Union Bank of India Vs Sub Registrar (Kerala High Court)
The Kerala High Court considered a writ petition filed by Union Bank of India seeking directions to the Sub Registrar to remove an attachment over a property covered by a sale certificate issued under the SARFAESI Act, register the sale certificate on payment of requisite stamp duty, and direct the revenue authorities to effect mutation of the property in the purchaser’s name.
The Bank stated that borrowers had jointly availed a housing loan of ₹7,00,000 by creating an equitable mortgage over the property on 01.12.2015. Upon default in repayment, the Bank initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, sold the mortgaged property, and issued a sale certificate dated 11.08.2023 in favour of the auction purchaser.
When the sale certificate was presented for registration, the Sub Registrar found an attachment entered in the encumbrance certificate pursuant to an order of the Family Court dated 06.04.2018. The Bank contended that since the equitable mortgage had been created before the attachment, the subsequent attachment had no effect on the Bank’s rights and should be removed from the encumbrance register.
The Court noted that the equitable mortgage was created on 01.12.2015, whereas the Family Court attachment was effected on 06.04.2018. The Bank relied on the decisions in Madhan S. v. Sub Registrar, Kollam and Others, Secretary, Keechery Service Co-operative Bank Ltd. v. Sajitha Nizar alias Sajitha P.M. and others, and Ali Asharaf M.M. and Another v. Sub Registrar, Thrissur. The Court also referred to Phoenic ARC Pvt. Ltd. v. Sub Registrar, Feroke, which considered Section 89(5) of the Registration Act, 1908.
