1987 (11) TMI 345 - HC - VAT and Sales Tax

Bank awarded Rs. 7,08,040.51 in vehicle security dispute. Respondent No. 1 to pay Rs. 7,28,554.76.

The court ordered the petitioner-bank to receive Rs. 7,08,040.51 and respondent No. 1 to receive Rs. 7,28,554.76 in a dispute over amounts withdrawn by ... Rights of pledgee upon sale of pledged goods - distribution of sale proceeds between secured creditor and revenue - priority of charge over pledged vehicles - public authority claim to attachment proceedsRights of pledgee upon sale of pledged goods - distribution of sale proceeds between secured creditor and revenue - Entitlement to proceeds of sale of vehicles attached and sold; allocation between the petitioner-bank and the Commissioner of Sales Tax. - HELD THAT: - The petitioner-bank asserted that the cars and other vehicles pledged as security for an overdraft became its property and therefore it was entitled to the entire sale proceeds with interest. The Commissioner of Sales Tax had a rival claim in respect of sales tax dues and had caused attachment and sale of certain vehicles, the sale proceeds being deposited with the bank. Balancing the competing claims and in the interest of justice, the Court directed a division of the available amount: Rs. 7,08,040.51 to the petitioner-bank and the balance, Rs. 7,28,554.76, to the Commissioner of Sales Tax. The Court recognised the bank's secured interest but did not accede to the bank's claim to the entire amount, and instead allocated the funds between the parties as ordered.The petitioner-bank is entitled to Rs. 7,08,040.51 and the balance of Rs. 7,28,554.76 shall go to the Commissioner of Sales Tax.Public authority claim to attachment proceeds - Mode and timing of payment of the allocated shares and treatment of the fixed deposit receipt (F.D.R.) held by the Commissioner. - HELD THAT: - The sum awarded to the petitioner-bank is invested in an F.D.R. which is held by the Commissioner and is stated to mature in January 1988. The Court directed that the Commissioner shall surrender the F.D.R. to the bank after its maturity and, within one week of presentation, pay the entire amount of Rs. 7,28,554.76 to the Commissioner of Sales Tax. The petitioner-bank was directed to pay interest accrued on the portion payable to the Commissioner from the date of the order until actual payment. These directions implement the division of proceeds and provide a timetable and interest adjustment to effect the transfer.The F.D.R. held by the Commissioner shall be surrendered to the bank on maturity and, within one week of presentation, the bank shall pay Rs. 7,28,554.76 to the Commissioner, together with interest from the date of the order until actual payment.Disposal of writ petition - Final disposition of the writ petition and costs. - HELD THAT: - Having allocated the sale proceeds and given directions for payment and interest, the Court disposed of the civil writ petition. The Court did not award any costs to either party.The writ petition is disposed of; there will be no order as to costs.Final Conclusion: The Court divided the sale proceeds of the pledged vehicles between the petitioner-bank and the Commissioner of Sales Tax, directed surrender of the F.D.R. on maturity and payment of the Commissioner's share within one week of presentation, required the bank to pay interest on the Commissioner's share until payment, disposed of the writ petition, and ordered no costs. The petitioner-bank and respondent No. 1 had a dispute over the amount withdrawn by respondents 4 to 7 using vehicles as security. The court ordered the bank to receive Rs. 7,08,040.51 and respondent No. 1 to receive Rs. 7,28,554.76. The bank will receive the amount from a maturing F.D.R. held by respondent No. 1, who must pay the balance within a week. Interest will be paid by the bank until the full amount is settled. No costs were awarded.