Sundaram Home Finance Ltd vs State Of Kerala

Gopinath P, J

The petitioner is a Housing Finance Institution as defined under the National Housing Bank Act, 1987. The grievance projected by the writ

petitioner is the failure on the part of the 3rd respondent to issue a Record of Rights Certificate under the provisions of the Kerala Record of Rights

Act, 1968.

The petitioner initiated proceedings against in respect of a property having an extent of 4.45 Ares comprised in Re-Survey No.1/43-A/1B situated in

Kodoth Village, Hosdurg Taluk, Kasaragod District under the Provisions of the Securitisation & Reconstruction of Financial Assets & Enforcement of

Security Interest Act, 2002 (hereinafter referred to as the 'SARFAESI' Act for short). On failure to find any bidder in a public auction, the petitioner

entered into a private treaty for sale of the property to one Sathyanadhan. Ext.P2 is the said private treaty. Following Ext.P2, a Sale Certificate

(Ext.P3) was also issued in favour of the aforesaid Sathyanadhan. However, for failure to produce a Record of Right Certificate, the Sale Certificate

could not be registered.

Section 3 of the Kerala Record of Rights Act, 1968 (hereinafter referred to as 'the Act') reads as follows:-

“3. Preparation of record of rights.-

(1) A record of rights shall be prepared by the prescribed officer in the prescribed manner in respect of any area or areas notified by the Government in this behalf

in the Gazette.

(2) The record of rights in respect of any land shall include the following particulars namely:-

(a) the description and extent of the land;

(b) the name and address of the person in occupation of the land;

(c)the names and addresses of other persons interested in the land;

(d) the nature and extent of the respective interest of the persons referred to in clause (b) and (c):

(e) the names and addresses of the kudikidappukars, if any; and

(f) such other particulars as may be prescribed.

(3) The record of rights shall be maintained by such officer as may be prescribed, and different officers may be prescribed for different areas.â€​

A reading of Section 3 of the Act shows that the particulars entered in the Record of Rights includes, among other things, the name and address of

the person in occupation of the land, the names and addresses of other persons interested in the land and the nature and extent of the respective

interest of persons referred to in clause (b) and (c) of Section 3 of the Act. Obviously, a secured creditor initiating action under the provisions of the

SARFAESI Act will not find mention in the Record of Rights. This Court, inJ acob v. Village Officer; 2020 (4) KLT 271 has, following the judgment

in Synudheen v. State of Kerala; 2013 (1) KLT 221, taken the view that as long as the provisions of the Registration Act and the Registration Rules

have not been amended so as to compulsorily insist for production of the certificate under the Act, such requirement cannot be insisted upon by the

registration authorities. Further, a Sale Certificate (for immovable property) issued by the secured creditor under the provisions of the SARFAESI Act

is issued in a statutory form namely, that given in Appendix â€" V of the Security Interest (Enforcement) Rules, 2002. The registering authority

cannot, obviously, refuse to register such a Sale Certificate in statutory form on the ground that a certificate showing Record of Rights in favour of the

secured creditor has not been produced. As already noticed, the provisions of Section 3 of the Act shows that only the name of the owner of the

property and the nature of his interest will be recorded in the Record of Rights. The provisions of the Act and/or the Registration Rules cannot defeat

the rights of the secured creditor.

Accordingly, this writ petition will stand disposed of directing that the 2nd respondent shall forthwith register Ext.P3 Sale Certificate in accordance

with law without insisting upon a Record of Rights Certificate.