O R D E R

The Refusal Check Slip dated 25.02.2023 issued by the first respondent, is under challenge in the present writ petition.

PETITIONER'S CASE:

2. The petitioner is Indian Bank, questioned the validity of returning the Sale Certificate presented for registration under the Registration Act, 1908.

3. The principles already settled by the High Courts and the Supreme Court, are not in dispute between the parties to the writ petition on hand.

4. Admittedly, the first mortgage was created by the borrowers in the petitioner-Indian Bank on 13.05.2014. The second mortgage by way of Supplemental Deed was created on 20.11.2014 and the third mortgage was created on 05.10.2015. The order of attachment was passed by the Principal District Court, Karur in OS No.104 of 2016 on 20.07.2017 and on

19.01.2021.

5. The account of the borrower was declared as Non-

Performing Assets. Consequently, the demand notice was issued under Section 13(2) on 20.01.2021. Publication was made on 26.01.2021 and possession notice was issued under Section 13(4) of the Act, on 13.07.2021. Auction sale notice was issued on 08.12.2022 and E-Auction was held on 26.12.2022. The conditional order was passed by the Debts Recovery Tribunal, Coimbatore in S.A.No.1163 of 2022 to pay a sum of Rs.1,40,00,000/- by an order dated 26.12.2022. After conducting public auction, the petitioner-Bank issued Sale Certificate to the Auction Purchaser on 23.02.2023. Sale Certificate issued was presented for registration under the provisions of the Registration Act, 1908. The Sub Registrar returned the Sale Certificate on the ground that the subject property was attached by the Principal District Court, Karur in OS No.104 of 2016 and therefore, the documents cannot be registered in view of the bar imposed under Section

22-B of the Registration Act, 1908.

6. The learned Senior Counsel appearing on behalf of the writ petitioner mainly contended that the petitioner-Bank is the secured creditor holding first charge over the subject property and empower to deal with the property to realise the debts. They acted in accordance with the SARFAESI Act, 2002 and the Rules and accordingly auctioned the property through public auction and consequently issued Sale Certificate in favour of the successful Auction Purchaser.

7. It is mainly contended that the attachment issued by the Principal District Court is not binding on the petitioner-Bank in view of Order XXXVIII, Rule 10 of the Code of Civil Procedure and Section 26-E of the SARFAESI Act. Order XXXVIII, Rule 10 of the Code of Civil Procedure speaks about “attachment before judgment not to affect the rights of strangers, nor bar decree-holder from applying for sale”. Section 26-E of the SARFAESI Act, provided “priority to secured creditors”. Accordingly, the petitioner-Bank holds first charge over the property and more-so the mortgage was created prior to the attachment of the property by the Principal District Court, Karur.

8. In support of the above contentions, the learned Senior Counsel for the petitioner relied on the judgment of the Hon'ble Division Bench of Madurai Bench dated 31.08.2023 passed in WP (MD) No.674 of 2023. The Hon'ble Division Bench considered the judgments of the Apex Court of India on the principles relating to secured creditors holding first charge over the mortgaged property under Section 26-E of SARFAESI Act. The Hon'ble Division Bench further considered that the subsequent attachments are not binding on the secured creditors in view of Order XXXVIII, Rule 10 of Code of Civil Procedure. Section 64 of Code of Civil Procedure bars 'private transfer'.

9. The transfer in the present case is an involuntary transfer. It is the secured creditor, who has exercised his right under the Special Act, is the SARFAESI Act, 2002. The Hon'ble Division Bench of Madurai Bench of this Court considered the scope of Section 26-E of the SARFAESI Act, 2002, which starts with a non obstante clause. However, neither the Government Pleader nor the couns