Madras High Court
Chengalpet Steel Rolling Mill vs The Sub Registrar on 18 September, 2025
Author: G.K.Ilanthiraiyan
Bench: G.K.Ilanthiraiyan
W.P.No.11343 of 2017
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 10.09.2025
PRONOUNCED ON : 18.09.2025
CORAM:
THE HONOURABLE MR. JUSTICE G.K.ILANTHIRAIYAN
W.P.No.11343 of 2017
and
W.M.P.Nos.12286 & 26664 of 2017
Chengalpet Steel Rolling Mill,
Rep. by its Partner M.Ugamraj
19/7, Thiru Nagar, Phase III,
Near Nathamuni Theatre
Villivakkam,
Chennai – 600 049. .... Petitioner
Vs
1. The Sub Registrar,
Chengalpattu Joint-II,
Kancheepuram High Road,
Natham,
Chengelpattu – 603 001
Kancheepuram District.
2. State Bank of India,
Chengalpattu Branch,
No.9, Vardha Reddy Street,
Vedachalam Nagar,
Chenpalpattu,
Kanchipuram District – 603 001.
Page 1 of 18
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W.P.No.11343 of 2017
3. B.Mahaveer,
Partner,
M/s.Harman Industries,
No.35/32, Olympic Colony,
Near D.A.V.Boys School,
Anna Nagar West, Chennai – 600 050. .... Respondents
Prayer: Writ Petition filed under Article 226 of the Constitution of India
for issuance of a Writ of Certiorarified Mandamus, praying to call for the
records of the 1st respondent comprised in the entry pertaining to the
registration of the Award dated 02.09.2016 passed in Case No.LSP 1604
of 2015 by the Lok Adalat, District Legal Services Authority,
Chengalpattu and the consequent sale certificate issued by the 2nd
respondent in favour of the 3rd respondent dated 09.09.2016, as
Document No.3 of 2017 on 08.03.2017 on the file of the 1 st respondent
and quash the same as arbitrary, illegal and without application of mind
and consequently direct the 1st respondent to delete the entry relating
thereto in Book-I maintained by him under the Indian Registration Act.
(Prayed amended vide Court order dated 31.10.2018 made in
WMP.26663 of 2017 in WP.No.11343 of 2017)
For Petitioner : Mr.Sathish Parasran
Senior Counsel
for Rahul Balaji
For Respondents
For R1 : Mr.Abhishek Murthy
Government Advocate
For R2 : Mr.M.L.Ganesh
For R3 : Mr.K.V.Babu
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W.P.No.11343 of 2017
ORDER
This Writ Petition has been filed challenging the Award
dated 02.09.2016 passed in LSP No.1604 of 2015 by the Lok Adalat,
District Legal Services Authority, Chengalpattu and the consequential
Sale Certificate issued by the second respondent in favour of the third
respondent dated 09.09.2016.
2. The petitioner owned property to an extent of 2 acres 33
cents comprised in Survey Nos.407/11A, 407/8, 401/A, 407/10C,
situated at Chettypunyam Village, No.71, Chengalpattu Taluk,
Kanchipuram District. The said property was mortgaged by the
petitioner by way of deposit of title deeds with the second respondent
and availed loan. Thereafter, the petitioner was not able to repay the said
loan amount and he had committed default. Therefore, the second
respondent filed a suit in O.S.No.25 of 1979 for foreclosure of the
mortgage. The suit was decreed on 08.03.1982. Pursuant to the said
decree, the second respondent filed E.P.No.32 of 1985 in O.S.No.25 of
1979 for execution of the decree. In the said execution proceedings, full
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satisfaction of the decree was recorded, and the execution petition was
closed by order dated 25.09.1997. It appears that such satisfaction was
recorded on account of settlement of the entire decree amount by the
third respondent herein, who claimed to be an agreement holder in
respect of the subject property.
3. Even after realising the entire decree amount, the second
respondent failed to return the original title deeds to the petitioner.
However, the second respondent colluded with the third respondent and
handed over the original title deeds pertaining to the subject property to
the third respondent. It has also been brought to the notice of this Court
that the property was never subjected to auction sale. Thereafter, the
third respondent filed a complaint before the Lok Adalat and entered into
a compromise with the second respondent and submitted the same before
the Lok Adalat. Pursuant thereto, the Lok Adalat passed an award dated
02.09.2016 in LSP No.1604 of 2015. Subsequently, the second
respondent issued a sale certificate in respect of the subject property on
09.09.2016 and presented before the first respondent for registration.
The first respondent registered the same and released the sale certificate
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in favour of the third respondent. Hence, the award passed by the Lok
Adalat and the sale certificate are under challenge in this writ petition.
4. The learned Senior Counsel appearing for the petitioner
submitted that the third respondent was not a party to the suit filed by the
second respondent. The petitioner had never entered into any agreement
with the third respondent. The petitioner had entered into an agreement
with the eighth defendant in the suit, and subsequently, the eighth
defendant made over the agreement in favour of ninth defendant.
Pursuant to the decree passed in the suit, the second respondent herein
filed an execution petition against the petitioner, and thereafter, the third
respondent was impleaded as a party to the execution proceedings.
Though the ninth defendant, through a lodgement schedule, paid the
entire decree amount to the second respondent, the suit property was
never brought for auction sale. On receipt of the decree amount, on the
filing of a full satisfaction memo filed by the second respondent, the
execution proceeding were closed on 25.09.1997. After a lapse of 19
years from the termination of execution proceedings, the third
respondent herein filed a pre-litigation complaint on 02.09.2016 seeking
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execution of a sale deed by the second respondent. On the very same
day, the second and third respondents entered into a settlement, and the
Lok Adalat passed an award dated 02.09.2016.
5. Based on the award passed by the Lok Adalat, the said
award was communicated to the first respondent. The second respondent
raised no objection and agreed to issue a sale confirmation letter in
favour of the third respondent herein. Further, the second respondent
issued a “No Objection” letter confirming that it had no right over the
subject property, stating that the entire suit claim had already been settled
in the execution proceedings through the third respondent.
6. Being the purchaser under a tripartite arrangement, the
third respondent requested the Lok Adalat to record the settlement
between them and pass order to the effect in the form of sale certificate
and to communicate the same to the first respondent. Pursuant to which,
when the sale certificate was presented for registration, the petitioner
raised objections. The petitioner also filed a writ petition before
this Court and he was at liberty to challenge the Lok Adalat award
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and the consequential sale certificate. In the meanwhile, the third
respondent has now sought for issuance of patta in respect of the subject
property.
7. The learned Senior Counsel for the petitioner submits
that the petitioner had already entered into an agreement for sale with the
eighth defendant in the suit. Thereafter, the said agreement was made
over in favour of the third respondent herein, who was the ninth
defendant in the suit. As per the agreement for sale, the eighth
defendant agreed to purchase the entire property for a total consideration
of Rs.9,00,000/-, out of which a sum of Rs.1,00,000/- was paid as
advance. It was further agreed that a sum of Rs.10,46,000/- would be
paid towards the decreetal amount to the second respondent.
Subsequently, the eighth defendant nominated the third respondent
herein to remit the balance amount of Rs.9,46,000/-. Accordingly, the
third respondent paid the said amount and filed a full satisfaction memo,
pursuant to which the Execution Court terminated the execution
proceedings by order dated 25.09.1997.
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8. In fact, the third respondent had paid the entire decreetal
amount by way of lodgment schedule, in which the petitioner was also a
party. Therefore, the petitioner was fully aware of the payment made by
the third respondent herein only with the agreement to purchase the
property. Consequently, the second respondent raised no objection to
issue sale certificate in favour of the third respondent. The sale
certificate was issued and registered by the first respondent. After the
lapse of several years, the petitioner has now challenged the Lok Adalat
award and the sale certificate.
9. A perusal of the counter filed by the third respondent and
the submissions of the learned counsel for the third respondent reveal
that the third respondent was impleaded as the ninth defendant in the suit
as well as the ninth respondent in the execution proceedings. The entire
decree amount was settled by the third respondent, and as such, the
second respondent had no objection to the issuance of sale certificate in
respect of the subject property in favour of the third respondent.
Accordingly, the Lok Adalat rightly passed an award by recording the
compromise entered into between the second respondent and the third
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respondents. Thereafter, the sale certificate was registered vide
document No.3 of 2017 dated 08.03.2017 by the first respondent and
now it is reflected in the encumbrance certificate pertaining to the subject
property. Hence, the present writ petition itself is not maintainable.
Further, the Civil Court had already granted a mortgage decree followed
by execution proceedings and the third respondent was rightly issued the
sale certificate and registered vide document No.3 of 2017.
10. Heard the learned counsel appearing on either side and
perused the materials available on record.
11. On the submissions made by the learned counsel
appearing on either side, the following issues arise for consideration in
this writ petition :
(i) Whether the award passed by the Lok Adalat is
in accordance with law.
(ii) Whether the second respondent can execute the
sale certificate in respect of the subject property in favour
of the third respondent without bringing the suit property
for auction sale.
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12. Admittedly, the petitioner mortgaged the property by
depositing the title deeds and availed loan from the second respondent.
Thereafter, the petitioner committed default and as such, the second
respondent filed a suit, which was decreed as follows :
“(3) That in default of clause 2 said supra the
plaintiff be at liberty to file an application for sale of the
'C' Schedule property for realisation of the decree amount.
(4) That if the sale proceeds from the 'C' Schedule
properties happens to be insufficient the plaintiff be at
liberty to proceed against the defendants 2 to 6 personally
for the balance due.
(5) and that the plaintiff be and hereby entitled the
sell the pledged machinery described in schedule A and B
hereunder in case if the sale proceeds from C Schedule
property happen to be insufficient the realise the decree
amount.”
13. Thus, it is clear that if the petitioner failed to make the
decree amount, the second respondent was at liberty to file an application
for sale of the subject property for realisation of the decree amount. The
judgment was passed on 22.07.1980. Pursuant to the decree, since the
petitioner failed to pay the decree amount, the second respondent filed an
execution petition in E.P.No.32 of 1985. The said execution petition was
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filed seeking an order for sale of subject property for the realisation of
the decree amount of Rs.12,49,145/- and for payment of the amount so
realised to the second respondent towards satisfaction of the decree.
14. Pending execution petition, the third respondent was
impleaded as ninth respondent on the ground that the eighth respondent
had nominated the ninth respondent to remit the decree amount after
deducting the amount already paid by the eighth respondent.
Accordingly, the third respondent paid the decree amount, and the
second respondent filed a full satisfaction memo. On recording the full
satisfaction memo, the Execution Court terminated the execution
proceedings on 25.09.1997. Thereafter, on 20.12.1997, the third
respondent filed an application before the Trial Court seeking return of
the original title documents of the subject property. The second
respondent consented to such return of documents, which were marked
as Exs.A15 to A26, before the Trial Court relating to the subject
property. Accordingly, the said application was ordered and all the
original documents were returned and handed over to the third
respondent.
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15. Thereafter, the third respondent kept quite till
14.09.2015, i.e., nearly 19 years, and then issued notice to the second
respondent, thereby called upon to issue sale certificate or to execute the
sale deed in respect of the subject property. Thereafter, on 02.09.2016,
the third respondent lodged a Pre-litigation complaint with respect to the
execution of the sale deed before the Lok Adalat, Chengalpet. On the
same day, both the second and third respondents entered into a
compromise and filed a settlement memo before the Lok Adalat.
Accordingly, the Lok Adalat passed an award on 02.09.2016 and also
communicated the same to the first respondent. As per the settlement
arrived between the second and third respondents, the second respondent
issued a sale certificate dated 08.03.2017 in favour of the third
respondent and the same was registered vide document No.3 of 2017.
16. Therefore, the subject property was not at all brought to
the auction sale. Pursuant to the remittance of the decree amount, the
third respondent was returned the original title deeds of the subject
property. Thereafter, on the basis of the settlement arrived between the
second and third respondents, a sale certificate was issued directly in
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favour of the third respondent. However, such sale certificate was not
issued by a competent authority and the banker, being the second
respondent, could not have issued the same without bringing the subject
property for auction sale. Though the decreetal amount was paid by the
third respondent through lodgement schedule, it does not mean that the
property was purchased by the third respondent. If the decree amount is
not paid, then the property should have been brought to the auction sale.
Since the decree amount was paid by the third respondent and on the full
satisfaction memo filed by the second respondent, the Execution Court
terminated the execution proceedings.
17. In this regard, the learned Senior Counsel relied upon
the Judgment of the Hon'ble Supreme Court of India reported in (2008)
2 SCC 660, in the case of State of Punjab and another Vs. Jalour
Singh, wherein it was held as follows :-
“8. It is evident from the said provisions that the
Lok Adalats have no adjudicatory or judicial functions.
Their functions relate purely to conciliation. A Lok
Adalat determines a reference on the basis of a
compromise or settlement between the parties at its
instance, and puts its seal of confirmation by making an
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award in terms of the compromise or settlement. When
the Lok Adalat is not able to arrive at a a settlement or
compromise, no award is made and the case record is
returned to the court from which the reference was
received, for disposal in accordance with law. No Lok
Adalat has the power to “hear” parties to adjudicate
cases as a court does. It discusses the subject matter
with the parties and persuades them to arrive at a just
settlement. In their conciliatory role, the Lok Adalats are
guided by the principles of justice, equity and fair play.
When the LSA Act refers to “determination” by the Lok
Adalat and “award” by the Lok Adalat the said Act does
not contemplate nor require an adjudicatory judicial
determination, but a non-adjudicatory determination
based on a compromise or settlemtn, arrived at by the
parties, with guidance and assistance from the Lok
Adalat. The “award” of the Lok Adalat does not mean
any independent verdict or opinion arrived at by any
decision making process. The making of the award is
merely an administrative act of incorporating the terms
of settlement or compromise agreed by parties in the
presence of the Lok Adalat, in the form of an executable
order under the signature and seal of the Lok Adalat.”
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18. Thus, it is clear that the Lok Adalat has no adjudicatory
or judicial functions. In the award, the second respondent endorsed “no
objection” and accepted to issue sale confirmation letter. Accordingly,
the petition filed by the third respondent was recorded and accepted.
The pre-litigation petition filed by the third respondent was awarded
with legal sitting cost of Rs.2,000/- to the Legal Aid, Chengalpattu.
Therefore, the Lok Adalat just recorded the settlement entered between
the second and third respondents and passed the award. Therefore, it can
be very well challenged under Article 226 of the Constitution of India.
19. In the Lok Adalat proceedings, the petitioner was not a
party. Though the suit was decreed, if the debtor failed to pay the
decreetal amount, then the Judgment holder ought to have brought the
property for auction sale. If the decree amount is being released by any
party, then the property cannot be brought for auction. Further, though
the eighth defendant entered into an agreement for sale with the
petitioner herein, subsequently, the ninth defendant agreed to pay the
balance decree amount. It does not mean that the eighth defendant made
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over the agreement in favour of the ninth respondent in respect of the
subject property.
20. Even assuming that the eighth defendant made over the
sale agreement in favour of the ninth defendant, and after settling the
entire decree amount, the ninth defendant did not take any steps to
purchase the subject property either from the Court or from the petitioner
herein and simply lodged the pre-litigation complaint before the Lok
Adalat. On the same day, they produced the settlement agreement and
obtained award for issuance of sale certificate. Therefore, the award
passed by the Lok Adalat itself cannot be sustained and it is non-est in
the eye of law.
21. Admittedly, the subject property was not brought to the
auction sale and as such, the second respondent, being the banker, do not
have any authority to issue sale certificate without bringing the property
for auction sale. Therefore, the sale certificate issued by the second
respondent cannot be sustained and is liable to be set aside. Hence, the
consequential registration of the sale certificate is also set aside.
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22. In view of the above, the Award dated 02.09.2016
passed in LSP No.1604 of 2015 by the Lok Adalat, District Legal
Services Authority, Chengalpattu and the consequential sale certificate
issued by the second respondent in favour of the third respondent dated
09.09.2016 are hereby set aside. However, the third respondent is at
liberty to approach the Execution Court for appropriate relief for
execution of sale deed in his favour.
23. In the result, this Writ Petition stands allowed.
Consequently, connected miscellaneous petitions are closed. There shall
be no order to costs.
18.09.2025
Index : Yes/No
Speaking/Non Speaking order
Neutral Citation : Yes/No
Lpp
To
The Sub Registrar,
Chengalpattu Joint-II,
Kancheepuram High Road,
Natham,
Chengelpattu – 603 001
Kancheepuram District.
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G.K.ILANTHIRAIYAN. J,
Lpp
order in
and
W.M.P.Nos.12286 & 26664 of 2017
18.09.2025
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