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IN THE HIGH COURT OF KERALA AT ERNAKULAM
ANIL K. NARENDRAN, P.G. AJITHKUMAR, P.M. MANOJ, JJ.
Fathima D/o Ismail - Appellant
Versus
Canara Bank, Kanjikode Branch - Respondent
ICR (WA) No. 7 of 2025, W.A. No. 1087 of 2024, W.P. (C) Nos. 1761, 5522, 5675, 5740, 6301, 10099, 10737, 14018, 17036, 21285, 32200, 34043 of 2024, W.P. (C) Nos. 7115, 24723, 34928, 36701, 41544 of 2023
Decided On : 19-05-2025
Key Points: - The SARFAESI Act enables secured creditors to enforce security interests without court intervention, and sale certificates issued under the Act must be registered (!) (!) (!) . - Entries of civil court attachments in Book No.1 cannot be deleted or effaced by the registering authority, and such deletion would interfere with judicial orders (!) (!) (!) . - The High Court cannot issue writs directing effacement of attachment entries or ordering registration in a manner that circumvents statutory procedures available to the parties (!) (!) (!) . - Where a sale is completed under the SARFAESI Act, post-mortgage attachments stand extinguished, but the remedy to remove such entries lies with the civil court, not through a writ petition (!) (!) (!) . - The writ jurisdiction under Article 226 is limited to enforcing legal duties imposed by law and cannot be used to direct registration in a manner that contradicts existing statutory frameworks (!) (!) (!) . - Priority of the secured creditor’s claim prevails over subsequent attachments and government dues following proper registration under the SARFAESI Act (!) (!) (!) .
| Table of Content |
|---|
| 1. the rules regarding registration of sales under sarfaesi act. (Para 1 , 4 , 6) |
| 2. the priority of the secured creditor's claims over attachment orders. (Para 10 , 12 , 14) |
| 3. judicial authority is required for effacing entries of attachments. (Para 15 , 22 , 28) |
ORDER :
| INDEX | ||
| S. No. | Description | Pages |
| 1 | Background | 3-5 |
| 2 | Another batch of references | 5-8 |
| 3 | Consistency in precedents vis-a-vis need for law to be socially relevant | 9-16 |
| 4 | Can a Single Judge make a reference to a Full Bench? | 16-21 |
| 5 | Scope of hearing third parties | 21-22 |
| 6 | Scope of the reference | 22-26 |
| 7 | Submissions on the precise question referred | 26-32 |
| 8 | Evolution of the Securitisation law | 32-40 |
| 9 | Extant provisions of law | 40-52 |
| 10 | Priority to the claim of secured creditor and overriding effect of SARFAESI Act | 52-63 |
| 11 | Effect of the amendment to the SARFAESI Act by Act 44 of 2016 | 63-65 |
| 12 | Attachment and sale under the Code of Civil Procedure – nuances | 66-73 |
| 13 | Attachment is not an encumbrance on the property | 73-75 |
| 14 | Once sale takes place the attachment falls on ground | 75-79 |
| 15 | Sale by authorised officer and stamp duty | 79-82 |
| 16 | Process of registration under the Registration Act and SARFAESI Act - compared | 82-85 |
| 17 | Scope of deletion of an entry in Book No.1 | 85-89 |
| 18 | Sale certificates should be registered dehors attachment | 89-105 |
| 19 | Can the High Court issue a writ of mandamus directing the registering officers to register a sale certificate? | 106-113 |
| 20 | Can the High Court issue a writ of mandamus or certiorari directing to efface an entry in Book No. 1? | 114-119 |
| 21 | What shall be the appropriate relief? | 120-127 |
| 22 | References are answered | 127-129 |
Background
1. Canara Bank sold an immovable property in terms of Section 13 (4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) and issued a sale certificate in favour of the auction purchaser. The Sub Registrar, Palakkad refused to register the said sale certificate saying that the property in question was subject to an attachment as per the order of the Family Court, Palakkad in I.A.No.1 of 2024 in O.P.No.275 of 2024. The Bank filed W.P.(C) No.10099 of 2024 seeking a writ of mandamus directing the Sub Registrar to register the sale certificate and such other reliefs. The learned Single Judge allowed the writ petition and directed the Registrar to conduct an inquiry on the limited factual issue, whether the order of attachment was after creation of the mortgage in favour of the Bank and if so, to make an additional entry in Book No.1 as provided in Section 89(5) of the REGISTRATION ACT , 1908 and to enter therein that the order of attachment stood effaced. In doing so, the learned Single Judge placed reliance on the Single Judge decision of this Court in Madhan S. v. Sub Registrar, Kollam , 2014 (1) KLT 406 and the decision of the Division Bench of this Court in Ali Asharaf v. The Sub Registrar , 2015 (3) KLT OnLine 1117 and Secretary, Keechery Service Co-operative Bank Ltd. v. Sajitha Nizar @ Sajitha P.M. 2020 (5) KHC 231 .
2. Wife of the debtor had obtained the order of attachment in question. She filed W.A.No.1087 of 2024 impugning the judgment in W.P.(C) No.10099 of 2024. The Division Bench doubted correctness of the law laid down in Madhan S. 2014 (1) KLT 406 , which stood affirmed by the Division Benches, referred the matter to a Larger Bench. Thus, the matter came up before us. The order of reference dated 31.07.2024 reads:
“In this appeal, a question arises as to the competency of the writ court's jurisdiction to declare that an attachment effected by a competent court, such as a Family Court or Civil Court, is invalid under Article 226 proceedings. The essential prayer sought is for registration of a document notwithstanding the attachment passed by the civil court or family court. The learned Single Judge of this Court in S. Madhan v. Sub Registrar, 2014 (1) KLT 406 held that attachments effected subsequent to the mortgage created in favour of the bank have no consequences and such an attachment will h
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