DRT Sale Certificate Does Not Require Compulsory Registration: Madhya Pradesh High Court

The Madhya Pradesh High Court has held that a sale certificate issued in favour of a successful auction purchaser in proceedings before the Debt Recovery Tribunal (DRT) does not require compulsory registration.

A Single-Judge Bench comprising Justice Sandeep N. Bhatt allowed Sukh Sagar Agro Industries' petition challenging the refusal to file/record its sale certificate in Book No. I.

Sukh Sagar Agro had purchased the property in an auction conducted by the Recovery Officer, DRT-Jabalpur, who subsequently issued the sale certificate in its favour. It contended that although the sale certificate had been issued in its favour by the DRT, the Registrar had refused to record it by making an entry in Book No. I.

It relied on the Supreme Court's rulings in Esjaypee Impex Private Limited v. Assistant General Manager and Authorised Officer, Canara Bank, Inspector General of Registration v. G. Madhuambal and State of Punjab v. Ferrous Alloy Forgoings P. Ltd.

The Court observed that Esjaypee Impex held that Section 17(2)(xii) read with Section 89(4) of the Registration Act requires the authorised officer to hand over the duly validated sale certificate to the auction purchaser and forward a copy to the registering authority to be filed in Book No. I.

It referred to G. Madhuambal and Ferrous Alloy Forgoings, wherein the Supreme Court clarified that a sale certificate is not compulsorily registrable and that mere filing under Section 89(4) is sufficient.

Further, the Bench noted that although the judgments relied upon by the petitioner concerned proceedings under the SARFAESI Act, the present case also involved a sale certificate issued after the Recovery Officer conducted an auction of secured property pursuant to proceedings before the DRT.

Accordingly, the High Court held that no further compulsory registration was required and directed the authorities to file/record the sale certificate in Book No. I under Section 89(4) of the Registration Act.