Subsequent attachments do not impair the validity of prior mortgages, even if attachments arise after the mortgage date.

JUDGMENT

The petitioner, a banking company brought to sale an item of property belonging to one Mr. P Y Ashraf under the provisions of the SARFAESI Act . On the sale being confirmed in favour of the auction purchaser, a sale certificate (Ext.P10) was issued. However, the 1st respondent has refused to register the sale certificate on the ground that there are attachments reflected in the encumbrance certificate.

2. The learned counsel appearing for the petitioner would submit that the attachments reflected in the Encumbrance Certificate (Ext.P7) are at the instance of respondents 4, 5, and 6. It is submitted that the attachments in question were obtained after the date of mortgage in favour of the petitioner. It is submitted that the mortgage was on 10.12.2004 and the attachments mentioned in Ext.P8 are obtained in the years 2018 and 2021. It is submitted that going by the law laid down by this court inKeechery Service Co-operative Bank Ltd. v. Sajitha Nizar [2020 (6) KLT 68] andMadhan v. Sub Registrar [2014 (1) KLT] the mortgage is not affected by subsequent attachments and therefore, notwithstanding the attachments, the 1st respondent is to be directed to register the sale certificate.

3. The learned Government pleader would submit that going by the recent judgment of a Division Bench of this court Tahsildar (RR) v.Nizamudheen [2023 (1) KHC 248 ] where the attachments are to recover dues to the Government either on account of taxes or otherwise, the sale will always be subject to such attachments, whether or not such attachments are after the date of mortgage or otherwise. It is submitted that since it is the assertion of the petitioner that the only attachments/proceedings are at the instance of respondents 4 to 6, it must be made clear that notwithstanding the registration of the sale certificate proceedings of any other nature including any action against the property to recover any dues to the Government will not be affected by the registration of the sale certificate.

4. Though notice was issued in this Writ Petition to respondents 4 to 7, there is no appearance for respondents 4 to 7.

5. Having heard the learned counsel appearing for the petitioner and taking into consideration the law laid down by the Division Bench of this court inKeechery Service Co-operative Bank Ltd. v. Sajitha Nizar [2020 (6) KLT 68] and Madhan v. Sub Registrar [2014 (1) KLT] I am of the view that the petitioner is entitled to succeed. The Division Bench judgment of this court inTahsildar (RR) v.Nizamudheen [ 2023 (1) KHC 248 ] does not lay down any law contrary to the law laid down in Keechery Service Co-operative Bank Ltd. (Supra) in so far it relates to attachments obtained by private parties or entities other than the state.

6. Accordingly, this Writ Petition is allowed. The 1st respondent is directed to register Ext.P10 sale certificate notwithstanding the encumbrances obtained at the instance of respondents 4 to 6 which is reflected in Ext.P7 Encumbrance Certificate. Consequently, the 3rd respondent shall also affect mutation. It is made clear that the registration of the sale certificate as directed in this judgment shall neither affect any other proceedings, charge or attachment at the instance of any other person other than respondents 4 to 6, nor shall it prejudice their claims in any manner.