Madras High Court
Tamilnadu Mercantile Bank Ltd vs The Sub Registrar on 25 June, 2021
W.P. NO. 13282 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 25.06.2021
CORAM
THE HONOURABLE MR.JUSTICE N. KIRUBAKARAN
AND
THE HONOURABLE MRS. JUSTICE T.V. THAMILSELVI
W.P. No. 13282 of 2021
&
W.M.P. No. 14097 of 2021
Tamilnadu Mercantile Bank Ltd.,
rep.by its Authorised Officer,
Elampillai Branch,
S.No.639/2-B, Mettur Road,
Near Elampillai Bus Stand,
Ellampillai – 637 502
Salem District. ..Petitioner
Vs.
1. The Sub Registrar,
Mallasamudram,
Sub-Registrar Office,
Tiruchengode Taluk,
Namakkal District.
2. Mr.K. Sathishkumar,
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W.P. NO. 13282 of 2021
S/o. Kuppusamy,
No. 79/57, West Car Street,
Mallasamudram Post,
Tiruchengode Taluk.
3. The Inspector General of Registration,
100, Santhome High Road,
Mullima Nagar, Mandavelipakkam,
Raja Annamalaipuram,
Chennai -28.
rd
(3 respondent suo motu impleaded by order
dated 25.06.2021 by NKKJ & TVTSJ) ..Respondents
Prayer: Petition under Article 226 of the Constitution of India praying
for issue of a Writ of Certiorarified Mandamus to call for the records
relating to the order passed by the 1st respondent in Pending Document No.
3/2021 dated 10.06.2021, quash the same and direct the 1st respondent to
register the Sale Certificate/Deed dated 07.05.2021 (Pending Document
No.3/2021) issued by the petitioner to and in favour of the 2 nd respondent
within a time frame.
For Petitioner :: Mr.V. Chandrasekaran
For Respondents :: Mr.P. Muthukumar
State Government Counsel
for R1
ORDER
(Order of the Court was made by N.KIRUBAKARAN,J.)
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W.P. NO. 13282 of 2021
The matter is heard through videoconferencing.
2. The petitioner Bank has challenged the order passed by the 1st
respondent refusing to register the sale certificate issued by it in favour of
the 2nd respondent who was the successful bidder in the auction conducted
by the petitioner.
3. Heard Mr. V. Chandrasekaran, learned counsel for the
petitioner and Mr.P.Muthukumar, State Government Counsel, who takes
notice on behalf of the 1st respondent. Notice to the 2nd respondent is not
necessary as there is no conflict of interest between the petitioner and the 2nd
respondent.
4. The petitioner Bank granted loan in favour of one P.
Murugesan, S/o. Mr. Pazhaniappa Mudaliar, D.No.3-39A, Gandhi Street,
Mallasamudram, Tiruchengode Taluk, Namakkal District – 637 503, Salem
District and the property in question was mortgaged to and in favour of the
petitioner Bank by deposit of title deeds by the said Murugesan on
13.02.2015. However, the said Murugesan failed to repay the amount and
therefore, the account had become NPA. Resultantly, the petitioner Bank
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W.P. NO. 13282 of 2021
brought the property for auction on 28.04.2021 and the 2nd respondent was
declared as the successful bidder. The 2nd respondent had also paid the sale
consideration. However, when the petitioner and the 2nd respondent went for
registration of sale certificate, the same was declined to be registered on the
ground that an attachment order dated 19.12.2016 had been passed by the
Principal Sub Court, Karur in I.A. No. 1155 of 2016 in O.S. No. 679 of
2016. Hence, the present writ petition.
5. The said ground stated in the impugned order is not sustainable
in view of the numerous judgments passed by this Court, especially, in the
writ petitions filed by the petitioner by order dated 13.11.2019 in W.P.
(MD) No. 23896 of 2019 batch, order dated 25.01.2021 in W.P. No. 1410
of 2021, order dated 29.01.2021 in W.P. No. 6976 of 2020 batch, order
dated 13.05.2021 in W.P. NO. 11723 of and order dated 19.05.2021 in W.P.
No. 11965 of 2021. In the above said cases, this Court had categorically
held, after considering several decisions and citing the provision under
Section 31-B of The Recovery of Debts due to Banks and Financial
Institutions Act, 1993, that Sub Registrar cannot refuse to register the sale
certificate on the ground that there is an attachment order passed by the
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W.P. NO. 13282 of 2021
Civil Court. In the said cases, it has been held that the rights of secured
creditors in terms of Section 31-B of the Act will override all other debts.
Section 31-B of the Act is usefully extracted hereunder:
“31-B Notwithstanding anything contained in any other law
for the time being inforce, the rights of Secured Creditors to
realise Secured Debts due and payable to them by sale of
assets over which Security Interest is created, shall have
priority and shall be paid in priority over all othe rdebts and
Government dues including revenues, taxes, cesses and rates
due to the Cental Government, State Government or Local
Authority.
Explanation: For the purposes of this Sectiion it is hereby
clarified that on or after the commencement of Insolvency and
Bankruptcy Code, 2016, in cases where Insolvency or
Bankruptcy proceedings are pending in respect of Secured
Assets of the borrower, priority to Secured Creditors in
payment of debt shall be subject to the provisions of that
Code.”
When that is the settled position of law, it is not understandable as to
how repeatedly, the Registering Authorities are refusing to register the sale
certificate on the ground that Civil Court has passed attachment orders.
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W.P. NO. 13282 of 2021
Moreover, Section 34, which deals with over-riding effect of the said Act
has also been brought to the notice of this Court and the said provision
reads thus:
“34. Act to have over-riding effect.—(1) Save as provided
under subsection (2), the provisions of this Act shall have
effect notwithstanding anything inconsistent therewith
contained in any other law for the time being in force or in any
instrument having effect by virtue of any law other than this
Act.
(2) The provisions of this Act or the rules made
thereunder shall be in addition to, and not in derogation of, the
Industrial Finance Corporation Act, 1948 (15 of 1948), the
State Financial Corporations Act, 1951 (63 of 1951), the Unit
Trust of India Act, 1963 (52 of 1963), the Industrial
Reconstruction Bank of India Act, 1984 (62 of 1984) 2 [, the
Sick Industrial Companies (Special Provisions) Act, 1985 (1 of
1986) and the Small Industries Development Bank of India Act,
1989 (39 of 1989)]. “
6. It is evident that right from 2019 onwards, the petitioner Bank
is being discriminated by not registering the sale certificate on the ground of
attachment orders having been passed by Civil Courts, the earliest writ
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W.P. NO. 13282 of 2021
petition filed by the petitioner Bank being W.P.(MD) No. 23896 of 2019
batch and the latest one being W.P. No. 11965 of 2021. For the past 5 years,
the petitioner Bank has been driven to this Court consistently to get relief
because of the illegal acts of Registering Authorities. This Court is of the
opinion that the petitioner is being singled out every time and illegal orders
have been passed refusing to register the sale certificate in respect of the
petitioner contrary to various judgments of this Court. Therefore, the
impugned order is quashed.
7. Though this Court intended to impose heavy cost against the
1st respondent, Sub-Registrar for acting illegally by declining to register the
sale certificate issued, considering the plea made by Mr.P.Muthukumar,
State Government Counsel, this Court refrains from imposing costs due to
judicial restraint. However, the Inspector General of Registration, 100,
Santhome High Road, Mullima Nagar, Mandavelipakkam, Raja
Annamalaipuram, Chennai -28, who is suo motu impleaded by this Court
as 3rd respondent, for whom Mr.S. Muthukumar, learned State Government
Counsel takes notice, shall issue a circular to all the Registrars in Tamil
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W.P. NO. 13282 of 2021
Nadu to register all sale certificates irrespective of any attachment orders
passed by the Civil Courts in view of the above judgments as well as the
statutory provisions namely, Sections 31-B and 34 of Recovery of Debts
due to Banks and Financial Institutions Act, 1993. The circular shall be
issued within two weeks from the date of receipt of a copy of this order. It is
made clear that if any Registering Authority refuses to register the sale
certificate on the ground of attachment order passed by the Civil Court, it
would be deemed to be violation of Court’s order amounting to contempt
and the aggrieved parties can always initiate contempt proceedings before
this Court.
8. The writ petition is allowed with the above direction. No costs.
Connected W.M.P. is closed.
9. Post on 12.07.2021 for reporting compliance regarding
production of circular to be issued by the newly impleaded 3rd respondent,
Inspector General of Registration failing which the authority shall appear
before this Court through videoconferencing.
(N.K.K.J.) (T.V.T.S.J.)
nv 25.06.2021
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W.P. NO. 13282 of 2021
To
1. The Sub Registrar,
Mallasamudram,
Sub-Registrar Office,
Tiruchengode Taluk,
Namakkal District.
2. The Inspector General of Registration,
100, Santhome High Road,
Mullima Nagar, Mandavelipakkam,
Raja Annamalaipuram,
Chennai -28.
N. KIRUBAKARAN,J.
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W.P. NO. 13282 of 2021
AND
T.V. THAMILSELVI,J.
nv
W.P. No. 13282 of 2021
25.06.2021
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