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2016 Supreme(Online)(KER) 19377
HIGH COURT OF KERALA
ASHOK BHUSHAN, CJ, A.M.SHAFFIQUE, J
STATE BANK OF INDIA – Appellant
Versus
SATHEESH BABU – Respondent
WA 2488 2015
SRI.R.S.KALKURA, SRI.P.CHANDRASEKHAR, SRI.THOMAS M.JACOB, SRI.AKHIL K.MADHAV, SRI.T.R.JERRY SEBASTIAN, SRI.P.I.DAVIS, SRI.D.KISHORE
A sale certificate under the SARFAESI Act requires actual delivery of possession to confer legal rights; the absence of possession allows for reissuance of the certificate.
Headnote:
SARFAESI - Sale Certificate - SARFAESI Act, 2002 - Sections 13(4), 13(6) and Rules 8, 9 - The court ruled that a sale certificate alone does not confer all rights unless possession is handed over, allowing reissuance of the certificate to the original auction purchaser.
Fact of the Case:
The appeal challenged a judgment directing a bank to issue a fresh sale certificate to a petitioner who, as the auction purchaser, sought the certificate in his name after another party received it but failed to take possession due to arrears on the property.
Finding of the Court:
The court found that the original sale certificate issued had no legal effect due to non-delivery of possession, and since the subsequent parties withdrew their claim, the bank was obliged to issue a fresh sale certificate to the original purchaser.
Issues: The appeal focused on whether a fresh sale certificate can be issued when the original certificate remains unexecuted and unregistered, despite the former parties relinquishing their claims.
Ratio Decidendi: The court held that a sale certificate under the SARFAESI Act does not complete the sale unless possession is delivered. Therefore, the bank must issue a fresh certificate if the original transaction failed.
Final Decision: The court modified the lower court's order, directing the bank to cancel the previous certificate and issue a new one to the petitioner.
J U D G M E N T
Shaffique, J.
This appeal is filed by the respondents 1 and 2 in WP(C) No.
5365/2015 challenging judgment dated 6/8/2015 by which the learned Single Judge disposed of the writ petition directing the Bank to issue a fresh sale certificate to the petitioner and to effect delivery of the property within a specified time.
2. The short facts involved in the writ petition would disclose that the 1st respondent in the appeal, who is hereinafter referred to as the petitioner, purchased certain item of property in an auction conducted by the 1st appellant exercising power under the SARFAESI Act, 2002 . Pursuant to the auction, he deposited the entire amount of `81 lakhs. Petitioner submits that he entered into a contract for sale of the property purchased by him with the 3rd and 4th respondents. The sale consideration was `1,50,00,000/- which he received and executed an agreement on 7/11/2008. As per the terms of the agreement, the sale certificate had to be obtained in the name of respondents 3 and 4. Accordingly, Ext.P3 sale certificate had been issued by the 2nd appellant, Authorized Officer in favour of respondents 3 and 4. Petitioner submits that after the auction, it was found that there had been substantial arrears and dues in respect of the property. Though sale certificate was issued, the property was not given delivery nor the sale certificate was registered in favour of respondents 3 and 4. In the meantime, a dispute had arisen between petitioner and respondents 3 and 4 and they approached this Court by filing WP (C) No. 3011/2012 seeking for a direction to deliver the property and to register the sale deed in their favour. By judgment dated 13/3/2012 in WP(C) No. 3011/12, this Court disposed of the writ petition directing the Bank to register the sale certificate issued in the name of respondents 3 and 4 and also to deliver the property in terms of Rule 9(9) of the Security Interest (Enforcement) Rules, 2002 . However, the registration did not take place as according the petitioner, Bank was not amenable for incorporating a clause to safeguard the interest of respondents 3 and 4. Respondents 3 and 4 approached this Court again by filing WP(C) No.
20707/2013 seeking refund of `81 lakhs paid by them. During the pendency of the writ petition, the petitioner settled the matter with respondents 3 and 4 by paying back the entire amount. An affidavit was filed before this Court along with letter dated 17/10/2013, which is produced as Ext.P5. In the said letter addressed by respondents 3 and 4 to the Authorized Officer, they confirmed of having received certain amounts from the petitioner in full and final settlement and they have also stated that they were surrendering the sale certificate and that all prior agreements shall stand terminated. The writ petition was disposed of by this Court as per judgment dated 4/11/2013 observing that “it is open to the Bank to issue the sale certificate to the 3rd respondent or to his nominee notwithstanding Ext.P8 judgment in view of the changed circumstances”. Ext.P8 is the judgment in WP(C) No. 3011/2012. The 3rd and 4th respondent surrendered the sale certificate as per letter dated 7/11/2013. The Bank filed RP No.941/13 in WP(C) No. 20707/13 seeking to review the said judgment on the ground that a sale certificate had already been issued and the Bank cannot issue another sale certificate. By order dated 10/12/2013 in RP No.941/2013, this Court deleted para 3 of judgment dated 4/11/2013. However, it was made clear that the right of the 3rd respondent in the writ petition (petitioner herein) to get a fresh sale certificate issued in his name is left open to be agitated before the appropriate forum. Later, the petitioner filed RP No. 248/2014 in WP(C) No. 3011/2012, seeking for a direction to the Bank to issue sale certificate in his name. By order dated 7/1/2015 it was clarified that directions in WP(C) No. 3011/2012 will not stand in the way of the review petitioner in seeking r
