2015 (7) TMI 1384 - HC - Indian Laws

Vacation of order of attachment - property which the petitioner has purchased in auction under the proceedings under SARFAESI Act - refusal on the part of the Village Officer to effect mutation of the property - attachments were subsequent to the date of mortgage - HELD THAT - The case put forward by the petitioner squarely falls within the law laid down by the learned Single Judge of this Court in Madhan v. Sub Registrar 2014 (1) TMI 1905 - KERALA HIGH COURT where it was held that The preponderance of judicial opinion leads to the irresistible conclusion that the sale of the mortgaged property in favour of the petitioner under Ext.P5 sale certificate under the Act is free of all encumbrances. The attachments effected subsequent to the mortgage created in favour of the bank do not affect the title and ownership of the petitioner over the subject property. Such attachments have no impact on the sale conducted under the Act and the same ceases to have any effect or fall to the ground the moment the sale is confirmed in favour of the petitioner. The appellants are entitled for a similar order - the attachments effected by the Munsiff Court, Thrissur after the date of mortgage are declared invalid and there will be a direction to the Sub Registrar and the Village Officer to efface the attachments effected after 08/07/2008 in their registers. Appeal allowed.

Summary

Issues Involved:
Challenge to judgment directing approach to Munsiff Court for vacating attachment in property purchased under SARFAESI Act, refusal of mutation by Village Officer due to attachments by Munsiff Court in separate suits, contention on validity of attachments post-mortgage date, relief sought for quashing attachment orders, declaration of sale as free of encumbrances, removal of encumbrance entries, direction for mutation, interpretation of law on encumbrances post-sale under SARFAESI Act.

Analysis:
The appeal challenged a judgment directing the petitioners to approach the Munsiff Court for vacating an attachment order on a property purchased under the SARFAESI Act. The petitioners sought relief as the Village Officer refused mutation due to attachments by the Munsiff Court post-mortgage. The main contention was the validity of attachments post the mortgage date, arguing they do not affect the petitioners' title. The petitioners sought various reliefs, including quashing attachment orders and declaring the sale free of encumbrances.

The Single Judge observed that a creditor's right under the law remains unaffected by registry transfer and directed the Village Officer to transfer registry to the petitioners. However, this direction was subject to any decision of a competent Civil Court, and the petitioners were instructed to move the Munsiff Court to lift the attachment. The appellants challenged this judgment, citing a previous case and arguing for a declaration of the petitioners' rights and removal of attachments from records.

The Government Pleader confirmed that all attachments by the Munsiff Court post-mortgage were undisputedly made after the mortgage creation. The Court, in line with a previous judgment, held that the sale under the SARFAESI Act is free of encumbrances, and post-mortgage attachments do not affect the title. Therefore, the Court declared the post-mortgage attachments invalid and directed the Sub Registrar and Village Officer to remove them from records. The appeal was allowed, granting similar relief to the petitioners as in the previous case.

In conclusion, the Court upheld the petitioners' claim, declaring the post-mortgage attachments invalid and ordering their removal from official records. The judgment clarified the impact of attachments on property sales under the SARFAESI Act, ensuring the petitioners' title and ownership rights were protected.