Telangana High Court

Union Bank Of India vs State Of Telangana, on 9 September, 2025

       THE HON'BLE SRI JUSTICE K.SARATH

            WRIT PETITION No.14893 of 2025

ORDER:

Heard Sri Hemanth Kumar Vemuri, learned

counsel for the petitioner, Smt S. Sravanthi, learned

Assistant Government Pleader for Stamps and

Registration and Sri P. Durga Prasad, learned Standing

Counsel for the respondent No.4 and perused the

material on record.

2. The petitioner filed proof of service of notice on the

respondent Nos.5 to 8, which was published in daily

newspaper "Eenadu" on 21.08.2025 in Greater

Hyderabad Edition which was circulated in Medchal-

Malkajgiri and Ranga Reddy Districts. In spite of the

same, none appears for the respondent Nos.5 to 8.

3. This writ petition is filed seeking to direct the

respondent No.2 to remove the subject property from the

list of prohibited properties and to register the Sale

Certificate to be issued by the petitioner Bank in favour

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of the Auction Purchaser under Rule 9(6) of the Security

Interest (Enforcement) Rules, 2002.

4. Learned counsel for the petitioner submits that the

respondent No.5 has approached the petitioner-Bank for

the purpose of credit facility in the year, 2018 and

obtained loan of Rs.60,00,000/-, which was enhanced to

Rs.69,00,000/- on 27.05.2020, by mortgaging the

residential building bearing H.No.1-10-28/199/22/8

and 9 in Plot No.8 and 9 admeasuring 400 sq. yards

situated at Subhodaya Colony, GHMC, Kapra Circle,

ECIL, Medchal-Malkajgiri District and deposited the

original title deeds and the same was recorded vide

Reg.MODT No.4329 of 2018 in the books of the Sub-

Registrar Office, Kapra. He further submits that in view

of default in payment, the petitioner-Bank has initiated

proceedings under the provisions of Section 14 of

SARFAESI Act and issued sale notice dated 04.04.2025

under Rule 9(1) of Security Interest (Enforcement) Rules,

2002 and later the petitioner-Bank sold the property by

way of auction in accordance with the procedure as

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contemplated under the SARFAESI Act. In the auction,

M/s. E. Medimart rep. by its sole proprietor G. Chinna

Obula Reddy was declared as highest bidder for the bid

amount of Rs.1,28,27,000/- and after payment of 25%

of the bid amount, the petitioner-Bank has confirmed

the sale auction in favour of the Auction Purchaser.

Thereafter, the petitioner-Bank came to know that the

subject property is in the list of prohibited properties as

per the attachment order passed by the respondent

No.3-Chit Arbitrator-cum-Deputy Registrar of Chits in

I.A.No.233 of 2020 in ARB.CF.No.323 of 2020 dated

30.12.2020. The respondent No.2-Sub-Registrar despite

receipt of the representation of the petitioner-Bank on

26.04.2025 refused to remove the subject property from

the list of prohibited properties.

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

2018 (5) ALT 279

SK, J

the same was 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 to be issued by the petitioner Bank in

favour of the Auction Purchaser.

6. On the other hand, learned Assistant Government

Pleader for Stamps and Registration submits that

though the petitioner made a representation

dated 26.04.2025, during the scrutiny, it is found that

as per the order dated 30.12.2020 in I.A.No.233 of 2020

in ARB.CF.No.323 of 2020, the subject property is under

attachment and kept in the prohibited property list on

the basis of Attachment Orders passed by the

respondent No.3. The sale certificate to be 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 is under SARFAESI Act, it cannot be

registered as the property involved in the sale certificate

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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

is no dispute with regard to the auction conducted by

the petitioner-Bank as per SARFAESI Act. The

respondent No.5 has mortgaged the subject property

with the petitioner-Bank. The petitioner by following the

procedure as contemplated under SARFAESI Act

conducted auction for the subject property and sale

certificate has to be issued in favour of the Auction

Purchaser. Now, the respondent No.2 has refused to

remove the subject property from the prohibited list on

the ground that there is attachment Order with respect

to the subject property and until the same is vacated, it

cannot be possible to register the sale certificate to be

issued in favour of Auction Purchaser. The said

contention of the respondent No.2 is contrary to the

Orders passed by this Court in City Union Bank

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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:

"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."

SK, J

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 sale certificate in view of the

attachment order.

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

following the procedure under SARFAESI Act conducted

auction for the subject property and sale certificate has

to be issued in favour of the Auction Purchaser. In view

of the settled law, the respondent authorities have no

power to refuse the registration of the sale certificate