The registration of a sale certificate under the SARFAESI Act remains valid even with existing judicial attachments, requiring aggrieved parties to lift those attachments via appropriate courts.

JUDGMENT

(Dated this the 10^th day of February 2026)

The petitioner is a financial institution, which advanced financial facility to respondent Nos.5 and 6 by way of a home loan to the tune of Rs.50,49,600/-. An extent of 2.23 Ares of land in Sy.no.103/16 in Adattu village was given as security. When the borrower defaulted in repayment, the bank proceeded against the secured assets and took possession of the same. The land was sold in a public auction and the 7^th respondent bid in the auction. The sale certificate dated 30.5.2024 was issued in favour of the 7^th respondent by the petitioner.

2. When the petitioner obtained encumbrance certificate from the office of the 1^st respondent, it showed that the 4^th respondent, who is the wife of the 5^th respondent, had obtained an attachment over the property mortgaged, on

5.2.2022. The petitioner, later engrossed Ext.P2 sale certificate in non - judicial stamp paper worth Rs.3,60,240/- and took an online token for Registration before the 1^st respondent. However, the 1^st respondent rejected the registration by Ext.P5 citing that there is an attachment by the Family court. In such circumstances, the petitioner approached this Court to call for records leading to Ext.P5, to quash the same and for a writ of mandamus directing the 1^st respondent to efface the attachment shown as entry No.2 in Ext.P3 Encumbrance Certificate.

3. A counter affidavit is filed by the 4th respondent wherein it is admitted that though 2.23 Ares of land owned by respondent Nos.5 and 6 was mortgaged with the petitioner as security for the home loan, the 4^th respondent was unaware that the property was sold to the 7^th respondent in a public auction.

4. The 4th respondent has filed O.P. No.46 of 2022 before the Family Court, Kottarakkara for recovery of gold ornaments and money against respondent Nos.5 and 6. In the said O.P., I.A. No. 1 of 2022 was filed for attachment of the land before judgment and the same was allowed by the Family court. A show cause notice was issued for furnishing security for Rs.75 lakhs and in the meanwhile a conditional order of attachment was issued on the property which was mortgaged. Respondent Nos.5 and 6 failed to furnish the above security and therefore, the attachment was made absolute. However, the property worth more than Rs.2 crores is now sold for Rs.45,03,000/-.

5. It is further submitted that respondent Nos.5 and 6 deliberately defaulted in payment of the home loan, because of the attachment made by the Family Court. Ext.P2 and Ext.P4 sale certificates engrossed in non - judicial stamp paper are in violation of the sub-rules under Rule 9 of the Security Interest (Enforcement) Rules , 2002 (for short ‘the Rules’).

6. Appendix V is the format of sale certificate to be issued by the authorised officer of the bank. The petitioner has not listed any encumbrance in Ext.P2 sale certificate whereas in Ext.P4, it is stated that ‘the sale of the scheduled property was made free from all encumbrances known to the secured creditor’. Before issuing the sale certificate, the petitioner ought to have taken the encumbrance certificate and if there was any encumbrance, the same ought to have found a place in Appendix V. The same should also have been mentioned in Ext.P4. According to the 4^th respondent, the petitioner has no right to file this Writ Petition seeking for a direction to the 1^st respondent to register Ext.P4 sale certificate after lifting attachment.

7. The counsel for the 4th respondent has relied on a judgment of the Madras High Court in W.A. No.15014 of 2022 and W.M.P. No.14231 of 2022 ( Indian Overseas Bank v. The Assistant Commissioner of Central Excise and Service Tax ), wherein the learned Single Judge