Telangana High Court

M/S. Shriram Finance Limited vs The State Of Telangana on 17 June, 2025

        THE HON'BLE SRI JUSTICE K.SARATH

             WRIT PETITION No.3164 of 2025

ORDER:

Heard learned counsel for the petitioner and

learned Assistant Government Pleader for Stamps and

Registration and perused the material on record.

2. The notices sent to the respondent Nos.5 to 9 were

returned with an endorsement 'unclaimed' and the

notice sent to the respondent No.10 was served, but

none appears for the respondent No.10.

3. This writ petition is filed questioning the action of

the respondent No.4 in not registering the sale deed

based on the sale certificate issued by the petitioner

pursuant to the auction conducted under the SARFEASI

Act to the respondent No.9 (successful bidder) pertaining

to the property bearing Shop No.46 in Ground Floor "B"

Block of Laxmi Complex, Erragadda, Hyderabad,

situated near Fateh Nagar Flyover Bridge, Sanath Nagar,

on the pretext of attachment order dated 08.05.2017 in

I.A.No.59 of 2017 in ABR/CF No.262 of 2017 passed by

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the respondent No.3 despite of the notice

dated 06.12.2024 as illegal and arbitrary.

4. Learned counsel for the petitioner submits that the

respondent Nos.5 to 8 have approached the petitioner-

Finance Company for the purpose of finance facility and

obtained mortgage loan of Rs.30,00,000/- on

06.08.2014 and the respondent No.6 has mortgaged the

subject property through registered mortgage deed

bearing No.3033/2014 dated 07.08.2014. He further

submits that in view of default in payment, the

petitioner-Company has initiated proceedings under the

provisions of Section 14 of SARFAESI Act and took over

the possession of the subject property and later the

petitioner has sold the property by way of auction in

accordance with the procedure as contemplated under

the SARFAESI Act. In the auction, the respondent No.9

stood as highest bidder and the petitioner-Company has

issued sale certificate dated 12.09.2024 in his favour

and confirmed the sale after payment of full amount.

After issuance of sale certificate, the petitioner-Company

SK, J W.P.No.3164_2025

and the respondent No.9 took steps for registration of

the sale certificate and approached the respondent No.4,

but the respondent No.4 has refused to receive the said

document on the pretext that the property is under

attachment by virtue of Orders in I.A.No.59 of 2017 in

ABR/CF No.262 of 2017 passed by the respondent No.3-

Deputy Registrar of Chits/Arbitrator, Erragadda,

Hyderabad.

5. Learned counsel for the petitioner further submits

that the action of respondent No.4 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.4 to register the

sale certificate in favour of the respondent No.9.

6. On the other hand, learned Assistant Government

Pleader for Stamps and Registration submits that

though the petitioner herein presented a sale certificate

2018 (5) ALT 279

SK, J W.P.No.3164_2025

dated 12.09.2024 under SARFAESI Act and the same

was accepted by the respondent No.4 for scrutiny,

during the scrutiny of the said document, it is found

that as per the orders dated 08.05.2017 in I.A.No.59 of

2017 in ABR/CF No.262 of 217, the property mentioned

in the sale certificate is under attachment. The subject

property of the writ petition is kept in the prohibited

property list on the basis of Attachment Orders passed

by the Deputy Registrar of Chits/Arbitrator, Erragadda t

Hyderabad (South). 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.

8. After hearing both sides and perusing the material

on record, this Court is of the considered view that there

SK, J W.P.No.3164_2025

is no dispute with regard to the sale certificate issued by

the petitioner-Company to the respondent No.9 for

registration of the subject property as per SARFAESI

Act. The respondent Nos.5 to 8 have mortgaged the

subject property with the petitioner Company. The

petitioner by following the procedure as contemplated

under SARFAESI Act conducted auction for the subject

property and issued sale certificate in favour of

respondent No.9. Now, the respondent No.4 has refused

to register the sale certificate on the ground that there is

attachment Order with respect to the subject property

and until the same was vacated, it cannot be possible to

favour of respondent No.9. The said contention of

respondent No.4 is contrary to the Orders passed by this

Court in City Union Bank Limited Vs Sub Registrar,

Peddapalli and Ors. (supra 1).

9. The relevant portion of the Judgment in City Union

Bank Limited Vs Sub Registrar, Peddapalli and Ors.

(supra 1) is as follows:

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"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

registration of the petitioner-Company in view of the

attachment order.

10. In the instant case also, the petitioner-Company by

following the SARFAESI Act conducted auction for the

SK, J W.P.No.3164_2025

subject property and issued sale certificate in favour of

the respondent No.9. In view of the settled law, the

respondent authorities have no power to refuse the

registration of the sale certificate under SARFAESI Act