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2025 Supreme(Online)(Mad) 58145
IN THE HIGH COURT OF JUDICATURE AT MADRAS
MRS. J. NISHA BANU, S.SRIMATHY, JJ
Tamilnad Mercantile Bank Limited – Appellant
Versus
The Sub-Registrar, Karunthanttangudi Registrar Office – Respondent
W.P.(MD)No.5488 of 2024
For the Appellants/Petitioners: Mr.N.Dilip Kumar
For the Respondents: Mr.Veera Kathiravan, Mr.P.T.Thiraviyam, Mr.R.Devaraj
The secured creditors hold priority over competing claims on mortgaged properties, emphasizing the need for proper recording of priorities in registration to facilitate enforcement of rights.
Headnote:(A) Constitution of India - Article 226 - SARFAESI Act, 2002 - Section 13(2), 13(4), Section 26E - Registration Act, 1908 - Section 22-B - Writ of Mandamus sought to delete encumbrance attachment on mortgaged property - Petitioner bank availed a mortgage prior to the respondent's attachment - Court upholds priority of secured creditors under Section 26E over later attachments and directs Sub Registrar to make a contra entry reflecting bank's priority - Writ allowed. (Paras 1, 8, 20, 21)
(B) Jurisdiction of the Sub Registrar - The court discusses the limitations of the Sub Registrar’s power regarding attachment entries and clarifies that while direct deletion may not be permitted, recording priorities through contra entries is essential to uphold the rights of secured creditors - Importance of customary practices in registration. (Paras 8, 16, 18)
| Table of Content |
|---|
| 1. background of the petition seeking to delete attachments. (Para 1 , 2) |
| 2. legal arguments regarding priority debts and encumbrances. (Para 3) |
| 3. discussion on statutory provisions governing registrations. (Para 5) |
| 4. court's clarification on the powers of the sub registrar. (Para 7 , 8 , 9) |
| 5. conclusion directing the sub registrar to record priority through entries. (Para 10 , 11 , 12 , 13 , 14) |
ORDER
(Order of the Court was delivered by S.SRIMATHY, J.
The present writ petition is filed for Writ of Mandamus, to direct the 1st respondent, Sub Registrar, Karuthanttangudi, Thanjavur District, to efface/delete the encumbrance attachment entry, Doc.No.12 of 2022, registered on 27.09.2022 and to efface/delete the encumbrance attachment entry, Doc.No.15 of 2022, registered on 08.10.2022, as against the schedule mentioned property as per petitioner's representation, dated 06.12.2022.
2. The brief facts are that on 22.12.2015, the 2nd respondent availed credit facility for a sum of Rs.30,00,000/- from the petitioner bank and had executed loan documents on 23.12.2015 and registered mortgage by deposit of title deeds in Doc.No.3734 of 2015 in the office of Sub-Registrar, Karunthanttangudi, regarding Item No. 1. The loan was revised on various dates from 24.05.2016 to 15.11.2021 and supplement mortgage deeds were also registered, pertaining to the subject properties for the enhanced loans. The above loan was enhanced to Rs.1,42,00,000/- and Supplemental Memorandum of Deposit of Title Deed was registered vide Doc.No.3572 of 2021 in the office of Sub-Registrar, Karunthanttangudi. The respondents 3 and 4 stood as guarantors for the credit facilities. The respondents 2, 3 and 4 committed defaults in repayment and the accounts were classified as Non-Performing Assets with effect from 29.07.2022. The petitioner bank issued the statutory demand notice, dated 20.08.2022 under Section 13 (2) and then possession notice dated 02.11.2022 under Section 13 (4) of SARFAESI Act. The petitioner bank issued auction sale notice, dated 19.12.2022, 07.02.2023, 06.03.2023, 23.05.2023, 19.06.2023 and 25.09.2023 under Section 13 (4) of SARFAESI Act. The property was not sold for want of bidders. The petitioner bank filed O.A.No.248 of 2023, before the Learned DRT-II, Chennai and the same is pending. In the meanwhile, the petitioner bank came to know about the two attachment entries registered in the office of the 1st respondent, Sub Registrar vide Doc.No.12 of 2022, dated 27.09.2022 and vide Doc.No.15 of 2022, dated 08.10.2022, on the subject mortgaged properties. The above attachment entries had been effected as per order passed by an Arbitrator, in a claim petition filed by the 5th respondent. The alleged two attachment entries obtained by 5th respondent is hindering the petitioner bank from initiating further action on the schedule property since bidders are wary to bid, because of the attachment entries. The respondents 1 and 5 had acted mechanically, failed to consider the fact that the mortgage rights of the petitioner bank are available since 23.12.2015, which will prevail over the claim of the 5th respondent, which is on later year 2022. The petitioner bank had submitted a detailed representation to the 1st respondent on 06.12.2022 with a request to delete the encumbrance attachment entry Doc.No.12 of 2022, dated 27.09.2022 and vide Doc.No.15 of 2022, dated 08.10.2022, as against the schedule mentioned property, but the 1st respondent did not consider till date, the present writ petition is filed.
3. The 1st respondent has filed written submissions stating that the core issue is that the registration of sale certificate has been refused on the ground of previous attachment made by the statutory bodies. The petitioner had submitted that the law laid down by the Hon'ble Supreme Court and also keeping in mind the provisions of Section 26E of the SARFAESI Act, the debts due to a secured creditor shall be paid in priority over other debts/ taxes pa
