K. Kannan, J. - (1.) CM No. 14345 of 2014.
(2.) ANY attempt to stall registration of sale when the property is sold by a Bank under SARFAESI will be wholly legally untenable. The application is now at the instance of a third party who claims to have filed a suit for specific performance against the debtor from the bank and seeks to contend that the sale proceedings are null and void and, therefore, he must also be heard. There can be no interdict against the sale or registration at the instance of a person who was not a parry to the loan transaction. If he holds an agreement and has filed a suit for specific performance and obtains a decree that the sale proceedings taken by the Bank was illegal, the sale obtained at the auction and registered through the court order will fall to ground as a necessary consequence thereof. However, there can be no presumption that a person who holds property from the borrower from the Bank had any pre -existing right superior to a bank which holds the security when the latter seeks to enforce the security by resort to the provisions under SARFAESI Act of 2002. The application for impleadment is dismissed. Civil Writ Petition No. 14924 of 2014 Short reply by way of counter affidavit filed on behalf of respondents 1 to 3 is taken on record.
(3.) THE counsel for the State points out to the fact that the petitioner had sought for registration of the sale before the court where the suit for specific performance is pending but the court dismissed it holding that the validity or otherwise of the sale proceedings will be decided after taking evidence and, therefore, the directions for registration cannot be issued. I cannot take any order issued by the subordinate court to result in a situation that an auction purchaser under SARFAESI Act could lose his right to seek for registration before this court. There can be no power for the Registrar to refuse registration on any ground other than what is prescribed under Sections 71 and 72 of the Registration Act If the holder of an agreement has a case to contend that the sale proceedings are invalid, it is clarified that the registration of the sale in favour of the petitioner will always be subject to the outcome of a civil court decree on the validity of the sale. The registration which is directed to be done through the court order has nothing to do with the issue of whether the sale effected conforms to the provisions of SARFAESI and whether the applicant -3rd party had any superior right over the bank that holds the security from the original owner of the property and the rights of the auction purchaser claiming under the rights of the bank to put the security for auction. The writ petition is allowed and the State is directed to register the document presented before it in accordance with law.;