Madras High Court
M/S.M.L.Exports vs The Sub-Registrar on 7 September, 2023
W.P.(MD)No.21646 of 2023
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 07.09.2023
CORAM:
THE HONOURABLE MR.JUSTICE B.PUGALENDHI
W.P.(MD)No.21646 of 2023
M/s.M.L.Exports,
Represented by its Director,
Mr.Velmani,
7-A, Ramakrishnapuram I Cross,
Karur - 639 001. ... Petitioner
versus
1. The Sub-Registrar,
Mela Karur,
Karur District.
2. The Authorized Officer,
UCO Bank,
Zonal Office, First Floor,
No.22, Fathar Randy Street,
Coimbatore – 641 002. ... Respondents
Writ Petition filed under Article 226 of the Constitution of India,
seeking for the issuance of Writ of Certiorarified Mandamus, to call for
the records relating to the proceedings of the 1st respondent refusal
check slip in No.RFL/Melakarur/60/2020 dated 29.10.2020 and quash
the same and direct the 1st respondent to register the sale certificate
1/8
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W.P.(MD)No.21646 of 2023
dated 28.09.2020 issued by the 2nd respondent in respect of the
properties comprised in Karur District, Manmangalam Taluk, Aathur
Village in Survey Nos.355/5 and 355/6.
For Petitioner : Mr.R.Murali
For R1 : Mr.P.T.Thiraviam,
Additional Government Pleader
For R2 : Mr.A.V.Sureshkumar
ORDER
This writ petition has been filed challenging the refusal slip made
by the first respondent by his proceedings dated 29.10.2020 refusing to
register the sale certificate issued by the second respondent in favour of
the petitioner.
2. The learned counsel appearing for the petitioner submits that
the petitioner has purchased properties comprised in Survey Nos.355/5,
355/6 situated at Aathur Village, Manmangalam Taluk, Karur District,
in an auction conducted by the second respondent Bank on 17.09.2020.
The petitioner was also issued with a Sale Certificate by the second
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W.P.(MD)No.21646 of 2023
respondent Bank on 28.09.2020. Thereafter, the petitioner has
submitted an application to the first respondent on 29.10.2020 for
registration of documents based on the sale certificate. In the
meantime, a third party has filed a money suit as against one
Palaniammal, a borrower of the second respondent Bank and obtained
an order of attachment of the subject properties on 11.11.2014.
Therefore, the first respondent has refused to register the document sale
certificate issued by the second respondent on the ground that there is
an order of attachment in respect of the subject properties.
3. The learned counsel appearing for the petitioner further
submits that even before the order of attachment dated 11.11.2014, the
subject properties were mortgaged with the second respondent Bank on
17.03.2014 and therefore, the order passed by the first respondent
rejecting the documents submitted by the petitioner for registration
based on the sale certificate issued by the second respondent Bank is
not proper. In support of his contention, he has also relied upon a
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W.P.(MD)No.21646 of 2023
Judgment of this Court, in the case of M/s.Cholamandalam
Investment and Finance Company Ltd., Tiruchirappalli vs. The
District Registrar, Ariyallur and others (W.P.(MD)No.674 of 2023
dated 31.08.2023).
4. Mr.A.V.Sureshkumar, who takes notice for the second
respondent, on instructions, submits that the properties, which were
sold in an auction initiated under SARFAESI proceedings were
mortgaged with the second respondent Bank by the said Palaniammal
on 17.03.2014, however, by way of a collusive suit, an order of
attachment was obtained on 11.11.2014.
5. This Court considered the rival submissions and perused the
materials available on record.
6. In the case of M/s.Cholamandalam Investment and Finance
Company Ltd., Tiruchirappalli vs. The District Registrar, Ariyallur
and others (W.P.(MD)No.674 of 2023 dated 31.08.2023), relied upon
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W.P.(MD)No.21646 of 2023
by the learned counsel for the petitioner, this Court has observed as
follows:
“13. Section 26-E of the Act, 2002 expressly and
unambiguously provides for a priority right to a secured
creditor over all other claims.
14. The debt of the fourth respondent was an
unsecured debt. The mortgage of the property in favour
of the present petitioner or the judgment-debtor under
the award was prior to the attachment of the property.
15. The rights of the secured-creditor have a
priority charge. The Apex Court, in the case of Kotak
Mahindra Bank Limited vs. Girnar Corrugators Private
Limited and others, reported in (2023) 3 SCC 210, has
held that the legislature has expressly and
unambiguously provided for a legal framework
exclusively on the issue of 'priority' of payment of debt by
including Section 26-E in the Act, 2002. In the said case,
it was held that the recovery under the Act, 2002 with
respect to the secured asset would prevail over the
recovery of the award amount under the Micro, Small
and Medium Enterprises Development Act, 2006.
16. In light of that, the second respondent shall not
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W.P.(MD)No.21646 of 2023
refuse to register the sale certificate dated 08.12.2022 in
respect of the the property measuring an extent of 2400
sq.ft., in Plot No.9, bearing Survey No.252/11 and
T.S.No.59/1 (including its pathway right in Survey No.
233/4), Kalappu Colony, Malaiyappan Salai, Thuraiyur
Municipality, Tiruchirappalli District, on the ground
that there is an order of attachment of the Civil Court in
the execution proceedings taken at the behest of the
fourth respondent. ”
6. Admittedly, the subject property was mortgaged with the
second respondent on 17.03.2014 and the date on which, charge was
created in favour of the second respondent Bank. But, an order of
attachment made by the Sub Court, Karur was only on 11.11.2014.
7. Following the Judgment cited supra, this writ petition is
allowed setting aside the refusal check slip made by the first respondent
dated 29.10.2020. The first respondent shall register the document
produced by the petitioner based on the sale certificate dated
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W.P.(MD)No.21646 of 2023
28.09.2020 issued by the 2nd respondent in respect of the properties
comprised in Survey Nos.355/5 and 355/6 situated at Karur District,
Manmangalam Taluk, Aathur Village. No costs.
07.09.2023
ogy
NCC : Yes / No.
Index : Yes / No.
Internet : Yes / No.
To
1. The Sub-Registrar,
Mela Karur,
Karur District.
2. The Authorized Officer,
UCO Bank,
Zonal Office, First Floor,
No.22, Fathar Randy Street,
Coimbatore – 641 002.
https://www.mhc.tn.gov.in/judis
W.P.(MD)No.21646 of 2023
B.PUGALENDHI, J.
ogy
W.P.(MD)No.21646 of 2023
07.09.2023
https://www.mhc.tn.gov.in/judis
