Income Tax Dues Pending against Borrowers not a Bar for Property Registration Purchased in Auction of Bank : Karnataka HC [Read More]

The Karnataka High Court recently ruled that pending income tax dues against borrowers do not hinder the registration of properties purchased in auctions conducted by banks, specifically Canara Bank in this case. \r

Justice M. Nagaprasanna directed the Sub-Registrar to immediately register the sale certificate presented by the petitioner upon notification of the court order, emphasizing no delays. The court criticized the Sub-Registrar's refusal, stressing adherence to Rule 171 of the Karnataka Registration Rules and relevant legal precedents. \r

The property in question, auctioned due to loan default, was legally acquired by the petitioner, who fulfilled all obligations. The court highlighted the supremacy of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) over conflicting laws, reinforcing the rights of secured creditors. \r

The State Government was instructed to issue a circular to all Sub-Registrars aligning with this decision, ensuring uniform application statewide within eight weeks.