ORDER: (Per Hon'ble Sri Justice V. Ramasubramanian) Aggrieved by the refusal of the Sub-Registrar to register a Sale Certificate issued in favour of an auction-purchaser, the Bank has come up with the above writ petition.
2. Heard Mr. N.V. Subba raju, learned counsel for the petitioner and Mr. P. Durga Prasad, learned counsel for the 7threspondent. The learned Government Pleader takes notice for respondent Nos.1 to 3.
3. It appears that respondent Nos.5 and 6 availed a Housing Loan from the petitioner bank and failed to repay the amounts. Therefore, the bank initiated steps under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, by issuing a demand notice on 15.04.2017 under Section 13 (2) followed by a possession notice under Section 13 (4), dated 17.10.2017.
4. An auction was held on 09.01.2018 and a Sale Certificate was issued on 28.03.2018. But, when the Sale Certificate was presented for registration on 11.05.2018 to the 2ndrespondent (Sub- Registrar), he refused to register the same on the ground that the
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property is already under attachment, in I.A. No.20 of 2018 in AACR No.110 of 2017.
5. The petitioner came to know that the borrowers were also members of a Chit Group with the 7threspondent and committed default in payment. Therefore, the 7threspondent raised a dispute under Section 64 (1) of the Chit Fund Act, 1982. In the said dispute, the 3rdrespondent/Arbitrator passed a conditional order of attachment on 03.03.2018.
6. It is clear from the above that the properties were mortgaged to the petitioner bank much before the conditional order of attachment passed by the Arbitrator under the Chit Fund Act, 1982. Therefore, the 7threspondent's claim cannot have priority over the charge that the petitioner has in respect of the properties.
7. The only thing that the 7threspondent can seek is the payment of any surplus, after adjustment of all the dues by the Bank.
8. Therefore, the Writ Petition is disposed of directing the Sub- Registrar, who is 2ndrespondent herein, to register the Sale Certificate. However, if after adjustment of the entire loan amount, any surplus money remains out of the auction sale proceeds, the Bank shall not pay it to the borrowers, but shall pay it to the 7threspondent, after notice to the borrowers. However, in the circumstances of the case, there shall be no order as to costs.
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As a sequel thereto, miscellaneous petitions, if any, pending in the writ petition, shall stand closed.
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V. RAMASUBRAMANIAN, J
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P. KESHAVA RAO, J
June 03, 2019
Mgr