A mortgagee bank's sale certificate cannot be denied registration due to prior attachment orders, as secured creditors' rights under the SARFAESI Act prevail over tax attachment claims.

Order :

(SURAJ GOVINDARAJ, J.)

1. The Petitioner is before this Court seeking for the following reliefs:

a. The Respondent-1 State Bank of Patiala, and its official to facilitate registration of Sale Certificate in favour of the Petitioner and for that purpose to do all such acts, so that sale certificate issued by it gets registered.

b. The Respondent No.2 Bank and the Respondent No.3 may be directed to raise the attachment order which has been passed in respect of the property purchased by the petitioner-1 viz, property bearing Municipal Corporation No.97, (PID No.38-12-97) situated at 2^nd main road, Coconut Garden, BBMP Ward No.38, Nagarbhavi, Bangalore, measuring East to West 55 feet and North to South 75 feet on Eastern side and 69 feet on Western side comprising an area of 3960 square feet;

c. The Respondent-2 Bank and the Respondent-3 may be directed that amount lying with the Respondent-1 bank may be attached by them to recover their dues and for recovering their dues they cannot attach the property which has been sold in public auction to the Petitioner herein, by the respondent-1 Bank.

d. To quash the attachment orders passed by the Respondent-2 and the respondent-3 in respect of property purchased by the petitioner-1, viz., property bearing Municipal Corporation No. 97, (PID No.38-12-97) situated at 2^nd Main Road, Coconut Garden, BBMP Ward No.38, Nagarbhavi, Bangalore.

e. To direct the Respondent No.1 State Bank of Patiala to convey good title to the Petitioner free from all encumbrances, as stated in the Rule 9 and Sale Certificate.

f. And prays for such other reliefs as this Hon’ble Court deems fit to grant in the facts and circumstances of the case, including costs, in the ends of justice and equity.

2. Respondent No.1-State Bank of Patiala had issued a public notice for auction sale of the residential property bearing Municipal Corporation No.97 (PID No.38-12-97) situated at 2^nd Main Road, Coconut Garden, BBMP Ward No.38, Nagarabhavi, Bangalore under Section 13 (4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (hereinafter referred to as “Sarfaesi Act”).

3. The said auction was conducted on account of the dues of one Sri.Bhadraradhya of Rs.88,43,470/- to respondent No.1. The petitioner participated in the said auction by depositing an amount of Rs.16,50,000/- as EMD on 14.05.2012. Petitioner’s Bid being the highest, the auction was confirmed in favour of the Petitioner for a sum of Rs.1,65,01,000/. The balance 25% of the bid amount was directed to and was paid by the Petitioner on 16.05.2012.

4. The Petitioner thereafter applied for an Encumbrance Certificate with the Sub-register which was so furnished, when the Petitioner came to know of various transactions and that the said Sri. Bhadraradhya was not the owner of the property.

5. The Union Bank of India (not a party to these proceedings) had raised an objection that it has a charge over the property, in that background, the Petitioner filed WP No.22272 of 2012, which came to be disposed by this Court on 10.01.2013 where in this Court held that there was no hurdle for Respondent No.1 in proceeding ahead and completing all the formalities for sale and issuing a sale certificate in favour of the Petitioner. The State Bank of Patiala having contended that it has no objection for completing the transaction so long as the Petitioner deposits the remaining 75% consideration. There being a