Telangana High Court

M/S. Icici Bank Limited vs The State Of Telangana on 8 April, 2025

            THE HON'BLE SRI JUSTICE K.SARATH

              WRIT PETITION No.5353 of 2023

ORDER:

Heard learned counsel for the petitioner and

learned Assistant Government Pleader for Stamps and

Registration and learned counsel for the respondent

No.8 and perused the material on record.

2. Learned counsel for the petitioner submits

that the petitioner challenging the action of the

respondent No.2 in not registering the sale certificate

dated 14.12.2022 issued by the petitioner-bank under

the provisions of Securitization and Reconstruction of

Financial Assets and Enforcement of Security Interest

Act, 2002 (for brevity, 'SARFAESI Act') basing on the

pretext of the Warrant of Attachment Orders dated

20.10.2021 passed by the Principal Senior Civil Judge,

Mancherial, in I.A.No.150 of 2021 in O.S.No.19 of 2021

and another Notice-cum-Conditional Attachment Order

dated 04.08.2022 passed by the Chit Arbitrator/Deputy

Registrar of Karimnagar in I.A.No.8 of 2022 in

SK, J W.P.No.5353_2023

Arb.No.100 of 2022, which is illegal and arbitrary and

contrary to the SARFAESI Act.

3. Learned counsel for the petitioner further

submits that the respondent No.4 approached the

petitioner-bank for the purpose of finance facility in the

form of overdraft facility for his business and made an

application. Subsequently, the petitioner-bank

sanctioned a total amount of Rs.4,80,00,000/- (Rupees

Four Crore Eighty Lakhs Only) to the respondent No.4

and the same was sanctioned after depositing title deeds

dated 14.08.2014 in respect of his personal property,

which is in relation to residential open place

admeasuring 438.75 Sq.Yards or 366.83 Sq.Meters in

H.No.12-5/1, 12-5/10, 12-5/11 in Sy.No.256 situated at

Mancherial Town & Mandal, as security for repayment of

loan and the same is covered by registered sale deed

No.4381/2001 dated 23.11.2001. It is submitted that

respondent Nos.6 and 7 stood as guarantors and have

signed the loan documents including the deed for

deposit of title deeds.

SK, J W.P.No.5353_2023

4. Learned counsel for the petitioner further

submits that in view of default in payment, the

petitioner-bank initiated proceedings under provisions of

Section 14 of SARFAESI Act and took over the

possession of the property on 03.03.2022 and later the

petitioner-bank sold the property by way of auction in

accordance with the procedure contemplated under the

SARFAESI Act. In the auction, the respondent No.8

stood as highest bidder and the petitioner-bank issued

sale certificate on 14.12.2022 in his favour and

confirmed the sale after payment of full amount. After

issuance of sale certificate, the petitioner-bank and the

respondent No.8 took steps for registration of the sale

certificate and approached the respondent No.2 and the

respondent No.2 refused to receive the said document on

the pretext that the property is under attachment by

virtue of Orders in I.A.No.150 of 2021 in O.S.No.19 of

2021 dated 29.10.2021 passed by Principal Senior Civil

Judge, Mancherial and Notice-cum-Conditional

Attachment Order dated 04.08.2022 passed by the Chit

SK, J W.P.No.5353_2023

Arbitrator/Deputy Registrar of Karimnagar in I.A.No.8 of

2022 in Arb.No.100 of 2022.

5. Learned counsel for the petitioner further

submits that the action of respondent No.2 is contrary to

the Orders passed by this Court in City Union Bank

Limited Vs Sub Registrar, Peddapalli and Ors.,1 and

the same is followed by another Division Bench of this

Court in W.P.No.38125 of 2018 dated 14.10.2019 and

requested to direct the respondent No.2 to register the

sale certificate in favour of the respondent No.8.

6. On the other hand, learned Assistant

Government Pleader for Stamps and Registration, basing

on the counter filed by respondent No.2, submits that

though the petitioner herein presented a sale certificate

dated 14.12.2022 under SARFAESI Act and the same

was accepted by the then Sub-Registrar, SRO,

Mancherial for scrutiny, during the scrutiny of the said

document, it is found that the property mentioned in the

sale certificate was already kept in Prohibited Property

2018 (5) ALT 279

SK, J W.P.No.5353_2023

List of the Commissioner and Inspector General of

Registration and Stamps Website. The subject property

of the writ petition is kept in the prohibited property list

on the basis of Warrant Attachment Orders before the

Judgment on proof of failure to furnish security for

fulfillment of decree passed by the Court of the Principal

Senior Civil Judge at Mancherial vide Order dated

29.10.2021 in I.A.No.150 of 2021 in O.S.No.19 of 2021

and another Attachment Order passed by the Chit

Arbitrator/Deputy Registrar of Chits, Karimnagar vide

Order dated 04.08.2022 in I.A.No.8 of 2022 in

Arb.No.100 of 2022. The sale certificate presented by the

petitioner cannot be registered until and unless the

Attachment Orders are set aside.

7. Learned Assistant Government Pleader for

Stamps and Registration further submits that though

the sale certificate was issued under SARFAESI Act, it

cannot be registered, as the property involved in the sale

certificate is already in prohibited list on the website of

the IGRS and requested to dismiss the writ petition.

SK, J W.P.No.5353_2023

8. After hearing both sides and perusing the

material on record, this Court is of the considered view

that there is no dispute with regard to the sale certificate

issued by the petitioner-bank to the respondent No.8 for

the registration of the suit schedule property as per

SARFAESI Act. The respondent No.4 is the borrower

and the respondent Nos.5 and 6 are the guarantors of

the loan taken by respondent No.4. The petitioner by

following the procedure contemplated under SARFAESI

Act conducted auction for the suit schedule property

and issued sale certificate in favour of respondent No.8.

Now, the respondent no.2 refused to register the sale

certificate on the ground that there are two attachment

Orders on the suit schedule property and until the same

were vacated, it cannot be possible to register the sale

certificate dated 14.12.2022 issued in favour of

respondent No.8. The said contention of respondent

No.2 is contrary to the Orders passed by this Court in

City Union Bank Limited Vs Sub Registrar,

Peddapalli and Ors. (supra 1).

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9. The relevant portion of the Judgment in City

Union Bank Limited Vs Sub Registrar, Peddapalli

and Ors. (supra 1) is as follows:

"8. It is needless to observe that the civil Court has no jurisdiction to deal with subject matters pertaining to the SARFAESI Act. In the present scenario, the secured creditor was not a party to the civil suits before the Courts below and thus the orders of attachment before judgment are not binding on the secured creditor/Bank. More so, the cause of action before the Courts below is not within the ambit of SARFAESI Act.

10. Upon fair reading of S.O. 219 in the light of Section 64 of CPC, this Court is of the view that it only pertains to a civil dispute between the private parties and it does not include an institutional sale under a statute. Though Section 64 comes into play only after the alienation of the property under attachment amongst the private persons, the said legal position does not create an embargo upon the Registrar to proceed with the registration of sale certificates under the SARFAESI Act as the bank is not a party to the suit and the sale is not being effected by a party to the attachment order.

12. In similar circumstances, the Kerala High Court in The South Indian Bank Ltd. v. The Sub Registrar (3) WP (C) No. 3875 of 2017 dated 24.11.2016, considered the question whether a sale certificate is liable to be registered or not in view of the order of attachment before judgment passed by the civil Court and held that the secured creditor is entitled to proceed with the registration and the Registration Authority cannot stall the process of registration under the garb of an order of attachment passed by the civil Court."

The above said finding of the Division Bench of this

Court would squarely apply to the instant case and the

Registration Authority cannot stall the process of

SK, J W.P.No.5353_2023

registration of the petitioner-bank in view of the

attachment orders.

10. In the instant case also, the petitioner-bank

by following the SARFAESI Act conducted auction for

the suit schedule property and issued sale certificate in

favour of the respondent No.8. In view of the settled law,

the respondent authorities have no power to refuse the

registration of the sale certificate under SARFAESI Act