HOUSING DEVELOPMENT FINANCE Vs. K A IQBAL

JUDGEMENT

(1.) The issue involved in this case is whether the attachment ordered over the property by a Civil Court, much after the creation of the security interest over the same in connection with a loan obtained by the borrower from the first petitioner/Bank, is having any adverse consequence with regard to the rights and liberties of the Bank and the successful bidder - who has satisfied the sale consideration, in the public auction pursuant to the proceedings under the SARFAESI Act (Act in short). The sequence of events as narrated in the writ petition shows that the property in question was given as security by the owner, while availing the loan from the first petitioner/Bank. In view of the continuing defaults, the Bank proceeded with steps issuing Ext. P1 notice under Section 13(2) of the SARFAESI Act, on 10.10.2008. Since there was no response on the part of the defaulter, the Bank filed a petition under Section 14 of the Act, before the Chief Judicial Magistrate's Court, Ernakulam, and as per the order passed therein, an Advocate Commissioner was deputed and the physical possession of the property was taken over. After publishing Ext. P2 notice, Ext. P3 notice was issued, followed by the sale conducted on 24.11.2010. The second petitioner turned to be the successful bidder, who was issued Ext. P4 sale certificate. But when the sale certificate was taken for registration before the first respondent, it was refused to be registered, stating that there were some attachments ordered by the Civil Courts, as conveyed by Ext. P5 dated 10.1.2011 which forms the subject matter of challenge in this writ petition.

(2.) The first respondent has filed a counter affidavit pointing out that there was no question of refusal to register the documents, but for giving effect to the attachment ordered by competent Civil Courts and that, Ext. P5 memo was issued pointing out the actual facts and figures with utmost bona fides and in good faith. Respondents 4 and 5 have not chosen to file any counter affidavit presumably for the reason that there may not be any dispute with regard to the factual position.

(3.) Mr. K.K. Chandran Pillai, the learned senior counsel appearing for the petitioners submits that the mortgage was created over the property way back in the year 2001. The attachment was ordered by the Civil Courts only much later, as shown in Ext. P5 communication issued by the first respondent. The first attachment was ordered by the Principal Sub Court, Paravur, in I.A. 4238/07 in O.S. 501/07, while the other attachment is as per order passed by the District Court, Ernakulam, in I. A.2027/09 in O.P. 545/09. It is also stated by the learned senior counsel that the original of the title deed is with the first petitioner/Bank; a copy of which has been produced as Ext. P6. Reliance is also sought to be placed on Ext. P7 judgment passed in similar circumstances, whereby similar sale certificates have been directed to be registered by the concerned authority.