Court directs Registrar to record sale certificate issued to auction purchaser under Recovery of Debts and Bankruptcy Act, 1993, rejecting refusal as illegal and affirming writ jurisdiction despite alternate remedies.
In a significant judgment delivered on September 9, 2026, the Madhya Pradesh High Court (Indore Bench) addressed the legal intricacies surrounding the registration and filing of sale certificates issued by the Recovery Officer of the Debt Recovery Tribunal (DRT) in auction sales of secured properties. The petitioner, M/s Sukh Sagar Agro Industries through its proprietor Mr. Gourav Singhal, challenged the refusal of Punjab National Bank and other respondents to file or register the sale certificate dated August 8, 2025, relating to immovable property at Triveni Avenue, Indore.
The dispute arose after the petitioner, being the successful auction purchaser under the Recovery of Debts and Bankruptcy Act, 1993, sought to have the sale certificate issued by the DRT recorded by the registering authority in Book No. I under Section 89(4) of the Registration Act, 1908. The registering authority declined to file the certificate, contending that such sale certificates were not compulsorily registrable instruments.
The Court, presided by Justice Sandeep N. Bhatt, analyzed the relevant statutory provisions, case law, and the procedural framework governing such sales. Citing precedents including the Supreme Court's ruling in Esjaypee Impex Private Limited v. Canara Bank (2021) and the recent decision in Inspector General of Registration v. G. Madhuambal (2022), the Court observed that while the sale certificate issued by the Recovery Officer is not compulsorily registrable under Section 17(2)(xii) of the Registration Act, a copy of the sale certificate must nevertheless be filed in Book No. I by the registering authority pursuant to Section 89(4).
The Court emphasized that the filing of the sale certificate in Book No. I is a mandatory statutory duty and refusal to do so amounts to illegal action lacking jurisdiction. The Court further clarified that the filing of the sale certificate has the same legal effect as registration and obviates the need for any additional registration process. Importantly, the Court rejected the contention that the petitioner must exhaust alternate remedies before approaching the High Court under Article 226 of the Constitution. It referred to the Supreme Court's guidance in Radha Krishan Industries v. State of H.P. (2021), which holds that writ jurisdiction is not barred merely because alternate remedies exist if the issue concerns illegal refusal by statutory authorities.
Consequently, the Court issued a writ of mandamus directing the respondents to file, register, and record the sale certificate in Book No. I within 15 days. The petition was allowed, and the refusal by Punjab National Bank and the registering authority was declared illegal and without jurisdiction.
This ruling underscores the procedural safeguards for purchasers in DRT auction sales and clarifies the responsibilities of registration authorities in handling sale certificates under the Registration Act and the Recovery of Debts and Bankruptcy Act. It also affirms the High Court's proactive role in ensuring statutory compliance and protecting the rights of auction purchasers without undue procedural hurdles.
Bottom Line:
Registration Act, 1908 - Sale certificate issued by Recovery Officer of Debt Recovery Tribunal in favour of auction purchaser is not compulsorily registrable - Registering authority is required to file copy of such sale certificate in Book No. I under Section 89(4) - Refusal to file/register/record same is illegal - Writ petition under Article 226 maintainable despite alternate remedy.
Statutory provision(s):
Article 226, Constitution of India, 1950; Sections 17(2)(xii), 89(4) of the Registration Act, 1908; Recovery of Debts and Bankruptcy Act, 1993
M/s Sukh Sagar Agro Industries v. Punjab National Bank, (MP)(Indore) : Law Finder Doc Id # 2993468
