Orissa High Court
Kedar Nayak vs The Inspector General Of ... on 24 August, 2022
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) NO.25571 OF 2021
Kedar Nayak .... Petitioner
Mr. Suman Sharma, Advocate
-versus-
The Inspector General of Registration .... Opp. Parties
and others
Mr. A.R. Dash,
Additional Government Advocate
CORAM:
JUSTICE K.R. MOHAPATRA
ORDER
Order No. 24.08.2022
01. 1. This matter is taken up through hybrid mode.
2. At the outset, Mr. Sharma, learned counsel for the
Petitioner prays for impleading the Tahasildar, Digapahandi as
Opposite Party No.5 to the writ petition.
3. Mr. Dash, learned Additional Government Advocate has
no objection to the same.
4. Hence, the oral prayer made by learned counsel for the
Petitioner is allowed. He is permitted to make necessary
correction in Court.
5. The Petitioner in this writ petition prays for a direction to
the Sub-Registrar, Digapahandi-Opposite Party No.5 to calculate
the stamp duty of the properties purchased by him through e-
auction for registration of sale certificates issued under Rule 9(6)
of the Security Interest (Enforcement) Rules, 2002 (for short 'the
Rules') as at Annexure-4 series.
6. Mr. Sharma, learned counsel submits that the Petitioner
purchased the properties in Plot No.1834/3277 to an extent of
Ac.0.050 decimals, Kissam-Gharabari under Khata No.858/129,
Plot No.705/3278 to an extent of Ac.0.050 decimals, Kissam-
// 2 //
Gharabari under Khata No.858/131 and Plot Nos.702, 703 & 704
to the total extent of Ac.0.319 decimals, Kissam-Gharabari under
Khata No.858 situated in mouza Erendra under Sanakhemundi
Tahasil in the district of Ganjam (for short 'the case land')
through e-auction held under Section 14 of the Securitization and
Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 (for short 'SARFAESI Act'). On payment of
entire consideration, sale certificates under Rule 9(6) of the Rules
were issued in his favour (Annexure-4 series). Subsequently, he
approached the Sub-Registrar, Digapahandi for registration of sale
certificates, but the same were not entertained. Hence, this writ
petition has been filed for the aforesaid relief.
7. Mr. Sharma, learned counsel further submits that law has
undergone a change in the meantime. He relied upon the decision
in the case of Indian Overseas Bank -v- RCM Infrastructure
Ltd. and another, reported in 2022 SCC OnLine SC 634, wherein
the Hon'ble Supreme Court at paragraphs-30, 32 and 33 has held
as under:
"30. In the case of B. Arvind Kumar (supra), the
property in question was a suit property and was sold
in a public auction. The sale was confirmed by the
District Judge, Civil and Military Station, Bangalore.
What has been held by this Court is that when a
property is sold by public auction in pursuance of the
order of the court and the bid is accepted and the sale
is confirmed by the court in favour of the purchaser, the
sale becomes absolute and the title vests in the
purchaser. It has been held that a sale certificate is
issued to the purchaser only when the sale becomes
absolute. It was held that when the auction purchaser
derives title on confirmation of sale in his favour and a
sale certificate is issued evidencing such sale and title,
no further deed of transfer from the court is
contemplated or required. Additionally, in the said
// 3 //
case, the Court found that the sale certificate itself was
registered.
31. xxx xxx xxx
32. It is further to be noted that the present case arises
out of a statutory sale. The sale would be governed by
Rules 8 and 9 of the said Rules. The sale would be
complete only when the auction purchaser makes the
entire payment and the authorised officer, exercising
the power of sale, shall issue a certificate of sale of the
property in favour of the purchaser in the Form given
in Appendix V to the said Rules.
33. In the case of Shakeena v. Bank of India10, which
was a case arising out of SARFAESI Act, this Court has
held that the sale certificate issued in favour of the
respondent No. 3 did not require registration and that
the sale process was complete on issuance of the sale
certificate. The same has been followed by this Court in
the case of S. Karthik (supra)."
He also relied upon the decision in the case of Shakeena
and another -v- Bank of India and others, reported in 2019
STPL 9872 SC, wherein the Hon'ble Supreme Court relying upon
the decision in Indian Overseas Bank (supra) amongst other has
framed the following question for consideration.
"16. Reverting to the impugned judgment of the
Division Bench of High Court, it essentially
considered three points as noted in paragraph 8 of
the impugned judgment. The same reads thus:
(i) Whether the sale of the secured asset in public
auction as per section 13(4) of SARFAESI Act,
which ended in issuance of a sale certificate as
per rule 9(7) of the Security Interest
(Enforcement) Rules, 2003 (in short "the rules")
is a complete and absolute sale for the purpose of
SARFAESI Act or whether the sale would become
final only on the registration of the sale
certificate?
xxx xxx xxx
And in reply, the Hon'ble Supreme Court relying upon the
decision in B. Arvind Kumar -v- Govt. of India and others,
// 4 //
reported in (2007) 5 SCC 745 and applying the principle set out
therein, concluded that registration of sale certificate was not
essential holding as under:
"10.17 The ratio laid down by the Division Bench of
this court in Arumugham, S. v. C.K. Venugopal
Chetty and the Supreme Court in B. Arvind
Kumar v. Government of India, referred supra,
squarely applies to the case on hand and we,
therefore, have no incertitude to hold that the sale
which took place on 19.12.2005 has become final
when it is confirmed in favour of the auction
purchaser and the auction purchaser is vested with
rights in relation to the property purchased in
auction on issuance of the sale certificate and he has
become the absolute owner of the property. Further,
as held by the Division bench of this court
in Arumugham, S. v. C.K. Venugopal Chetty and the
Supreme Court in B. Arvind Kumar v. Government of
India, referred supra, the sale certificate issued in
favour of the appellant does not require any
registration in view of section 17(2)(xii) of the
Registration Act as the same has been granted
pursuant to the sale held in public auction by the
authorized officer under SARFAESI Act.
10.18 The finding of the learned Single Judge that
the sale is not complete without registration of sale
certificate, therefore, is not sustainable in law and the
same is liable to be set aside.
10.19 If the argument of the borrowers that even
after the issuance of the sale certificate, prior to
registration, they are entitled to redeem the property
is accepted, it would make the provisions of the
SARFAESI Act redundant and the very object of the
SARFAESI Act enabling the Banks and financial
Institutions to realize long term assets, manage
problems of liquidity, asset liability mismatch and to
improve recovery of debts by exercising powers to
take possession of securities, sell them and thereby
reduce non performing assets by adopting measures
for recovery and reconstruction would fail and would
open a pandora's box for the litigations upsetting the
sale confirmed in favour of the bonafide auction
purchasers, who invested huge money.
// 5 //
10.20 In view of our finding on this point, we hold
that the sale of the secured asset in public auction as
per section 13(4) of SARFAESI Act, which ended in
issuance of a sale certificate as per rule 9(7) of the
Rules is a complete and absolute sale for the purpose
of SARFAESI Act and same need not be registered
under the provisions of the Registration Act."
8. In view of the aforesaid developments, Mr. Sharma,
learned counsel for the Petitioner submits that since registration of
sale certificates are not required under law, interest of justice will
be best served, if the Petitioner approaches the Tahasildar,
Digapahandi to mutate the lands in his name on the basis of the
sale certificates under Annexure-4 series.
9. Mr. Dash, learned Additional Government Advocate
submits that the same would be the appropriate procedure to get
the lands recorded in the name of the Petitioner, if there is no legal
impediment.
10. Taking into consideration the submissions made by learned
counsel for the parties, this Court without expressing any opinion
on the merits of the case of the Petitioner disposes of this writ
petition with a direction that in the event the Petitioner files
mutation applications in respect of the aforesaid properties in
proper format enclosing the sale certificates issued under
Annexure-4 series, the Tahasildar, Digapahandi-Opposite Party
No.5 shall do well to consider the same in accordance with law
keeping in mind the case laws referred to above and pass a
reasoned order, giving opportunity of hearing to the parties
concerned.
Urgent certified copy of this order be granted on proper
application.
(K.R. Mohapatra)
bks Judge
