Madras High Court
Tamilnad Mercantile Bank Ltd vs The Sub-Registrar on 21 September, 2022
W.P(MD) No.19684 of 2019
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 21.09.2022
CORAM:
THE HONOURABLE MR.JUSTICE R.MAHADEVAN
and
THE HONOURABLE MR.JUSTICE J.SATHYA NARAYANA PRASAD
W.P.(MD) No.19684 of 2019
Tamilnad Mercantile Bank Ltd.,
Having one of its branches at
Sakthi Sivam Theatre Complex,
Door No.28, Naicker New Street,
Simmakkal, Madurai – 625 001
Madurai District,
rep. by the Chief Manager/Authorised Officer,
Mr.R.Edward Paulraj ... Petitioner
-vs-
1.The Sub-Registrar,
Office of the Sub-Registrar,
Chockikulam SD, Madurai North,
Madurai North Registration District,
Madurai.
2.Vasantha
3.M/s.J.V.R.Construction
Rep. by its Proprietor Mr.S.Ravikumar
4.Mr.S.Ravikumar
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W.P(MD) No.19684 of 2019
5.G.Ilankumaran
6.Rajinikanth Jayaseelapandian ... Respondents
PRAYER: Petition filed under Article 226 of the Constitution of India,
to issue a Writ of Certiorarified Mandamus, calling for the records
relating to the attachment entries on the file of the Sub-Registrar,
Chockikulam SD, Madurai North, Madurai North Registration District
registered as against Survey Nos.390/9 & 390/5 more fully described in
the schedule and quash the same and for a consequential direction to the
first respondent to efface/delete the said adverse encumbrance entries and
register the sale certificate dated 21.02.2019 executed by the petitioner –
Bank in favour of the 6th respondent within a reasonable time period to be
fixed by this Hon'ble Court.
For Petitioner : Mr.N.Diip Kumar
For Respondents : Mr.S.R.A.Ramachandran
Additional Government Pleader
for R1
No Appearance for R2 to R6
ORDER
(Order of the Court was made by R.MAHADEVAN, J.)
This Writ Petition has been filed seeking for deletion of the entries
made on the file of the Sub-Registrar, Chokkikulam, Madurai North and
for consequential direction to direct the first respondent to register the
sale certificate dated 21.02.2019.
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W.P(MD) No.19684 of 2019
2. Record of proceedings shows that when the writ petition was
taken up for admission, this Court by order dated 13.09.2019, has passed
the following order:-
“Mr.A.K.Baskarapandian, Special Government Pleader,
takes notice for the first respondent. Notice to the respondents
2 to 6 returnable by 04.10.2019. Private notice is also
permitted.
2.This Writ Petition has been filed seeking for deletion
of the entries made on the file of the Sub-Registrar,
Chokkikulam, Madurai North and for consequential direction
to direct the first respondent to register the sale certificate
dated 21.02.2019.
3.It is seen from the records that the third respondent
had availed loan from the petitioner Bank in the year 2012 and
had created a mortgage by virtue of deed of mortgage dated
06.08.2012 and 11.11.2014 and the same was registered on the
file of the first respondent. He committed default in repayment
of the loan and the account was classified as a non performing
asset on 31.10.2017 and proceedings were initiated under the
SARFAESI Act. After following the procedure, the property
was ultimately brought for auction sale and the property was
sold in the auction sale in favour of the sixth respondent, who
was the highest bidder, for an amount of Rs.50 lakhs. The
entire amount has been paid by the 6th respondent to the
petitioner Bank. When the 6th respondent attempted to register
the sale certificate before the first respondent, the first
respondent refused to receive the document on the ground that
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W.P(MD) No.19684 of 2019
there is already an order of attachment against the property by
virtue of the order passed in I.A.No.27/2018 in O.S.No.
16/2018 and the said order of attachment is reflected in the
encumbrance certificate. Aggrieved by the same, the present
writ petition has been filed.
4.The learned counsel for the petitioner brought to the
notice of this Court a judgment of the Full Bench of this Court
in the Assistant Commercial Tax Officer, (CT) v. Indian
Overseas Bank, reported in 2016 (6) CTC 769, wherein, the
Full Bench has held that the secured creditor will have a
priority of charge as against all the other charges and that such
entries made in the encumbrance certificate cannot prevent the
secured creditor for bringing the property for sale and
consequently registering the sale certificate. This judgment was
followed by the Division Bench of this Court in W.P.(MD) No.
4861/2018 by order dated 07.03.2018.
5.In our considered view, the facts of the present case is
also squarely covered by the judgment referred supra.
6.In view of the above, there shall be an interim
direction to the first respondent to receive the sale certificate
dated 21.02.2019 executed by the petitioner Bank in favour of
the 6th respondent and register the same, pending disposal of
this writ petition.
7.Insofar as the deletion of the entries already made on
the file of the first respondent, the same will be decided after
the private respondents enter appearance. It is also made clear
that the respondents 2 to 5 shall not deal with the property in
question pending disposal of the writ petition.
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W.P(MD) No.19684 of 2019
8. Post this writ petition on 04.10.2019.”
3. Today, when the matter was taken up for hearing, the learned
counsel for the petitioner submitted that the said interim direction has not
been complied with. He further submitted that as observed by this Court
in the above said interim order, the petitioner / secured creditor will have
a priority of charge as against all the other charges and therefore, the
adverse entries in the encumbrance certificate cannot prevent the
petitioner from bringing the property for sale and consequently, to
register the sale certificate. In support of the said contention, the learned
counsel for the petitioner relied upon a Division Bench judgment of this
Court in the case of Tamil Nadu Mercantile Bank Limited Vs. The Joint
I Sub Registrar, Madurai and others reported in 2021-1-WLR 462.
4. Heard Mr.N.Dilip Kumar, learned counsel for the petitioner,
Mr.S.R.A.Ramachandran, learned Additional Government Pleader
appearing for the first respondent. There is no representation for the
respondents 5 and 6. Notice sent to the respondents 2 to 4, returned with
an endorsement 'Left' and therefore, this Court is inclined to pass orders
on merits.
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W.P(MD) No.19684 of 2019
5. In the judgment relied on by the learned counsel for the
petitioner reported in 2021-1-WLR 462, the Division Bench of this Court
has held as follows:-
“9. Reliance has been made on the order passed by the
learned Single Judge in Govindhji Jewat & Co., v. Rukmani
Mills Ltd., reported in 2020 (6) CTC 313, wherein, the
aforesaid principle has been reiterated. In the said case, the
learned Single Judge has held that the mortgage being earlier, it
creates a right in favour of the mortgagee and therefore, even
the order of attachment passed by the Civil Court will have to
yield. In the said judgment also, the learned Single Judge made
reliance upon the judgment of the Division Bench in
S.Senthamarai Kannan v. Chief Manager, Canara Bank, Palani
Branch, Dindigul District [CDJ 2020 MHC 2555]. 10. In the
case on hand also, the registered mortgage was admittedly
prior. The 9th respondent in W.P. (MD)No.6976 of 2020 / 8th
respondent in W.P. (MD)No.1101 of 2021 sought for an
attachment in an arbitration proceedings, in which, the
petitioners Bank was obviously not a party, as the transaction
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W.P(MD) No.19684 of 2019
has got nothing to do with it. The said order was also
subsequent to the mortgage created in favour of the petitioner.
Now, a third party right has also been created through the Sale
Certificate issued in favour of the auction purchasers, viz.,
respondents 7 & 8 in W.P.(MD)No.6976 of 2020 and the 7th
respondent in W.P.(MD)No.1101 of 2021. If the 1st respondent
raise a contention that in view of the recording of the
attachment order by it already, the subsequent sale deed cannot
be registered, then the very act of recording the said interim
order of attachment passed by the Tribunal itself ought not to
have been done, as there was a subsisting mortgage on that
date.
13. Therefore, looking from any perspective, we are of
the view that the petitioner Bank cannot be denied the relief as
sought for. In such view of the matter, both the writ petitions
stand allowed. The first respondent in both the writ petitions
are directed to register the Sale Certificates issued by the
petitioner Bank in favour of the respondents 7 & 8 in W.P.
(MD)No.6976 of 2020 and the 7th respondent in W.P.(MD)No.
1101 of 2021. Consequently, the encumbrance / attachment
entry made on the file of the first respondent with respect to the
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W.P(MD) No.19684 of 2019
properties, which are subject matter of the two mortgage deeds
and the subject matter of these writ petitions, are directed to be
deleted by the first respondent. The aforesaid exercise shall be
carried out within a period of four weeks from the date of
receipt of a copy of this order. There shall be no order as to
costs. Consequently, connected miscellaneous petitions are
closed.”
6. On a perusal of the aforesaid judgments, we are of the view that
the facts of the present case are also squarely covered by the judgments
referred to supra.
7. In view of the above, following the Division Bench judgments
of this Court referred to supra, the impugned order passed by the first
respondent is hereby quashed. Consequently, the encumbrance /
attachment entry made on the file of the first respondent with respect to
the property in question shall be deleted. The aforesaid exercise shall be
carried out within a period of four weeks from the date of receipt of a
copy of this order.
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W.P(MD) No.19684 of 2019
8.With the aforesaid directions, this writ petition is allowed. No
costs.
[R.M.D., J.] [J.S.N.P., J.]
21.09.2022
Index : Yes / No
Internet : Yes / No
pkn
To
1.The Sub-Registrar,
Office of the Sub-Registrar,
Chockikulam SD, Madurai North,
Madurai North Registration District,
Madurai.
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https://www.mhc.tn.gov.in/judis
W.P(MD) No.19684 of 2019
R.MAHADEVAN, J.
and
J.SATHYA NARAYANA PRASAD, J.
pkn
W.P.(MD) No.19684 of 2019
21.09.2022
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