Kerala High Court
Robin Joseph Baby vs The District Collector on 23 July, 2021
Author: V Raja Vijayaraghavan
Bench: V Raja Vijayaraghavan
WP(C) NO. 8653 OF 2021 1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V
FRIDAY, THE 23RD DAY OF JULY 2021 / 1ST SRAVANA, 1943
WP(C) NO. 8653 OF 2021
PETITIONER/S:
ROBIN JOSEPH BABY,
AGED 36 YEARS,
S/O. K.BABY, RESIDING AT PALAMOOTTIL HOUSE,
KATTANAM MURI, KATTANAM VILLAGE, PALACKAL P.O,
ALAPPUZHA DISTRICT-690 503.
BY ADV S.SREEKUMAR (KOLLAM)
RESPONDENT/S:
1 THE DISTRICT COLLECTOR,
COLLECTORATE, ALAPPUZHA-688 001.
2 THE TAHASILDAR,
(RR) TALUK OFFICE, MAVELIKKARA, ALAPPUZHA DISTRICT-
690 101.
3 VILLAGE OFFICER,
BHARANIKAVU VILLAGE OFFICE, ALAPPUZHA DISTRICT-690
503.
4 AUTHORISED OFFICER,
BANK OF BARODA, MAVELIKARA BRANCH, ALAPUZHA-690 101
5 THE TAX RECOVERY OFFICER,
RECOVERY CELL, PUBLIC LIBRARY BUILDING, SASTRI
ROAD, KOTTAYAM-686 001.
SMT.K.AMMINIKUTTY,SR GP
BY ADV LEO GEORGE
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON 23.07.2021, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
WP(C) NO. 8653 OF 2021 2
JUDGMENT
By virtue of Ext.P1 sale certificate issued by the 4th respondent in exercise of his powers under Section 13 of the Securitisation And Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('SARFAESI Act' for short) read with Rule 8 and 9 of the Security Interest (Enforcement) Rules, 2002, the petitioner secured title over property having a total extent of 21.97 Ares in Re-survey Nos. 248/7, 348/16, 348/8-4 and 348/14 in Bharanikkavu Village, Alappuzha District.
2. After acquiring title over the property, the petitioner filed an application before the 3rd respondent to effect mutation of property, which came to be rejected by Ext.P2 order for the reason that some revenue proceedings were effected subsequent to the creation of the mortgage. According to the petitioner, as the mortgage was created on 10.03.2014 and the attachment was effected only on 22.03.2019, it would not affect the title and ownership of the property nor would it have any impact on the sale conducted as per the provisions of the SARFAESI Act. On registration of the sale deed, the petitioner again approached the 3rd respondent and mutation of the property was effected by Ext.P5 order. However, the 3rd respondent recorded the liability of the prior owner in the tax receipt, which according to the petitioner is against all tenets of the law. Being aggrieved, the petitioner WP(C) NO. 8653 OF 2021 3 is before this Court seeking the following reliefs:
(i) To issue writ of certiorari or any other appropriate writ, order quashing Ext.P2 order of the 3rd respondent;
(ii) To issue a writ of mandamus, order or direction to the 3rd respondent to remove the liability of the prior owner mentioned in Ext.P5 tax receipt of the petitioner.
3. Sri.S. Sreekumar, the learned counsel appearing for the petitioner submitted that it has been laid down by this Court in a catena of decisions that under Section 26E of the SARFAESI Act, priority in payment has been statutorily created in favour of a secured creditor over all other debts including tax payable to the Central Government or State Government on registration of the security interest. He would further point out that the sale of the property under Ext.P1 sale certificate is free from all encumbrances and the attachments effected subsequent to the mortgage would not affect the title and ownership of the petitioner over the property. Such attachments will have no effect on the sale conducted invoking the provisions of the Act and the same would cease to have any effect the moment the sale is confirmed in favour of the petitioner.
4. I have heard the learned standing counsel appearing for the 4th respondent and the learned Government Pleader.
5. I have considered the submissions advanced and have WP(C) NO. 8653 OF 2021 4 perused the records. Section 26E of the SARFAESI Act grants priority to secured creditors after the registration of the security interest, and the debts due to any secured creditor shall be paid in priority over all other debts, revenues, taxes, cesses and other rates payable to the Central Government or State Government or local authority. The rights and liberties conferred on the creditor/bank by virtue of mortgage created and the right to proceed under the relevant provisions of the SARFAESI Act cannot be defeated because of the subsequent attachments ordered by the Civil Court (see HDFC v. Sub Registry Officer [2011 KHC 851] and Madhan v. Sub Registrar [2014 (1) KLT 406]). In TDB v Deputy Examiner, Local Fund Audit and Others, [2020 (3) KHC 129] a Division Bench of this Court had occasion to observe that the sale carried out either under the SARFAESI Act or under the RDB Act takes precedence even over the statutory charges due to the Government created under KVAT Act or under other State Enactments after the Amendment Act of 2016. A secured creditor in whose favour a security interest has been created thus has priority in sale and payment over all other statutory charge holders. In that view of the matter, the petitioner is entitled to succeed.
This writ petition will stand allowed. It is declared that the attachment effected subsequent to the creation of mortgage on 10.03.2014 shall not affect the title and ownership of the petitioner over WP(C) NO. 8653 OF 2021 5 the property covered under Ext.P1 sale certificate. Consequently, there will be a direction to the 3rd respondent to remove the entries relating to the liability of the previous owner and issue fresh tax receipts to the petitioner in the usual course.
SD/-
RAJA VIJAYARAGHAVAN V JUDGE NS WP(C) NO. 8653 OF 2021 6 APPENDIX OF WP(C) 8653/2021 PETITIONER(S) EXHIBITS :
EXHIBIT P1 A TRUE COPY OF THE SALE CERTIFICATE
BEARING NO. 1445/2020 DATED 11.11.2020
REGISTERED BEFORE THE BHARANIKAVU S.R.O,
ALAPPUZHA.
EXHIBIT P2 TRUE COPY OF THE ORDER DATED 17.11.2020
PASSED BY THE 3RD RESPONDENT, THE VILLAGE
OFFICER, BHARANIKAVU VILLAGE, ALAPPUZHA.
EXHIBIT P3 THE TRUE COPY OF THE LETTER ISSUED BY THE
4TH RESPONDENT BANK DATED 04.12.2020.
EXHIBIT P4 THE TRUE COPY OF THE ORDER OF ATTACHMENT
OF IMMOVABLE PROPERTY ISSUED BY THE TAX
RECOVERY OFFICER DATED 22.03.2019.
EXHIBIT P5 TRUE COPY OF THE TAX RECEIPT ISSUED BY
THE VILLAGE OFFICER, BHARANIKAVU, DATED
15.09.2020, NO.KL04060904534/2020.
RESPONDENT(S) EXHIBITS : NIL