Madras High Court
Punjab National Bank vs The Sub-Registrar on 25 March, 2022
W.P.No.2125 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 25.03.2022
CORAM
THE HONOURABLE MR.JUSTICE M.DHANDAPANI
W.P.No.2125 of 2022
W.M.P.No.2292 of 2022
Punjab National Bank,
Represented by its Chief Manager ... Petitioner
Vs.
1.The Sub-Registrar,
Kinathukkadavu,
Coimbatore - 642 109.
2.M/s.Nivaa Castings India Private Limited,
No.12, Nadesagounder Layout II,
Rathinapuri,
Coimbatore - 641 027,
Represented by its Managing Director Mr.T.Bharath
3.The Assistant Commissioner,
Commercial Tax Officer,
Trichy Road, Coimbatore - 641 018.
4.The Assistant Commissioner,
Central GST and Central Excise,
Pollachi (Division),
Jothi Nagar, D Colony,
Pollachi - 642 001. ... Respondents
1
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W.P.No.2125 of 2022
Prayer: Writ Petition filed under Article 226 of the Constitution of India to
issue a Writ of Certiorarified Mandamus calling for the records of the first
respondent namely refusal check slip No.RFL/Kinathukkadavu/41/2021
dated 30.12.2021 and quash the same as null and void and consequently to
direct the first respondent to register the Sale Certificate dated 02.11.2021
issued by the petitioner bank in favour of auction purchaser, Mr.Alavikutty.
For petitioner : Mr.M.L.Ganesh
For Respondents : Mr.Yogesh Kannadasan
Special Government Pleader
ORDER
The petitioner has filed this petition to issue a Writ of Certiorarified
Mandamus calling for the records of the first respondent namely refusal
check slip No.RFL/Kinathukkadavu/41/2021 dated 30.12.2021 and quash
the same as null and void and consequently to direct the first respondent to
register the Sale Certificate dated 02.11.2021 issued by the petitioner bank
in favour of auction purchaser, Mr.Alavikutty.
2. Mr.Yogesh Kannadasan, learned Special Government Pleader
takes notice for the respondents. In view of the limited relief sought for in
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W.P.No.2125 of 2022
this petition and on the consent expressed by the learned counsel appearing
on either side, this petition is taken up for final disposal.
3. The case of the petitioner/bank is that the company M/s.Sanees
Alloys Private Ltd, had availed credit facilities from State Bank of
Hyderabad (SBH) against the collateral security of immovable property
situated at Kodangipalayam Village, Pollachi Taluk amount and hence, the
said account was slipped into NPA (A Non - performing asset) on
30.09.2016 as per RBI guidelines, for which, the petitioner bank had issued
demand notice on 03.10.2016 and took possession of property on
21.02.2017 under Section 13(4) of the SARFAESI Act, 2002. On
12.08.2021, the said properties were sold to the auction purchaser viz.,
N.Alavikutty by the petitioner's Bank for a sale consideration of Rs.3.68
Crores and accordingly, sale certificate was issued on 02.11.2021 to him.
The said sale certificate was presented before the first respondent and the
same was rejected on 30.12.2021 on the ground that there is an attachment
effected by the respondents 3 & 4 which is not binding on the petitioner
being the secured creditor. Challenging the rejection, the present Writ
Petition has been filed by the petitioner for the above relief.
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W.P.No.2125 of 2022
4. Though very many grounds have been raised, learned counsel for
the petitioner submits that the issue involved in the present writ petition is
squarely covered by the earlier order passed by this Court in W.P.No.17901
of 2020, order dated 11.12.2020, accordingly, he prayed for the same relief.
The relevant portions in the above said order are extracted hereunder:
"6. The issue involved in the present Writ Petition is
squarely covered by the earlier Order passed by this Court in
W.P.No.16523 of 2020 dt. 07.12.2020. The relevant portions in the
order are extracted hereunder:
10. The issue involved in the present writ petition
is squarely covered by the earlier orders passed by this Court.
One such order, passed in W.P.No.7497 of 2019 dated
26.04.2019 can be relied upon for the purpose of this case. The
relevant portions of the order are extracted hereunder:
''3. The issue as to whether the 2nd respondent is
entitled to refuse registration of the document presented by the
petitioner on the ground that the subject matter property is
under Court attachment, is no more res integra, in view of the
several orders passed by this Court in similar issue deciding
against the Registration Department. One such recent order
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W.P.No.2125 of 2022
was passed by this Court in W.P.No.1094/2019 dated
26.03.2019, wherein it is observed as follows:
“8. The above issue involved in this case is no
more res integra in view of the fact that the very same issue
was already considered by this Court and decided against the
registering authority in a decision made in
W.P.No.10647/2007 dated 13.10.2018. In fact, this Court,
while passing the said order, followed the order passed in
W.P.(MD).No.2632/2012 dated 13.03.2013, which in turn,
followed the decision of the Apex Court reported in 1985 (2)
SCC 167 (Balkrishan Gupta v. Swadeshi Polytex Limited).
Paragraph Nos. 7 and 8 of the said order reads as follows:
7. The point for consideration in this writ petition
is whether the respondent is entitled to refuse registration of
the sale deed on the ground that the subject matter properties
of the sale deed are under Court attachment. The very same
issue was considered by this Court in W.P.No.36079 of 2015
reported in 2016 (3) CTC 493 (S.Praveen Bohra vs. Joint-I
Sub-Registrar) and the learned Judge found that the order of
attachment cannot be a bar to register the document. In order
to arrive at such conclusion, the learned Judge relied on
several decisions of this Court as well as Apex Court. At
paragraph Nos.6 to 9 of the said decision, the learned Judge
has observed as follows:
6. It is relevant to refer to the unreported judgment of
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W.P.No.2125 of 2022
the Madurai Bench of Madras High Court in W.P.(MD) No.
2635 of 2012, dated 13.03.2013, in the case of K.D.P.
Properties Private Limited v. The SubRegistrar, relied on by
the learned counsel for the petitioner, wherein, in paragraph
No. 18, a reference was made to the decision of the Hon'ble
Apex Court reported in (1985) 2 SCC 167, Balkrishan Gupta v.
Swadeshi Polytex Limited, and it was held as follows:
“18. In (1985) 2 SCC 167 (supra), the Hon'ble Supreme
Court has held as under:
“30. The consequence of attachment of
certain shares of a company held by a shareholder for
purposes of sale in a proceeding under section 149 of the Land
Revenue Act is more or less the same. The effect of an order of
attachment is what Section 149 of the Land Revenue Act itself
says. Such attachment is made according to the law in force for
the time being for the attachment and sale of movable property
under the decree of a civil court. Section 60 of the Code of
Civil Procedure, 1908 says that except those items of property
mentioned in its proviso, lands, houses or other buildings,
goods, money, banknotes, cheques, bills of exchange, hundis,
promissory notes, Government securities, bonds or other
securities of money, debts, shares in a corporation and all
other saleable property, movable or immovable, belonging to a
judgment-debtor, or over which, or the profits of which, he has
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W.P.No.2125 of 2022
a disposing power which he may exercise for his own benefit,
whether the same be held in the name of the judgment-debtor,
or by another person in trust for him or on his behalf, is liable
for attachment and sale in execution of a decree against him.
Section 64 of the Code of Civil Procedure, 1908, states that
where an attachment of a property is made, any private
transfer or delivery of the property attached or of any interest
therein and any payment to the judgment debtor of any debt,
dividend or other monies contrary to such attachment, shall be
void as against all claims endorceable under the attachment.
What is forbidden under Section 64 of the Code of Civil
Procedure is a private transfer by the judgment-debtor of the
property attached contrary to the attachment, that is, contrary
to the claims of the decree holder under the decree for
realisation for which the attachment is effected. A private
transfer under Section 64 of the Code of Civil Procedure is not
absolutely void, that is, not void as against all the world but
void only as against the claism enforceable under the
attachment. Until the property is actually sold the judgment
debtor retains title in the property attached. Under Rule 76 of
Order 21 of the Code of Civil Procedure, 1908, the shares in a
corporation which are attached may be sold through a broker.
In the alternative such shares may be sold in public auction
under Rule 77 thereof. On such sale either under Rule 76 or
under Rule 77, the purchaser acquires title. Until such sale is
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W.P.No.2125 of 2022
effected, all other rights of the judgment debtor remain
unaffected even if the shares may have been seized by the
officer of the court under Rule 43 of Order 21 of the Code of
Civil Procedure, 1908 for the purpose of effecting the
attachment, or through a Receiver or though an order in terms
of Rule 46 of Order 21 of the Code of Civil Procedure may
have been served on the judgment debtor or on the company
concerned”.
19. The dictum laid down in the above judgment
(1985) 2 SCC 167 (supra), gives a fitting answer to the issue
raised in this writ petition. So far as the order of attachment
passed by the DRT is concerned, the transfer is not void
generally but it is void only as against the claims enforceable
under the said attachment. Therefore, I am of the opinion that
the sale of the property attached cannot be construed as illegal
sale. However, if the 2nd respondent bank exercises its right as
against the property, the petitioner cannot raise any objection
because the sale of the vendor in favour of the petitioner is
void in respect of the order of attachment obtained by the 2nd
respondent bank. So, even if the property is sold in favour of
the petitioner, the 2nd respondent bank can always exercise its
right as against the said property.
20. In view of the above finding, I am of the
opinion that the sale of the subject property pending the order
of attachment is void only as against the claims enforceable
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W.P.No.2125 of 2022
under the order of said attachment and not in respect of other
claims. Therefore, the sale of the property, which is under
attachment, cannot be said as illegal.
In the light of what is stated above, the writ
petition is allowed and the 1st respondent-Sub Registrar,
Kochiadai, Madurai, is directed to release the registered
document in favour of the petitioner within a period of one
week from the date of receipt of a copy of this order. No costs.”
7. It is also worthwhile to refer to the unreported
judgment of Madurai Bench of Madras High Court in
W.P.(MD) No. 14388 of 2014, dated 01.09.2014, in the case of
M. Chitra v. The Sub Registrar, relied on by the learned
counsel for the petitioner, wherein, in paragraph No. 5, it was
held as follows:—
“5. In such circumstances, merely because there is
an order of attachment passed by a Civil Court, the same
cannot be a ground to refuse to register the Memorandum of
Deposit of Title Deeds. If any deposit of title deeds is created
in respect of the said property pursuant to the right acquired
by the petitioner, vide settlement deed, dated 04.07.2011 it is
always subject to further orders to be passed by the Civil
Court. The petitioner's case is that she acquired title by way of
settlement deed dated 04.07.2011, much prior to the order of
attachment. Further, the learned counsel appearing for the
petitioner placed reliance on Order 38, Rule 10 C.P.C. stating
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W.P.No.2125 of 2022
that attachment before judgment shall not affect the rights,
existing prior to the attachment, of persons not parties to the
suit, nor bar any person holding a decree against the
defendant from applying for the sale of the property under
attachment in execution of such decree. The lending bank
namely, Canara Bank, Vadamadurai if satisfies with the title of
the petitioner over the property, can request the Registrar to
register the document. In such circumstances, merely because
an order has been passed by the Civil Court effecting
attachment, cannot be a bar for entertaining a document for
registration. Hence, the reasons assigned by the respondent
refusing to register, vide his memo, dated 25.07.2014, is not in
accordance with law beyond the scope of Section 71 of the
Act.”
8. Thus, it is crystal clear that it is well settled
principle of law that the order of attachment cannot be a bar to
register the document. Therefore, I am of the view that there is
no need for this petitioner to file an appeal. I am of the opinion
that the sale of the subject property, pending the order of
attachment is void only as against the claims enforceable
under the order of said attachment and not in respect of other
claims. Therefore, I am of the opinion that the sale of the
property attached cannot be construed as illegal sale.
4. Accordingly, I find that the reasons stated by
the 2 nd respondent in refusing to register the document,
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W.P.No.2125 of 2022
cannot be sustained. Thus, the Writ Petition is allowed and the
impugned order is set aside. Consequently, the matter is
remitted back to the 2 nd respondent to consider the document
viz., Decree dated 03.03.2018, submitted by the petitioner, for
registration. Such exercise shall be done by the 2 nd
respondent within a period of two weeks from the date of
receipt of a copy of this order. No costs.''
11. It can be seen from the above order that the
learned Single Judge has placed reliance upon the orders
passed by the Hon'ble Division Bench and also the Judgment
of the Hon'ble Apex Court, which was in turn relied upon by
the Division Bench. The ratio in the above order is that an
order of attachment cannot be a bar to register a document.
The reason being that the sale of a subject property pending
the order of attachment is void only as against the claims
enforceable under the order of attachment and not in respect of
other claims. Therefore, the sale of the property, which is
under attachment, cannot be said to be illegal where the
parties to the transaction have nothing to do with the pending
proceedings in which the order of attachment was passed.
7. The Attachment Order passed in the Civil Suit will not in
any way bind the 2nd respondent Bank since the mortgage was
created in the year 2009 itself and the Suit in question was filed
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W.P.No.2125 of 2022
only in the year 2017. The 2nd respondent being a secured creditor,
will have a priority in recovering the debt. Even otherwise the sale
of property which is under attachment, cannot be said to be illegal
where the parties to the transaction have nothing to do with the
civil proceedings in which the Attachment Order was passed. The
Order of Attachment cannot be a bar to register the Sale
Certificate presented for registration before the 1st respondent."
5. The learned Special Government Pleader appearing for the
respondents supported the refusal made by the first respondent and he
prayed for dismissal of the present writ petition.
6. In view of the above decision of this Court in W.P.No.17901 of
2020, order dated 11.12.2020, the impugned order passed by the first
respondent is set aside and the first respondent is directed to register the
Sale Certificate dated 02.11.2021, presented by the petitioner, if it is
otherwise in order, on payment of the requisite Stamp Duty and Registration
Charges by the petitioner.
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W.P.No.2125 of 2022
7. Accordingly, this writ petition is allowed. No costs. Consequently,
connected miscellaneous petition is closed.
25.03.2022
Index : Yes / No
Internet : Yes / No
Speaking Order/Non-Speaking Order
tri/nhs
To
1.The Sub-Registrar,
Kinathukkadavu,
Coimbatore - 642 109.
2.The Assistant Commissioner,
Commercial Tax Officer,
Trichy Road, Coimbatore - 641 018.
3.The Assistant Commissioner,
Central GST and Central Excise,
Pollachi (Division),
Jothi Nagar, D Colony,
Pollachi - 642 001.
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W.P.No.2125 of 2022
M.DHANDAPANI,J.
tri/nhs
W.P.No.2125 of 2022
W.M.P.No.2292 of 2022
25.03.2022
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