Prior mortgage prevails over later attachments, leaving recovery sale purchaser's title free from subsequent encumbrances.

An earlier equitable mortgage prevailed over later attachments made against the same property in recovery proceedings. Because attachments do not create title or override the rights of a prior mortgagee, the statutory recovery sale could pass title free from those later encumbrances. Once the sale was confirmed, the subsequent attachments could not continue to burden the purchaser's title and were liable to be removed from the records.

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Issues: Whether attachments effected after creation of an equitable mortgage could survive the sale of the mortgaged property in recovery proceedings and continue to burden the purchaser's title.

Analysis: The recovery sale was conducted under the statutory recovery mechanism made applicable through Section 29 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, read with the Second Schedule to the Income-tax Act, 1961 and the Income-tax (Certificate Proceedings) Rules, 1962. The mortgage in favour of the bank predated the later attachments. The legal effect of a mortgage as an encumbrance was held to prevail over subsequent attachments, and the principle was applied that attachments do not create title or override the rights arising from an earlier mortgage. Once the sale was confirmed, the later attachments could not continue to affect the purchaser's title and were liable to be removed from the records.

Conclusion: The subsequent attachments did not affect the purchaser's title, and the sale was held to be free of those encumbrances.

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