HC Rules Attachment Cannot Override Prior Mortgage; Registration Directed

At the centre of the dispute is IKF Finance Limited, which had lent Rs 8.50 crore against a property back in 2020. When the borrower defaulted, the bank did exactly what the law allows: they took over the property under the SARFAESI Act and sold it to a private buyer.

The buyer paid in full, received their sale certificate in May 2025, and went to the Sub-Registrar to make it official. The Sub-Registrar refused to register the sale because a civil court had “attached” (frozen) the property in late 2022 due to a separate lawsuit. Essentially, the property was on a prohibited list, creating a legal stalemate between the bank’s rights and the court’s order.

Central Issue: Whether a Sub-Registrar can refuse registration of a SARFAESI sale certificate due to a subsequent civil court attachment, despite prior mortgage rights.

HC’s Ruling: This decision from the High Court is a solid win for the “first in time” rule, clearing the path for a property buyer who was stuck in a bureaucratic stalemate. The Court’s logic was simple: because the bank’s mortgage was created long before the civil court ever issued an attachment order, the bank had the “senior” claim. In the eyes of the law, a later court order cannot suddenly jump the queue and block a bank from exercising its rights under the SARFAESI Act.

The mortgage effectively “locked in” the bank’s priority years ago. The Bench reiterated that a Sub-Registrar doesn’t have the authority to act as a judge. They cannot refuse to register a sale just because they see an attachment order on the books, especially when that attachment happened after the mortgage. The court made it clear: the bank’s rights take precedence, and a subsequent freeze on the property doesn’t stop a legal sale.

To Read Full Judgment, Download PDF Given Below