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Judgment
(PER : Rajnish R. Vyas)
Heard Mr. M.G. Bhangde, learned Senior Counsel a/b Mr. S.D. Ingole, for petitioner, Mr. A.P. Prasad, learned Counsel for respondent Nos.3 and 5 to 11 and Mrs. Mayuri Deshmukh, learned AGP for respondent Nos. 1 and 2/State.
A question which falls for consideration in this petition is no more res integra in view of various judgments delivered by Coordinate Bench of this Court and therefore, facts are narrated in brief.
The question is whether secured creditor i.e. the petitioner will have priority as a secured creditor or the respondent No. 2 i.e. Deputy Commissioner of State Tax (Adm), Sales Tax Office, Chandrapur, District Chandrapur?.
Before adverting to the facts, the relevant portion of judgment, passed in Writ Petition No. 12724/2024, by this Court at Bombay on 22.7.2024, is reproduced below:
“28.In view of the clear position of law under Section 26-E of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 and further the ratio as laid down by the Full Bench of this Court in Jalgaon Janta Sahakari Bank Limited and Another Vs. Joint Commissioner of Sales Tax (Nodal 9) Mumbai, reported in 2022(5) Mh.L.J. 691 and the judgment of Division Bench of this Court in Indian Bank through Chief Manage Vs. State of Maharashtra and Others (CWP No. 962/2023), decided on 16.7.2024, we have no hesitation to held that a claim of secured creditor i.e. the petitioner bank, will have preference over the claim of respondent (GST Department and the Sales Tax Department)”.
Having considered the position of law, the facts of present case can be applied accordingly, which are as under:
Petitioner bank/secured creditor had extended credit facility to respondent Nos. 3 to 11, to the extent of 12,00,00,000/-, by way of sanctioned letter dated 25.5.2016. Respondent No. 3 to 11 executed equitable mortgage deed on 16.6.2016 mortgaging their immovable properties. The petitioner bank had registered its charges regarding creation of security interest over the mortgaged properties with Central Registry, as per provisions of SARFAESI Act on 30.10.2017 (document No. Annexure P/4, page No. 53).
As default was committed by the borrowers in repayment, loan account of respondent No. 3 was classified as ‘non performing asset’ on 25.12.2017, which resulted into taking recourse to Section 13-2 and finally to Section 14 of the SARFAESI Act. An application for taking possession was allowed by the Chief Judicial Magistrate, Chandrapur, on 23.9.2022 and thereafter, the possession of property was taken on 7.5.2024. On 13.8.2024, E-auction as well as notice was issued and auction was conducted on 29.8.2014. Thereafter, proceedings under Section 19(2) of the Recovery of Debts and Bankruptcy Act, 1993, was filed by the bank before the Debts Recovery Tribunal, which was registered as Original Application No. 103/2020. Even respondent No. 3 had filed Securatization Appeal before the tribunal bearing No. 96/2019. It is at this stage, respondent No. 2 appeared in Securitisation Appeal No. 96/2019, and filed an application for intervention alleging that they have initiated proceedings for recovery of sales tax dues against respondent No. 2 and claimed that they have already initiated proceedings under the provisions of the Maharashtra Value Added Tax, 2002 and also claimed the first charge over the mortgaged properties. According to respondent No. 2, it has the first charge over the subject properties and therefore, the petitioner cannot claim higher right than respondent No. 2.
Be that as it may, since the security interest was registered by the petitioner bank as stated above, with Central Registry, on 30.10.2017, and in view of the position of law stated in opening paragraph, which position is also not disputed by the appearing counsels, we are of the opinion that there is no hurdle in allowing the petition. The petition is consequently allowed and disposed of.
The petition is allowed in terms of prayer clause 1.
ii) It is declared that petitioner bank as a secured creditor will have preference over the claim of respondent No. 2 Deputy Commissioner of State Tax (ADM), Sales Tax Office, Chandrapur,.
iii) Needless to mention that respondent No. 2 would be free to take such steps as it may deem fit against the defaulter for recovery of their dues, as per law.