Arbitral tribunals cannot directly enforce attachment orders on revenue records without civil court intervention; prior mortgages prevail.

JUDGMENT

Dated this the 3^rd day of March, 2026 The 1^st petitioner is a banking company having its registered office at Mumbai. On 01.07.2023, the petitioner took over the business activities of M/s Housing Development Finance Corporation Ltd, a non-banking housing finance company, through a merger. The said non- banking finance company, while in existence, had taken possession of an immovable property / secured asset having an extent of 1.21 Ares in Sy.No.213/4C of Kottuvally Village along with a residential house, consequent to the default in repayment of financial assistance given by the bank under the SARFAESI Act . Thereafter, the said property was sold through public auction, in which the 2^nd petitioner was the successful bidder. Subsequently, a Sale Certificate dated 04.03.2024 was issued in favour of the 2^nd petitioner by the

1^st petitioner.

2. Thereafter, at the request of the 2^nd petitioner, the 1^st petitioner intended to register the sale certificate before the 2^nd respondent Sub Registry Office and an encumbrance certificate was obtained for that purpose. However, the encumbrance certificate revealed an attachment order passed by an Arbitral Tribunal in respect of the said property at the instance of the 5^th respondent Finance Company in I.A. No.298/2021 in ARB Ref No.69/2021. A perusal of Ext.P1 loan agreement shows that, the attachment was obtained subsequent to the creation of the mortgage in favour of the 1^st petitioner . The Arbitral Tribunal had passed the attachment order without considering the prior mortgage and charge created over the property. Moreover, the attachment communication was effected without the assistance or enforcement through a competent civil court, as required under law. Since the attachment entry appeared in the encumbrance certificate, the petitioners were unable to register the sale certificate before the Sub Registrar Office. Aggrieved by the same, the present writ petition is filed by the petitioner seeking the following reliefs:

i. Issue a writ of mandamus or any other appropriate writ or order directing the 2^nd respondent to efface the encumbrances noted in to Exhibit-P3 certificate enabling the petitioners to get it register the sale certificate on records.

ii. This Hon’ble Court may be pleased to dispense with the translation of the vernacular documents produced in this case.

iii.To grant such other appropriate writ or direction which this Hon’ble Court found proper in the facts and circumstances of this case.

3. The learned counsel for the petitioner relies on a judgment of a Division Bench of this Court in M/s.Shriram Transport Finance Co. Ltd. v. Saneesha M.S and Ors. [2024 SCC online Ker 5233] wherein, it was held as follows:

“10. The question is what is the remedy then available for a third party who is aggrieved by an order of attachment. So long as the order is not enforced, the same is not self workable. If it is enforced through a civil court, necessarily, the third party, who is aggrieved can raise his objection against the enforcement or even after the enforcement, the third party can very well raise an objection as against the enforcement by claiming that the property belongs to him. The Code of Civil Procedure provides necessary mechanism for the third party to raise a claim or title over the property. We are of the view that the writ petitioner -Saneesha M S, is not deprived of any remedy as the Code of Civil Procedure safeguard such interest of the third parties. The law is very clear that the tribunal cannot exercise sovereign function of enforcement and such power is vested with civil court. Therefore, writ petitioner - Saneesha