Secured debt prevails over excise recovery claim when the tax law creates no statutory charge over mortgaged assets.

Central excise dues recoverable as arrears of land revenue do not automatically rank ahead of a State Financial Corporation's secured debt. The doctrine of Crown debt applies only against unsecured creditors and yields to a prior mortgage, statutory first charge, or other overriding statutory priority. Section 11 of the Central Excise Act, 1944 is only a recovery mechanism and does not create a charge over mortgaged property. By contrast, the State Financial Corporations Act, 1951 preserves the Corporation's statutory rights under Section 29 through Section 46B, so those rights prevail over inconsistent recovery claims. The Corporation's secured interest therefore takes priority over the Government's excise demand.

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Issues: Whether central excise dues recoverable as arrears of land revenue have priority over the secured debt of the State Financial Corporation under the State Financial Corporations Act, 1951.

Analysis: The claim for priority based on Crown debt applies only against unsecured creditors and yields to a secured debt or a statutory first charge. The Court held that Article 372 preserves only the pre-Constitution common law so far as it is not displaced by statute, and that a statutory provision creating a first charge or conferring priority prevails over the general doctrine of Crown debt. Section 11 of the Central Excise Act, 1944 provides a mode of recovery, but does not create a prior charge over the mortgaged property. The State Financial Corporations Act, 1951 contains a non obstante clause in Section 46B, and the Corporation's rights under Section 29 are statutory rights that prevail over inconsistent claims.

Conclusion: The secured debt of the State Financial Corporation has priority over the central excise dues, and the Revenue cannot claim precedence over the Corporation's mortgage security.

Final Conclusion: The appeals failed because the Corporation's secured interest was held to prevail over the Government's excise recovery claim.

Ratio Decidendi: A general claim of Crown debt does not override a prior secured debt or a statutory first charge, and a recovery provision that merely facilitates collection does not itself create priority over secured interests.

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