ORDER :

[This matter has been heard through video conference]

This writ petition has been filed challenging the check slip issued by the 1st respondent - Sub Registrar, Sulur, refusing to register the sale certificate dated 26.03.2021 presented by the petitioner for registration on the ground that there is an order of attachment of the property before judgement being in force.

2. The petitioner is a non banking financial company. The case of the petitioner is that respondents 2 to 5 herein had obtained housing loan on 28.07.2017 to the tune of Rs.99,02.305/- from the petitioner financial institution. The respondents 2 to 5 had also created equitable mortgage (security interest) over the properties in favour of the petitioner by depositing the title deeds on 28.07.2017 which was duly registered on the same date before the Office of the Sub Registrar, Sulur. Thereafter, as the borrowers failed to repay the loan amount, their loan account was declared as Non Performing Assesses (NPA) and a proceedings was also initiated under The Securitisation and on Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short, "the SARFAESI Act") and possession was also taken on 11.10.2019. Subsequently, the property was brought for auction sale on 03.03.2021, ultimately it was sold to the 2nd respondent and a sale certificate was also issued in his favour on 26.03.2021. When the above sale certificate was presented for registration on 16.04.2021, the 2nd respondent refused to register the same on the ground that the secured assets were subjected to an order of attachment before judgement in I.A.No.2 of 2020 in O.S.No.79 of 2020 on the file of the Additional District Court, Coimbatore. Challenging the same, the present writ petition has been filed.

3. Considering the relief sought for in the writ petition and the nature of the order which is proposed to be passed in this writ petition, notice to the private respondents is not necessary and therefore, the notice as against the respondents 2 to 5 is dispensed with.

4. Heard the learned counsel appearing for the petitioner and the learned Special Government Pleader appearing for the 1st respondent.

5. The learned counsel for the petitioner would submit that the equitable mortgage was created by depositing the title deeds relating to the property as early as on 28.07.2017 whereas the order of attachment before the judgement was passed by the civil court only on 08.03.2020 and therefore, the same will not bind on the petitioner, who is secured creditor.

6. The learned counsel for the petitioner relying upon Section 26-E of The SARFAESI Act and Section 31-B of The Recovery of Debts and Bankruptcy Act, 1993 would further contend that the right of a secured creditor to realize the debts will prevail over the debts due to an unsecured creditor. Therefore, the existence of any order of attachment prior to or subsequent to the mortgage cannot be a bar for registration of a sale certificate issued by the secured creditor. Further, according to the learned counsel, the suit is a collusive one filed by the unsecured creditor at the instigation of the 3rd respondent herein and the unsecured creditor had managed to get an ex parte order of attachment before judgement without impleading the petitioner as a party to the proceedings and therefore, the order of attachment will not bind on the petitioner.

7. Per contra, the learned Special Government Pleader appearing for the 1st respondent would contend that the property for which sale certificate has been issued is subjected to an order of attachment by a civil court and an Encumbrance has also been made in the register. In those circumstances, the 1st respondent was absolutely right in refusing to register the sale certificate and such order cannot be termed as illegal. Therefore, the learned Special Government Pleader prayed this court to sustain the order passed by the 1st respondent and to dismiss the writ petition.

8. The issue involved