Subsequent attachments do not affect a bank's right to sell mortgaged property under the SARFAESI Act.

JUDGMENT

The petitioner Bank has filed this writ petition for a direction to the Sub Registrar and the Village Officer to efface the attachments entered in Ext.P4 encumbrance certificate which are subsequent to the equitable mortgage created in its favour by its borrowers, and for direction to register Ext.P5 sale deed in favour of the 3rd respondent.

2. One Mr. P.L.Thomas, proprietor of M/s.Manikutty Tours and Travels availed credit facilities from the petitioner bank by creating equitable mortgage by deposit of title deeds on 02.02.2011. Ext.P1 is the copy of the letter of deposit of title deeds. Since the borrower defaulted payment of installments, the petitioner initiated proceedings under the SARFAESI Act , and the property was sold to the 3rd respondent as per Ext.P3 sale certificate dated 24.03.2022.

3. When the 3rd respondent took steps to register Ext.P5 draft sale deed, the 1st respondent Sub Registrar informed that the registration of the sale deed is possible only if the attachments of Civil Courts entered in Ext.P4 encumbrance certificate are lifted. The petitioner contends that the attachments entered in Ext.P4 encumbrance certificate are secured by respondents 4 to 10 much subsequent to the creation of equitable mortgage by the borrower in favor of the petitioner on 02.02.2011, and the same are liable to be effaced consequent to the sale conducted by the petitioner under the SARFAESI Act . Accordingly, the petitioner has filed this writ petition for direction to respondents 1 and 2 to efface the attachments entered in Ext.P4 encumbrance certificate subsequent to the equitable mortgage created in its favour by its borrower, and for direction to the 1st respondent to register Ext.P5 sale deed in favour of the 3rd respondent.

4. Heard Sri.P.Paulochan Antony, the learned counsel for the petitioner, Sri.D.Anilkumar, the learned counsel for the 3rd respondent, Sri.K.B.Gangesh, the learned counsel for the 6th respondent, Sri.K.M.Muhammed Hussain, the learned counsel for respondents 8 and 9 and Smt.Deepa.V, the learned Government Pleader.

5. The learned counsel for the petitioner relied on the decision of this Court inTravancore Devaswom Board v. Deputy Examiner, Local Fund Audit and Others [ 2020 (3) KHC 129 ], State Bank of India& Others v. State of Kerala & Others [2019 (4) KLT 521], Housing Finance Corporation and another v. Sub Registrar Officer & Others [ 2011 KHC 851 ], Madhan S. v. Sub Registrar, Kollam and Others [2014 (1) KHC 249: 2014 (1) KLT 406 : ILR 2014 (1) Ker.586: 2014 (1) KLJ 483: AIR 2014 Ker.54] and contends that the sale carried out under the SARFAESI Act takes precedence over charges created under other State enactments and that the attachment effected subsequent to the creation of equitable mortgage will not affect the right of the Bank to sell the mortgaged property. The borrower has lost his right to redeem the property in terms of Section 13 (8) of the SARFAESI Act and as per Section 26(E) of the SARFAESI Act , after the registration of security interest, the debts due to the secured creditor shall be paid in priority over all other debts. Referring to Ext.P4 encumbrance certificate, it is contended that all the attachments entered therein are subsequent to 02.02.2011, the date of creation of equitable mortgage in favour of the petitioner.

6. A counter affidavit has been filed on behalf of the 1st respondent stating that when a Court attachment is received in the Sub Registrar Office, it must be filed as per Sections 89(5), 51(2) of the Registration Act, 1908 and shall be indexed as per Section 54 of the said Act and the Registering officer has no power to efface any entries and only option is to have the attachment lifted by competent Court.

7. A counter affidavit is filed by respondents 8 and

9 also. It is stated therein that the borrower is not made a party to the writ petition and the writ petition is bad for non-joinder of necessary party. It is further stated that when the said respondents obt