Sale under SARFEASI Act –Vs- Attachment under Chit Funds Act – Priority case

Context :
Mortgage by deposit of title deeds created on 19/02/2010 by executing Memorandum of Deposit and presented for registration on the same day. However, Registration completed on 27/01/2011. On default in repayment of loan, the property sold by secured creditor. But registration refused by Sub-Registrar in view of order of attachment obtained by Chit Fund Company on 25/01/2011

Question :
Whether the attachment order by Arbitrator under Chit Funds Act prohibits sale under SARFEASI Act ?

Answer :
The mortgage was created earlier to order of attachment. Subsequent registration of Memorandum of Deposit of Title deed dates back to the date of execution. Hence sale deed by secured creditor directed to be registered.

Reference :
Punjab National Bank –Vs- The Secretary to Government, Commercial Taxes and Registration Department – W.P.No:16847 of 2015 – Hon’ble Mr.Justice M.M.Sundresh – Order dated 01/10/2015

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