Telangana High Court
Union Bank Of India Erstwhile ... vs The Commissioner And Inspector ... on 17 March, 2022
Bench: Ujjal Bhuyan, A.Venkateshwara Reddy
THE HONOURABLE SRI JUSTICE UJJAL BHUYAN
AND
THE HONOURABLE SRI JUSTICE A. VENKATESHWARA REDDY
Writ Petition No.21290 of 2021
ORDER: (Per Hon'ble Sri Justice Ujjal Bhuyan)
Heard Ms. V. Dyumani, learned counsel for the
petitioner. None has appeared for the respondents.
2. Union Bank of India (erstwhile Andhra Bank) is
before us in this writ proceeding as the petitioner.
3. Prayer made in this writ petition is for a direction
to respondent No.3 to remove the schedule property
from the prohibited property list and, thereafter, to
register the sale certificate issued by the petitioner in
favour of the auction purchaser under the
Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002 (for
short 'the SARFAESI Act').
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4. Briefly stated, respondent No.4 has availed
financial assistance from the petitioner. As security,
the residential building bearing H.No.1-3-82/4,
admeasuring 272.30 Square Yard or 227.7 Square
Meter, with constructed area of 953.80 Sq.ft., situated
at Rajendra Nagar, Mahabubnagar, Mahabubnagar
District and open land admeasuring Acs.3.30 gts in
Survey No.129/A and 130, situated at Appampally
village, Marikal Sivar, Dhanwada Mandal,
Mahabubnagar District, was mortgaged to the
petitioner-Bank.
5. Respondent No.4 defaulted in payment of dues
for which its loan account was classified as 'Non-
Performing Asset' (NPA) on 28.02.2019.
6. Petitioner thereafter invoked provisions of the
SARFAESI Act. Ultimately, sale notice was issued on
26.10.2020 following which the aforesaid schedule
property was auction-sold on 18.11.2020. In the
auction, Mr.P.Srinivasulu, was the highest bidder at
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his bid amount of Rs.1,11,75,000.00. He was declared
as the successful bidder whereafter he paid the entire
sale consideration. Sale in favour of Mr.P.Srinivasulu
was confirmed.
7. Auction purchaser has visited the office of
respondent No.3 for payment of stamp duty and
registration fee on the sale certificate to be issued by
the petitioner in respect of the schedule property sold
to the auction purchaser. However, respondent No.3
informed that the schedule property is included in the
prohibitory property list. According to respondent
No.3, respondent No.5 had instituted civil suit being
O.S.No.51 of 2020 before the Principal Junior Civil
Judge, Mahabubnagar. In the said Civil Suit, he filed
interlocutory application being I.A.No.70 of 2020 in
which the Trial Court passed order on 19.02.2020
directing respondent No.4 and others not to alienate
the schedule property, pending disposal of the suit. It
is stated that respondent No.5 is none other than the
son of respondent No.4.
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8. Be that as it may, according to the petitioner, the
schedule property was mortgaged by respondent No.4
in favour of the petitioner on 13.05.2014 whereas the
order of the Civil Court not to alienate the said
property is dated 19.02.2020, much later after the date
of mortgage.
9. It is with the above grievance that present writ
petition has been filed seeking the relief as indicated
above.
10. Respondents have not filed any counter-affidavit.
11. Learned counsel for the petitioner submits that
the issue raised in the present writ petition is no more
res integra.
12. A coordinate Bench of this Court in Writ Petition
No.24936 of 2019, decided on 27.01.2021, has held as
follows :
"The Sub-Registrar is refusing to remove the
schedule property from prohibited property list on the
ground that an order of attachment was passed by
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respondent No.4 Deputy Registrar of Chits. But the order
of attachment is obviously subsequent in point of time to
the mortgage made in between the petitioner and
respondent No.6. Therefore, the claim of the respondent
No.5 cannot take precedence over the mortgage in favour
of the Bank.
The only thing that the respondent No.5 can seek
the payment of any surplus, after adjustment of all the dues
by the Bank.
Therefore, the Writ Petition is disposed of directing
the Sub-Registrar to remove the schedule property from
the prohibited property list and register the sale
certificate, whenever presented by the petitioner, in
accordance with law. However, if after adjustment of the
entire loan amount, any surplus money remains out of the
auction sale proceeds, the Bank shall not pay it to the
respondent No.6 borrower but it shall pay to the
respondent No.5, after notice to the respondent No.6."
13. At this stage, we may mention that another
coordinate Bench of this Court in City Union Bank
Ltd. Vs. Sub-Registar, Peddapalli1 had taken an
identical view. Paragraph No.13 of the said judgment
reads as under :
2018 (6) A.L.D. 16
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"13. The preponderance of judicial opinion leads
to the irresistible conclusion that the sale of the mortgaged
property in favour of the auction purchaser and the sale
certificate under the SARFAESI Act in such circumstances
is free of all encumbrances. The attachments effected
subsequent to the mortgage created in favour of the bank
do not affect the rights of the secured creditor over the
subject property. Such attachments have no impact on the
sale conducted under the Act and the same ceases to have
any effect or fall to the ground the moment the same is
confirmed in favour of the secured creditor Bank and
auction purchaser. Otherwise, those attachments would
remain as a permanent taboo prejudicially affecting the
marketability and title to the property even though they
ceased to have any legal efficacy and thereby it becomes
necessary to register the sale certificate. Taking into
account all these aspects and reckoning the law in the
subject as discussed above, this Court has no hesitation to
hold that the secured creditor is entitled to succeed in these
writ petitions. The writ petitions are accordingly allowed
directing the first respondent in both the writ petitions to
register the sale certificates in accordance with the
Registration Act. Miscellaneous Petitions pending if any
shall stand closed. No order as to costs."
14. Following the above decisions and on due
consideration, we direct respondent Nos.2 and 3 to
register the sale certificate issued by the petitioner in
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favour of the auction purchaser in respect of the
schedule property as mentioned above. The same
shall be carried out within a period of six (6) weeks
from the date of receipt of a copy of this order.
15. This disposes of the writ petition. No order as to
costs.
16. As a sequel, miscellaneous applications pending
if any in this Writ Petition, shall stand closed.
____________________
UJJAL BHUYAN, J
__________________________________
A. VENKATESHWARA REDDY, J
Date : 17.03.2022
Ndr
