A security interest registered with CERSAI under Section 26E of the SARFAESI Act grants the secured creditor priority over all other debts, including subsequent statutory dues like those under the EPF Act, rendering later attachments by such authorities unenforceable against the secured asset.

JUDGMENT :

Mohammed Nias C.P., J.

The petitioners claimed title over an extent of 6.66 Ares of property and building comprised in Re-Sy. No.2 in block No.50 in old Sy. No.218/26-52 of Sasthamangalam Village, Thiruvananthapuram District. The said property was held under mortgage to the third respondent Bank, and when the debtor committed defaults, the bank proceeded under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the SARFAESI Act').

2. It is stated that the third respondent auctioned the property. The petitioners became the successful bidders, and a sale certificate bearing No. 1027 of 2023, dated 04.04.2023, was issued, as seen from Ext. P1. Though the sale was on 07.09.2020, the issuance of the sale certificate was delayed due to the pendency of S.A.No.365 of 2019, which was dismissed as per Ext.P2 order dated 30.03.2023. A third party had also sought to be impleaded in the securitisation proceedings, whose application was dismissed by the Tribunal and confirmed by this Court in O.P.(DRT) No. 426 of 2022, as seen from Ext. P2.

3. The petitioners submit that the right created after the mortgage to the bank will not survive, going by Section 26E of the SARFAESI Act. After acquiring the property as per Ext.P1 sale certificate, the petitioners preferred W.P.(C) No.16251 of 2023 before this Court for a direction to the Village Officer, Sasthamangalam, to effect mutation, which was allowed as per Ext.P4 judgment on 22.06.2023. The petitioners submit that after mutating the property as per the above judgment, when they obtained a copy of the Thandapper Extract from the Sasthamangalam Village Office, which is marked as Ext.P5, it was seen that the said property is subject to attachment vide two civil court orders and an order issued by the first respondent, Employees Provident Fund Organisation. The petitioners submit that, regarding the attachment order issued by the civil court, they have already taken steps to lift the attachment. The prayer in this case is confined to the claim of the Employees Provident Funds Organisation.

4. It is seen from Ext.P5 that EPFO attached the property as per the letter dated 19.12.2022 for the dues of an amount of Rs. 72,47,403 from M/s. Intimate Medicines Pvt Ltd, Thiruvananthapuram. The prayer in this writ petition is to direct the second respondent to efface all entries made in Ext.P5 Thandapper Account made at the instance of the first respondent by declaring that the first respondent has no right or authority to demand such endorsement.

5. The petitioners rely on the judgment of the Full Bench of this Court in Fathima v. Canara Bank, Palakkad [2025 KHC OnLine 521] the Full Bench of the Bombay High Court in Jalgaon Janta Sahakari Bank Ltd. Joint Commissioner of Sales [2022 KHC OnLine 5615], apart from Section 26E of the SARFAESI Act. The petitioners also contend that the property in question cannot be treated as an asset of the establishment and therefore, Section 11 of the Employees Provident Fund and Miscellaneous Act, 1952 will not apply.

6. The first respondent, EPFO, in its counter affidavit, contends that M/s. Intimate Medicines Pvt. Ltd. is covered under the EPF Act and has defaulted on statutory contributions. In exercise of powers under Section 11 (2) of the EPF Act, the first respondent attached the property via communication dated 19.12.2022. It is submitted that the EPFO has a statutory charge on the properties of the defaulter, which t