which the holder of a subsequent
attachment can lay a claim - is taken into
consideration? Is not the question whether an
attachment by a court would extinguish upon
the sale of the mortgage property liable to
be adjudged on individual facts?
(6) Is not the concept of effacement or
erasure of attachment, itself, a misnomer in
view of the provisions of Section 89 of the
Registration Act, which does not recognize
any mechanism to efface off an entry once
made in Book No.I? Is it not the proper
remedy to make a subsequent entry regarding
release of immovable properties for
attachment, upon orders of courts or
competent authority as per the statutory
scheme? Profitable reference in this regard
may be made to the judgment in Joy Varghese
W.P(C) No.7115 of 2023 and connected matters
..8..
Alukkas v. State of Kerala and others [W.P.
(C)No.3843/2024 dated 08.08.2024].
(7) When SARFAESI Act is a complete code in
itself catering to all requirements in
connection with securitization and
enforcement of security interest, is a remedy
like effacement of attachments - not
recognized in that Act or Rules - liable to
be granted, that too invoking the writ
jurisdiction of the High Court?
In the above referred facts and circumstances, the
Registry is directed to place the above captioned
cases before the Hon'ble the Chief Justice for
appropriate orders, enabling reference to a larger
Bench, for consideration along with
W.A.No.1087/2024.
Sd/-
C. JAYACHANDRAN
JUDGE
TR
11-09-2024 /True Copy/ Assistant Registrar
