The rights of secured creditors under the SARFAESI Act take precedence over statutory dues, and the Sub-Registrar cannot refuse registration of documents without valid legal grounds as specified in the Registration Act.

ORDER

M. Nagaprasanna, J.

The petitioner is before this Court seeking a direction by issuance of a writ in the nature of mandamus directing the 2nd respondent/Sub-Registrar to register the sale certificate dated 30th September, 2022 issued by the 3rd respondent in favour of the petitioner.

2. Heard Sri S. Swaroop, learned counsel appearing for the petitioner, Smt. Navya Shekhar, learned Additional Government Advocate appearing for respondents 1 and 2 and Sri Vignesh Shetty, learned counsel for respondent No.3.

3. The facts adumbrated are as follows:-

One Sri Thimme Gowda, Sri T. Raghavendra Gowda and Sri T. Prasanna Raghavendra Gowda were the absolute owners of the property bearing No.19, situated at 11th Cross, Wilson Garden, Hombegowdanagara, Bengaluru measuring 6000 sq.ft. The aforesaid owners of the property had mortgaged the subject property and availed a loan from Canara Bank, the 3rd respondent. The loan gets into default, the default gets into initiation of proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('hereinafter referred to as 'the SARFAESI Act' for short) to recover the amount. Sale of the property was conducted on 19-03-2022. The petitioner participates in the auction, emerges as the successful bidder and pays the entire consideration as necessary in law. After receipt of the entire consideration, the Bank issues a sale certificate in favour of the petitioner on 30-09-2022. It is an admitted fact that as on today, the borrowers/owners of the property have not challenged the sale or initiated any proceedings against the sale of the property, as the challenge is not pending before any judicial or quasi judicial fora.

4. The petitioner desirous of getting the sale certificate registered approaches the jurisdictional Sub-Registrar i.e., the Sub Registrar of JP Nagar/2nd respondent. The petitioner pays entire stamp duty as necessary under the Stamp Act and all other necessary fee through challan and sits with the Sub-Registrar to get the sale certificate registered. No written endorsement is issued, but the averment in the petition is, that certain claims of the Income Tax Department are pending against the borrowers of the property and, therefore, the sale certificate cannot be registered. The petitioner comes back and communicates a letter to clarify the queries for getting the sale certificate registered. No response comes about. The petitioner then communicates to the Bank, the Bank also communicates the Sub-Registrar to register the sale certificate. No response comes about. A representation comes to be submitted to the Sub-Registrar by the petitioner on 12-02-2024. Finding no response, the petitioner is knocking at the doors of this Court in the subject petition.

5. The learned counsel for the petitioner would vehemently contend that a proceeding under the SARFAESI Act has precedence over any other law. The right of the secured creditor overrides every right of the borrower over the property. The Sub-Registrar had no jurisdiction to deny registration of document after compliance with every necessary nuances of registration. Citing an unjustifiable reason as dues of the Income Tax Department by the borrowers can never be a ground to deny registration is his emphatic submission.

6. The learned Additional Government Advocate, on instructions, would submit that her submissions be treated as her objections to the main petition and contends that the Sub-Registrar is not in a position to register the sale certificate as the Income Tax dues of the borrowers of the property are still pending. It is her submission that they are statutory dues and unless the statutory dues are cleared by the borrowers, the property would not become free from encumbrance and if the property would not become free from encumbrance, the Sub-Registrar would not register the document.

7. The learned counsel appearing for the 3rd respondent/ Canara Bank supports the case of the