Orissa High Court
Adarsh Agarwal vs State Of Odisha And Others on 7 November, 2023
Signature Not Verified
Digitally Signed
Signed by: SASANKA SEKHAR SATAPATHY
Reason: Authentication
Location: HIGH COURT OF ORISSA CUTTACK
Date: 09-Nov-2023 16:15:45
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No. 30194 of 2023
Adarsh Agarwal .... Petitioner
Mr. Tuna Sahu, Advocate
-versus-
State of Odisha and others .... Opp. Parties
Mr. Swayambhu Mishra,
Additional Standing Counsel
(For Opposite Party Nos.1 to 4 & 6)
CORAM:
JUSTICE K.R. MOHAPATRA
ORDER
Order No. 07.11.2023
2. 1. This matter is taken up through Hybrid mode.
2. Petitioner in this writ petition prays for a direction to
Sub-Registrar, Patnagarh-Opposite Party No.4 to register the
sale certificate issued in favour of the Petitioner under
Annexure-1.
3. It is submitted by Mr. Sahu, learned counsel that the
Petitioner is the auction purchaser of the property in question,
which was put to sale by the State Bank of India, Stressed Asset
Recovery Branch (SARB), Sambalpur-Opposite Party No.5.
The auction was held as per the provisions of the SARFAESI
Act, 2002 and sale certificate has been issued in favour of the
Petitioner under Annexure-1. After receiving the sale certificate,
the Petitioner presented it before the Sub-Registrar, Patnagarh-
Opposite Party No.4 for registration. But the Sub-Registrar did
not accept the same. Hence, this writ petition has been filed.
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Digitally Signed
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Signed by: SASANKA SEKHAR SATAPATHY
Reason: Authentication
Location: HIGH COURT OF ORISSA CUTTACK
Date: 09-Nov-2023 16:15:45
4. Mr. Mishra, learned ASC submits that the matter is no
more res integra that a sale certificate issued under the
provisions of the SARFAESI Act does not require any
registration under the Registration Act, 1908. Hence, the Sub-
Registrar has committed no error in not accepting the sale
certificate for its registration.
5. Mr. Sahu, learned counsel for the Petitioner placed
reliance on the case of Indian Overseas Bank Vs. RCM
Infrastructure Ltd. and another, reported in 2022 SCC OnLine
SC 634, wherein it is 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
case, the Court found that the sale certificate itself was
registered.
31. xx xx xx
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 and Another v. Bank of
India and Others10, which was a case arising out
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Signed by: SASANKA SEKHAR SATAPATHY
Reason: Authentication
Location: HIGH COURT OF ORISSA CUTTACK
Date: 09-Nov-2023 16:15:45
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 placed reliance upon the case of Shakeena and another
Vs. 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 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?
xx xx xx"
While answering the aforesaid question, the Hon'ble Supreme
Court relying upon the case law in the case of B. Arvind Kumar
Vs. Govt. of India and others, reported in (2007) 5 SCC 745,
held as under:-
"10.17 The ratio laid down by the Division Bench
of this court in Arumugham, S. & 2 others v.
C.K.Venugopal Chetty & 5 others and the Supreme
Court in B. Arvind Kumar vs. Government of India and
others, 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
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Signed by: SASANKA SEKHAR SATAPATHY
Reason: Authentication
Location: HIGH COURT OF ORISSA CUTTACK
Date: 09-Nov-2023 16:15:45
rights in relation to the property purchased in auction on
issuance of the sale certificate and he has 1 (2007) 5
SCC 745 become the absolute owner of the property.
Further, as held by the Division bench of this court in
Arumugham, S. & 2 others v. C.K. Venugopal Chetty & 5
others and the Supreme Court in B. Arvind Kumar Vs.
Government of India and others, 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.
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."
6. Mr. Mishra, learned ASC does not dispute the aforesaid
position of law.
7. In view of the above, there can be no iota of doubt that
once the sale certificate pursuant to an auction held under the
provisions of SARFAESI Act is issued, execution and
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Signed by: SASANKA SEKHAR SATAPATHY
Reason: Authentication
Location: HIGH COURT OF ORISSA CUTTACK
Date: 09-Nov-2023 16:15:45
registration of sale deed in respect of the said property is not
required.
8. Accordingly, the Petitioner, if so advised, may file an
application to mutate the land purchased by him in proper
format enclosing the sale certificate issued under Annexure-1
before the concerned Tahasildar and in that event the same shall
be considered in accordance with law. The Petitioner may also
file an application to make entry of the sale certificate in Book
No.1 before the Sub-Registrar, Patnagarh and in that event, the
Sub-Registrar-Opposite party No.4 shall do well to examine the
matter and enter the same in Book No.1, if there is no legal
impediment.
9. With the aforesaid observation, the writ petition is
disposed of.
10. As requested, a copy of this order shall be made over to
Mr. Mishra, learned ASC for communication and compliance.
Issue urgent certified copy of the order on proper
application.
(K.R. Mohapatra)
Judge
s.s.satapathy
