Madras High Court
State Bank Of India vs The Sub Registrar Joint on 7 March, 2023
W.P(MD)No.4255 of 2023
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 07.03.2023
CORAM :
THE HONOURABLE MR.JUSTICE R.SUBRAMANIAN
and
THE HONOURABLE MRS.JUSTICE L.VICTORIA GOWRI
W.P(MD)No.4255 of 2023
and
WMP(MD)No.4029 of 2023
State Bank of India,
Stressed Asset Recovery Branch (SARB),
Represented by Chief Manager,
N.Suresh Babu,
No.8, Dr.Ambedkar Road,
1st Floor, Madurai-625 020. ... Petitioner
vs.
1. The Sub Registrar Joint 1,
Tirunelveli Registrar Office,
Tirunelveli District.
2. The Sub Registrar Joint 2,
Tirunelveli Registrar Office,
Tirunelveli District.
3. The Assistant Commissioner (ST),
Commercial Tax Department,
Palayamkottai Assessment Circle,
Palayamkottai, Tirunelveli-627 002.
4. M/s.H.M.Textiles Private Limited,
Represented by its Director,
Kishore M.Sethia, No.66, Robertson Road,
R.S.Puram, Coimbatore-641 002. ... Respondents
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1/7
W.P(MD)No.4255 of 2023
PRAYER : Writ Petition filed under Article 226 of the
Constitution of India, for issuance of a Writ of Certiorarified
Mandamus, calling for the records relating to the impugned
proceeding of the 1st respondent dated 15.02.2023 in RFL/Tirunelveli
Joint 1/6/2023 and quash the same and direct the 1st Respondent to
register the Sale Certificate dated 07.09.2022 issued in respect of
the schedule mentioned property in favour of the 4th Respondent and
consequently direct the 1st and 2nd Respondents to efface / delete the
encumbrance attachment entry L.No.1/2022 registered before the 1st
Respondent and to efface / delete the encumbrance attachment
entry Doc.No.3029/2017, registered before the 2nd Respondent as
against the schedule mentioned property.
For Petitioners : Mr.N.Dilip Kumar
For R1 to R3 : Mr.M.Prakash
Additional Government Pleader
ORDER
(Order of the Court was made by R.SUBRAMANIAN, J.)
Challenge in this writ petition is to the Check Slip issued
by the Registering Officer on 15.02.2023 refusing to register a sale
certificate issued by the Bank on the ground that an attachment
made by the Commercial Taxes Department on 15.09.2017 for tax
arrears to the tune of Rs.1,83,93,095/- is subsisting.
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W.P(MD)No.4255 of 2023
2. Mr.Dilip Kumar, learned counsel appearing for the
petitioner Bank would submit that in view of Section 26E of the
Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002, the Bank's claim has a
priority over all other claims. The said provision reads as follows:-
''26E. Priority to secured creditors.—Notwithstanding
anything contained in any other law for the time being in force,
after the registration of security interest, the debts due to any
secured creditor shall be paid in priority over all other debts and
all revenues, taxes, cesses and other rates payable to the
Central Government or State Government or local authority.
Explanation.—For the purposes of this section, it is hereby
clarified that on or after the commencement of the Insolvency
and Bankruptcy Code, 2016 (31 of 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.]''
3. He would further submit that mortgages in favour of the
petitioner Bank were created on 02.07.2003, 06.07.2007,
10.11.2008 and 08.04.2013. Action under the SARFAESI Act was
initiated and Bank issued a possession notice on 17.09.2014. An
application under Section 14 was filed before the District Collector,
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W.P(MD)No.4255 of 2023
Tirunelveli, on 07.08.2015 and physical possession of the property
was taken by the Bank on 23.09.2015. Thereafter, the Bank took
steps to sell the property and eventually, the property was sold in
the auction that was held on 17.05.2022 and a sale certificate was
issued on 07.09.2022.
4. He would also invite our attention to the judgment of the
Full Bench of this Court reported in 2016 (6) CTC 769, Assistant
Commissioner vs. The Indian Overseas Bank, wherein, the Full
Bench of this Court had held that in view of Section 41 of the
Security Interest and Recovery of Debts Laws and Miscellaneous
Provisions (Amendment) Actof 2016, the Bank's right under the
mortgage will supersede the right of the Commercial Taxes
Department under the attachment. He would also draw our
attention to the judgment of the Division Bench of this Court in
Tamil Nadu Mercantile Bank Limited vs. The Joint-I Sub
Registrar Office, Madurai and others reported in 2021 (1) Writ
Law Reporter 462, wherein also, the same view was reiterated.
5. In view of the above categorical pronouncements and in
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W.P(MD)No.4255 of 2023
view of the fact that the amendment that was introduced by the
State adding Rule 55A of the Tamil Nadu Registration Rules enabling
Sub Registrars to refuse registration during subsistence of
attachments, has also been struck down by this Court in W.P.No.
2758 of 2023 dated 08.02.2023 [The Federal Bank Ltd., Rep.
by its Senior Manager, Coimbatore Division,
Coimbatore-641001 vs. The Sub Registrar, Coimbatore Road,
Pollachi-642001 and two others], the order impugned in this writ
petition cannot be sustained and the same has to be necessarily set
aside. We, therefore, have no hesitation in allowing the writ petition.
6. The Writ Petition stands allowed and the impugned Check
Slip issued by the Registering Officer on 15.02.2023 is set aside.
There will be a direction to the first respondent to register the sale
certificate. Registration shall be done within a period of 30 days
from today. No costs. Connected miscellaneous petition is closed.
NCC : Yes / No [R.S.M.,J.] & [L.V.G.,J.]
Index : Yes / No 07.03.2023
Internet : Yes
bala
https://www.mhc.tn.gov.in/judis
W.P(MD)No.4255 of 2023
To
1. The Sub Registrar Joint 1,
Tirunelveli Registrar Office,
Tirunelveli District.
2. The Sub Registrar Joint 2,
Tirunelveli Registrar Office,
Tirunelveli District.
3. The Assistant Commissioner (ST),
Commercial Tax Department,
Palayamkottai Assessment Circle,
Palayamkottai,
Tirunelveli-627 002.
https://www.mhc.tn.gov.in/judis
W.P(MD)No.4255 of 2023
R.SUBRAMANIAN, J.
and
L.VICTORIA GOWRI, J.
bala
ORDER MADE IN
W.P(MD)No.4255 of 2023
DATED : 07.03.2023
https://www.mhc.tn.gov.in/judis
