Back
2024 Supreme(Online)(MAD) 14987
HIGH COURT OF MADRAS
N. SATHISH KUMAR, J
AMUDHA – Appellant
Versus
THE SUB REGISTRAR – Respondent
The rights of secured creditors under the SARFAESI Act prevail over civil court attachments, allowing for the registration of deeds.
Headnote:
Refusal - Writ Petitions - SARFAESI Act - Secured Creditors' Rights - The court emphasized that mortgage rights under the SARFAESI Act take precedence over civil court attachments, thus supporting the registration of deeds despite existing attachments.
Fact of the Case:
Writ Petitions were filed against the Sub-Registrar's refusal to register sale deeds dated 07.03.2024 and 08.03.2024, citing civil court attachments on properties already mortgaged and sold under the SARFAESI Act.
Finding of the Court:
The court found that the existence of an attachment does not eliminate the owner's rights to deal with their properties and prioritized the secured creditor's rights over attachments by civil courts.
Issues: Whether the Sub-Registrar could refuse registration of sale deeds based on civil court attachments after properties were mortgaged and subsequently sold under the SARFAESI Act.
Ratio Decidendi: The court established that the rights conferred under the SARFAESI Act on secured creditors supersede civil court attachments, thereby invalidating the Sub-Registrar's refusal.
Final Decision: The Writ Petitions were allowed and the refusal orders set aside, directing registration of sale deeds.
COMMON ORDER
These Writ Petitions have been filed for the issuance of a Writ of Certiorarified Mandamus, to call for the records pertaining to the impugned refusal check slips dated 07.03.2024 and 08.03.2024 of the Sub-Registrar and quash the same and consequently, direct the Sub- Registrar to register the sale deeds dated 07.03.2024 and 08.03.2024 which was presented by the petitioners.
2. With the consent of both sides, these Writ Petitions are disposed of at the admission stage itself.
3. Heard Mr.S.Sheik Ismail, learned counsel for the petitioners and Mr.Yogesh Kannadasan, learned Special Government Pleader for the respondents.
4. Challenge has been made to the refusal slips issued by the Sub-
Registrar mainly on the ground that the subject properties were already attached by the Civil Court. It is the contention of the petitioners that the properties were originally mortgaged in favour of the Federal Bank in the year 2016 and 2017. As the loan became non-payable, the Federal Bank initiated proceedings under SARFAESI Act and the properties were sold in public auction on 08.04.2022. Thereafter, the petitioners purchased the subject properties. In the meanwhile, pending mortgage, an attachment order has been passed by the Civil Court. Based on the said attachment, now the sale deeds are not registered by the Sub-Registrar, Namakkal.
5. The learned Special Government Pleader who takes notice for the respondents submitted that since attachment is entered, the Sub-
Registrar has refused to register the documents.
6. I perused the materials. Even assuming that there is an attachment that will not take away the right of the owners to deal with the properties. This aspect has already been dealt by this Court in the cases of N. Ramayee v Sub-Registrar reported in (2020)6 CTC 697 and G.Rajasulochana Vs. Inspector General of Registration and others (W.P.No.29706 of 2022).
7. Particularly, even assuming that any attachment is made by the Civil Court, it is only insignificant. Since mortgage was already in existence in the year 2016 itself, pursuant to the said mortgage, the properties were sold under SARFAESI Act . According to the said Act, the secured creditor will have the first priority over the other. Such being a position, the refusal check slips cannot be sustained in the eye of law.
Accordingly, the same has to be quashed.
8. In the result, these Writ Petitions are allowed. The impugned orders in RFL/ Sendhamangalam/31/2024 dated 07.03.2024 and RFL/ 1 Joint Sub Registrar, Namakkal /21/2024 dated 08.03.2024 are set aside.
The Sub-Registrar is directed to register the documents submitted by the petitioners, within a period of two weeks from the date of receipt of a copy of this order. No costs. Consequently, connected miscellaneous petitions are closed.
Index : Yes /No 30.04.2024 Speaking / Non-speaking Neutral Citation : Yes / No gsk To
1.The Sub Registrar, Office of the Sub Registrar, Sendhamangalam, Namakkal.
2.The Sub Registrar, Office of the Sub Registrar, Namakkal Joint I, Namakkal.
N .SATHISH KUMAR, J.
gsk and W.M.P.Nos.13015 & 13022 of 2024
30.04.2024
