Secured creditor priority over later tax attachment bars refusal to register sale deed from lawful possession.

A prior lawful possession taken by a secured creditor under section 29 of the State Financial Corporations Act, 1951 prevails over a later sales tax attachment. The subsequent attachment cannot defeat the secured creditor's priority in the asset or prevent sale from that possession. On that basis, refusal to register the sale deed solely because of the later attachment was unsustainable, and the registration could not be denied on that ground alone.

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Issues: Whether the sales tax attachment could prevail over the secured creditor's possession and sale of the property under section 29 of the State Financial Corporations Act, 1951, and whether refusal to register the sale deed on that basis was lawful.

Analysis: The property had already been taken possession of by the financial corporation under section 29 of the State Financial Corporations Act, 1951, before the sales tax department attached it. Once the secured creditor had lawfully taken possession, the department's subsequent attachment could not operate against the secured asset. The refusal by the Sub-Registrar to register the document solely on the basis of that attachment was therefore unsustainable.

Conclusion: The attachment did not override the secured creditor's rights, and the refusal to register the sale deed was unjustified.

Ratio Decidendi: Where a secured creditor has already taken possession of property under section 29 of the State Financial Corporations Act, 1951, a later sales tax attachment cannot defeat the secured creditor's priority or prevent registration of a sale deed executed from that possession.

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