IMPORTANT POINT
The SARFAESI Act's provisions override civil court injunctions, allowing secured creditors to enforce their rights despite conflicting orders.

ORDER :

(Per Sri Justice Ravi Cheemalapati)

Action of the Registering Authorities in refusing to remove the subject properties from prohibited property list and not registering sale certificates issued by the petitioner Bank in favour of auction purchasers under Securitisation And Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Hereinafter, referred to as ‘SARFAESI Act’) and Rules framed thereunder, is questioned in this Writ Petition being illegal, arbitrary and violative of the provisions of SARFAESI Act

2. The case of the petitioner Bank, in brief, is that respondent no.6, availed credit facilities from erstwhile Andhra Bank and offered the subject properties i.e. items 1 to 3 as security for due discharge of the credit facilities availed or may be availed from time to time and by depositing original title deeds and by execution of Memorandum of Deposit of Title deeds initially on 07.11.2008, 30.01.2010 and 30.01.2010 in respect of item nos.1 to 3 respectively created equitable mortgage over the said properties, which was extended from time to time by execution of Memoranda on 10.12.2013, 20.10.2017 and Registered Memorandum of Deposit of title deed on 18.04.2019 and consequent to amalgamation of Andhra Bank with the petitioner bank with effect from 01.04.2020, the petitioner bank became the lender entitled to recover the debts due to the erstwhile Andhra Bank and enforce securities. It is its further case that as respondent no.6 committed default in repayment of the credit facilities availed by him, his account was classified as Non Performing Asset (NPA) and demand notice dated 30.07.2021 was issued followed by Possession notice dated 29.03.2022 and E-auction notice dated 19.06.2023 fixing the date of auction as 13.07.2023 and item nos. 1 and 3 of the subject property were sold in the said E-auction and when the bank authorities and the successful bidders visited the Registering Authorities to ascertain the stamp duty and registration fee payable on the certificate of sale, they were informed by respondent nos. 4 & 5-concerned sub Registrars, that in view of the restraint orders passed by civil Courts at Guntur, they cannot register sale certificates in relation to the subject property. It is its further case that it is learnt that respondent nos.7 to 9 filed O.S.No.860 of 2023 & O.S.No.1661 of 2022 on the file of II Additional Junior Civil Judge, Guntur and O.S.No.225 of 2022 on the file of Principal Senior Civil Judge, Guntur respectively against respondent no.6 for specific performance of agreements of sale dated 01.04.2014, 02.07.2012 and 02.06.2012 in respect of item nos.1 to 3 of the subject property respectively and obtained interim orders of injunction on 7.7.2023, 20.01.2023 and 30.01.2023 respectively and those suits filed by respondent nos.8 & 9 were decreed exparte. It is the further case of the petitioner that injunction orders were passed against respondent no.6 but not against the Bank and the factum that the suits were decreed exparte shows the collusiveness between parties to the suits making it clear that the agreements were introduced to defraud and defeat the rights of the Bank. It is the further case of the petitioner that the Bank being the secured creditor and the original title deeds were deposited with the bank from 07.11.2008 evidenced by execution of memorandum of deposit of title deeds, the bank is entitled to sell the properties under Section 26(E) of SARFAESI Act and the orders passed by Courts will always be subject to mortgage/charge already created over the property and therefore, the action of the Registering Authorities in not removing the subject property from prohibited list and in not registering the sale certificates is illegal.

3. The respondent nos.4 & 5- Sub Registrars, filed separate counters contending that in view of the orders passed by Civil Courts, the subject property was entered into prohibited list of CCA and the registering authority has no