APHC010365662024 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) 0? THURSDAY, THE THIRTY FIRST DAY OF JULY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE SUBBA REDDY SATTI WRIT PETITION NO: 18533 OF 2024 Between: Union Bank of India, Gudivada Branch, Opp More Super Market, Eluru Road, Gudivada, Krishna District, A.P. - 521 301 Represented by its Authorized Officer. ...Petitioner AND 1. The State of Andhra Pradesh, Represented by its Principal Secretary Department of Revenue, Stamps and Registration, Velagapudi, Guntur District, A.P. 2. Director and Inspector General of Registration and Stamps, D. No. 5/59, R.K. Spring Valley Apartments, Mandal, Edupugallu, Kankipadu, Andhra Pradesh -521151. 3. The District Registrar of Assurances, District Registrar Office, Panta Kaluva Road, Maruti Colony, Patamata, Benz Circle, Vijayawada, Andhra Pradesh 520008 4. The Sub Registrar of Assurances, Sub registrar Office, Gudivada , Krishna District 5. Smt Vadlamudi Parvathi, W/o Ranga Rao Proprietrix M/s. Tarni Sarees, R/o D. No. 5/24, Janardhanapuram, Nandivada Mandal, Gudivada - 521 321 Puttalamma Temple Street, 6. M/s Lingamallu Silks, Represented by its Proprietor L.V. Sailesh Kumar, S/o Krishna Murthy, Shop No. 171 AND 172, Krishnaveni Cloth Market, Vijayawada - 1 ...Respondents Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a Writ or order or direction more particularly one in the nature of Writ of Mandamus declaring the inaction and refusal on the part of the Respondent No. 4 in removing the property i.e.. All that the piece and parcel of land and building Residential Door No. 5/24, R.S. No. 17/2A situated at Janardhanapuram, Nandivada Mandal, Gudivada SRO, Krishna District from prohibited property list and register the sale certificate/s being issued Petitioner in favour of the auction purchaser/s under SARFAESI Act arbitrary, illegal, capricious and violative of principles of natural justice against the provisions of SARFAESI Act, 2002 and the Rules framed by the as and there under and consequently direct the Respondent No. 4 to remove the above said property from the prohibited list and allow registration of Sale Certificate/s being executed by the Petitioner Bank under SARFAESI Act. lA NO: 1 OF 2024 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct the Respondent No. 4 to remove the above said property i.e.. All that the piece and parcel of land and building Residential Door No. 5/^4 17/2A situated at Janardhanapuram, Krishna District from the prohibited list and allow R.S. No. Nandivada Mandal, Gudivada SRO, registration of Sale Certificate/s being executed by the Petitioner Bank under SARFAESI Act, pending disposal of the above Writ Petition. > f ! Counsel for the Petitioner: SMT. V DYUMANL, Counsel for the Respondent Nos. 1 to 4: GP FOR REGISTRATION AND STAMPS i i Counsel for the Respondent Nos. 5 & 6: — The Court made the following order: APHC010365662024 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3331] mi THURSDAY, THE THIRTY FIRST DAY OF JULY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE SUBBA REDDY SATTI WRIT PETITION NO: 18533/2024 Between: 1.UNION BANK OF INDIA, GUDIVADA BRANCH, OPP MORE SUPER MARKET, ELURU ROAD, GUDIVADA, KRISHNA DISTRICT, A.P. - 521 301 REPRESENTED BY ITS AUTHORIZED OFFICE ...PETITIONER AND 1.THE STATE OF ANDHRA PRADESH, REPRESENTED BY ITS DEPARTMENT OF REVENUE, VELAGAPUDI, GUNTUR PRINCIPAL SECRETARY STAMPS AND REGISTRATION DISTRICT, A.P. 2.DIRECTOR AND INSPECTOR GENERAL OF REGISTRATION AND STAMPS, D. NO. 5/59, R.K. SPRING VALLEY APARTMENTS, MANDAL, EDUPUGALLU, KANKIPADU, ANDHRA PRADESH -521151. 3.THE DISTRICT REGISTRAR OF ASSURANCES, DISTRICT REGISTRAR OFFICE, PANTA KALUVA ROAD, COLONY, PATAMATA, BENZ CIRCLE, VIJAYAWADA, ANDHRA PRADESH 520008 MARUTI 4.THE SUB REGISTRAR OF ASSURANCES, SUB REGISTRAR OFFICE, GUDIVADA , KRISHNA DISTRICT 5.SMT VADLAMUDI PARVATHI, W/0 RANGA RAO PROPRIETRIX M/S. TARNI SAREES, R/0 D. NO. 5/24, PUTTALAMMA TEMPLE STREET, GUDIVADA- 521 321 6.M/S LINGAMALLU SILKS, REPRESENTED BY ITS PROPRIETOR L.V. SAILESH KUMAR, S/0 KRISHNA MURTHY, SHOP NO. 171 AND 172, KRISHNAVENI CLOTH MARKET, VIJAYAWADA - 1 JANARDHANAPURAM, NANDIVADA MANDAL ...RESPONDENT(S): Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a Writ or order or direction more particularly in the nature of Writ of Mandamus declaring the inaction and refusal the part of the Respondent No. 4 in removing the property i.e.. All that the piece and parcel of land and building Residential Door No. 5/24, R.S. No. 17/2A situated at Janardhanapuram, Nandivada Mandal, Gudivada SRO, Krishna District from prohibited property list and register the sale certificate/s being issued one on by the Petitioner in favour of the auction purchaser/s under SARFAESI Act as arbitrary, illegal, capricious and violative of principles of natural justice and against the provisions of SARFAESI Act, 2002 and the Rules framed there under and consequently direct the Respondent No. 4 to remove the above said property from the prohibited list and allow registration of Sale Certificate/s being executed by the Petitioner Bank under SARFAESI Act and pass lA NO: 1 OF 2024 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct the Respondent No.4 to remove the above said property i.e.. Alt that the piece and parcel of land and building Residential Door No. 5/24, R.S. No. 17/2A situated at Janardhanapuram, Nandivada Mandal, Gudivada SRO, Krishna District from the prohibited list and allow registration of Sale Certificate/s being executed by the Petitioner Bank under SARFAESI Act, pending disposal of the above Writ Petition and pass lA NO: 2 OF 2024 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to order for service of notice on Respondent No. 5 by substituted service by way of paper publication in any local news paper and pass Counsel for the Petitioner: 1.VDYUMANI Counsel for the Respondent(S): 1.GP FOR REGISTRATION AND STAMPS The Court made the following: ORDER Heard Sri K.M.Kishore, learned counsel representing Smt.V.Dyumani, learned counsel for the petitioners, Sri G.Divya Theja, learned Assistant Government Pleader for Stamps & Registration for the respondents 1 to 4. 2. The petitioner, a financial institution, filed the above writ petition to declare the inaction of 4'^ respondent in keeping the building bearing D.No.5/24, R.S.N0.17/2A situated at Janardhanapuram, Nandivada Mandal, Krishna District, in the list of prohibited properties and not registering the sale certificate issued by the petitioner in favour of the auction purchaser, as illegal and arbitrary. a) Averments in the affidavit, in brief, are that the 5**^ respondent availed a credit facility from the petitioner and offered the building bearing D.No.5/24, R.S.N0.17/2A situated at Janardhanapuram, Nandivada Mandal, Krishna District as security. The 5*^ respondent created a ^mortgage by depositing the title deeds vide registered memorandum of 3. deposit of title deed Nos. 6277 of 2014 dated 14.11.2014; 5867 of 2014 dated 28.10.2014; 659 of 2017 dated 22.02.2017 and 16 of 2018 dated 02.01.2018. b) The borrower committed a default and was declared as NPA, and the proceedings under the SARFAESI Act were initiated. The auction was conducted on 29.05.2024, and it was knocked down for Rs.25,75,500/- in favour of Koganti Atchyuta Ramarao and Tummala Satya Kumari. After receiving the entire bid price, the petitioner issued a sale certificate dated 07.06.2024 in favour of the auction purchasers. c) The auction purchaser visited the 4*^ respondent to ascertain the stamp duty and registration fee payable on the certificate of sale. The 4 respondent informed about keeping the property in the list of prohibited properties because of the attachment order passed in O.S.No.2189 of 2021 on the file of the I Additional Junior Civil Judge, Vijayawada, filed by the 6^'^ respondent. th d) The 6*^ respondent filed suit O.S.No.2189 of 2021 on the file of the I Additional Junior Civil Judge, Vijayawada, for recovery of the amount and an attachment order was passed on 21.12.2021. Thereafter, the said suit was decreed on 14.06.2022. The 6*^ respondent filed E.P.No.40 of 2023 for execution of the decree and filed E.A.No.140 of 2023 seeking attachment of excess sale proceeds, if any, lying with the petitioner bank. The Principal Junior Civil Judge, Gudiwada vide order dated 06.09.2023, ordered attachment of excess sale proceeds, if any, lying with the petitioner-bank, after adjustment of the loan amount. Learned counsel for the petitioner would submit that the 5'*^ respondent, even before the attachment of the property in the civil suit. 4. mortgaged the property vide registered memorandum of deposit of title deeds referred to supra with the petitioner-bank. Thereafter, the order of attachment, referred to supra, was passed. Keeping the subject property in the list of prohibited properties is impermissible. Learned Assistant Government Pleader for Stamps & Registration, would submit that due to the attachment order passed in the suit filed by the 6'*^ respondent against the 5*^ respondent vide O.S.No.2189 of 2021, the property was kept in the list of prohibited properties. 5. 6. Now, the point for consideration is: Whether the writ petitioner is entitled to the relief? An attachment before judgment, either under Order XXXVIII Rule 5 and 10 or Order XXI Rule 54 secures the interest of the plaintiff or the decree holder, preventing the defendant or judgment debtor from transferring the property. The attachment of property, per se, will not create any right in the property. Its object is to prevent the defendant’s attempt to defeat a prospective decree and a sort of guarantee against the decree becoming infructuous. 7. 8. Whereas, a mortgage under Section 58 of the Transfer of Property Act is concerned, it is a transfer of an interest over the specific immovable property for the loan repayment. Thus, the mortgage gives the lender a security interest in the property. Unlike a sale, the complete ownership will not be transferred in a mortgage. 9. When the mortgage was subsisting, a suit was filed, and therein an attachment before judgment order was passed by the Civil Court. The attachment effected after the mortgage was created in favour of the bank does not affect the rights of the secured creditor over the subject property. The Division Bench of the composite High Court of Andhra Pradesh in City Union Bank Ltd. Vs. Sub-Registrar, Peddapalli and Ors.', considered the identical issue and held in Paragraphs-14 and 15 as follows: 10. 14. The preponderance of judicial opinion leads to the irresistible conclusion that the sale of the mortgaged property in favour of the auction purchaser and the sale certificate under the SARFAESI Act in such circumstances is free of all encumbrances. The attachments effected subsequent to the mortgage created in favour of the bank do not affect the rights of the secured creditor 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 same is confirmed in favour of the secured creditor Bank and auction purchaser. Otherwise, those attachments would remain as a permanent taboo prejudicially affecting the marketability and title to the property even though they ceased to have any legal efficacy and thereby it becomes necessary to register the sale certificate. Taking into account all these aspects and reckoning the law in the subject as discussed above, this Court has no hesitation to hold that the secured creditor is entitled to succeed in these writ petitions. The writ petitions are accordingly allowed directing the first respondent in both the writ petitions to register the sale certificates in accordance with the Registration Act.” 15. 2018 (6) ALD 16 ; 2018 (5) ALT 279 (DB) Case at hand, the property was mortgaged by 5^'^ respondent vide registered memorandum of deposit of title deed Nos.6277 of 2014 dated 14.11.2014; 5867 of 2014 dated 28.10.2014; 659 of 2017 dated 22.02.2017 and 16 of 2018 dated 02.01.2018 with the petitioner-bank and the order of attachment, in the suit, by the civil court, is after the mortgage executed by the 5'^ respondent in favour of petitioner-bank. The ratio laid down in the judgment referred to supra is squarely applicable to the facts of this case. 11. Given the facts and circumstances of the case, the Writ Petition is Allowed, directing the 4‘^ respondent to delete the subject property i.e. building bearing D.No.5/24, R.S.No.17/2A situated at Janardhanapuram, Nandivada Mandal, Krishna District, from the list of prohibited properties respondent shall receive and process the sale certificate dated 07.06.2024 issued by the petitioner-bank, strictly per the Registration Act, 1908. No order as to costs. 12. th forthwith. The 4 As a sequel, pending miscellaneous petitions, if any, shall stand closed. Sd/- M. PRABHAKAR RAO ASSISTANT REGISTRAR //TRUE COPY// SECTION OFFICER To, 1. The Principal Secretary, Department of Revenue, Stamps and Registration, Velagapudi, Guntur District, A.P. 2. The Director and Inspector General of Registration and Stamps, D. No. 5/59, R.K. Spring Valley Apartments, Mandal, Edupugallu, Kankipadu, Andhra Pradesh -521151. 3. The District Registrar of Assurances, District Registrar Office, Panta Kaluva Road, Maruti Colony, Patamata, Benz Circle, Vijayawada, Andhra Pradesh 520008 i 4. The Sub Registrar of Assurances, Sub registrar Office, Gudivada Krishna District . 5. One CC to Smt. V Dyumani, Advocate [OPUC] 6. Two CCs to GP for Registration and Stamps, High Court of Andhra Pradesh [OUT] 7. Two CD Copies 1 > / TF y .p HIGH COURT DATED:31/07/2025 ORDER WP NO. 18533 OF 2024 ALLOWING THE W.P. WITHOUT COSTS