State Bank Of India vs Sub Registrar, Kundara

Gopinath P., J

The petitioner has approached this court being aggrieved by the fact the 1st respondent has refused to register a sale certificate issued by the petitioner under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (In short 'the SARFAESI Act') in respect of the property belonging to respondents 2 and 3 which was brought to sale to recover the amounts due to the respondent bank.

The learned counsel appearing for the petitioner would submit that the 1st respondent had refused to registration on the premise that there was a registered lease deed in respect of the property in favour of the 4th respondent. It is submitted that even going by the terms of the lease deeds (Exts.P8 and P9), the term of the lease has expired as early as on 30-09-2020. It is submitted that in terms of the provisions contained in Section 101 of the Transfer of Property Act, the lease has already been determined by efflux of time. It is submitted that no release deed is required to be executed as it is evident from Ext.P2 Advocate Commission Report filed in proceedings under Section 14 of the SARFAESI Act that the 4th respondent was not in possession or enjoyment of the property on the date on which it was taken over under the provisions of the SARFAESI Act. It is submitted that this writ petition concerns only a portion of the property mentioned as item No.5 in Ext.P1 and it is clear from the reading of Ext.P2 that item No.5 was taken possession by the Advocate Commissioner on 27-01-2021.

The learned Government Pleader would submit that since a registered lease deed constitutes an encumbrance on the property and since the details of the registered lease deed are noted in the encumbrance certificate, the 4th respondent was not in a position to register the sale deed without a release deed being executed in respect of the property in question. However, the learned Government Pleader agrees that a reading of Ext.P2 will suggest that item No.5 in Ext.P1 was taken possession on 27-01-2021 by the Advocate Commissioner appointed by the Chief Judicial Magistrate Court, Kollam. Though notice was issued to the 4th respondent and the notice was served, there is no appearance for the 4th respondent.

The learned counsel appearing for respondents 2 and 3 would submit that they are not disputing the fact that the petitioner is entitled to a registration of the sale certificate issued in respect of the property mentioned as item No.5 to Ext.P1, though the property was leased out initially to the 4th respondent. It is also not disputed that lease had expired by efflux of time.

Having heard the learned counsel appearing for the petitioner, the learned Government Pleader and the learned counsel appearing for respondents 2 and 3, I am of the view that the petitioner is entitled to succeed. The provisions of Section 101 of the Transfer of Property Act clearly indicate that a lease can be determined by efflux of time. The lease in question in this case was created by execution of a registered document and the term of the lease has expired on 30-09-2020. The 4th respondent is clearly not a tenant holding over as it is clear from Ext.P2 report of the Advocate Commissioner appointed by the Chief Judicial Magistrate Court, Kollam in proceedings initiated by the petitioner under Section 14 of the SARFAESI Act. It is clear that the property mentioned in item No.5 of Ext.P1 was taken over on 27-01-2021. There is noting in Ext.P2 to suggest that the said item of property was in the possession of the tenants on that date. The 4th respondent has also not opposed the prayers sought for. Taking all these facts cumulatively into consideration, I am of the view that the 1st respondent is to be directed to register Ex.P5 sale certificate without in any manner being influenced by the fact that Exts.P8 and P9 registered lease deeds were executed in respect of that property. Therefore Ext.P7 is quashed. The 1st  respondent shall register the sale certificate notwithstanding the encumbrances noted on account of Exts.P8 and P9. The 1st respondent is also directed to efface the details of encumbrance created on account of the registration of Exts.P8 and P9 registered lease deeds from the record of encumbrance maintained by him.