Secured creditor priority defeats conflicting state attachment, and territorial jurisdiction lies where a material part of the cause arises.

A State attachment under the Maharashtra protection law could not defeat registration of a sale certificate issued after a secured creditor's auction under the SARFAESI framework. Applying constitutional repugnancy principles and the statutory priority given to secured creditors, the judgment states that secured debt prevails over competing government or attachment claims, so refusal to register the certificate was unsustainable. On territorial jurisdiction, it held that a High Court may entertain a writ where a material part of the cause of action arises within its territory; since the property, auction, and lending branch were located there, the territorial objection failed and registration was directed.

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Issues: (i) Whether the refusal to register the sale certificate on the basis of attachment under the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 could prevail over the auction sale conducted under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (ii) Whether the High Court had territorial jurisdiction to entertain the writ petitions.

Issue (i): Whether the refusal to register the sale certificate on the basis of attachment under the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 could prevail over the auction sale conducted under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

Analysis: The attachment under the State enactment could not override the auction and recovery process under the Central enactment. The judgment applied Article 254 of the Constitution of India to hold that, in case of repugnancy, the Central law prevails. It further relied on the statutory priority given to secured creditors under Section 31B of the Recovery of Debts and Bankruptcy Act, 1993 and Section 35 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 to hold that secured debt enjoys priority over government dues and other claims. The attachment was therefore incapable of defeating the sale certificate issued pursuant to the secured creditor's auction.

Conclusion: The refusal to register the sale certificate was not sustainable, and the petitioners were entitled to registration of the sale certificate.

Issue (ii): Whether the High Court had territorial jurisdiction to entertain the writ petitions.

Analysis: The cause of action arose within the territorial jurisdiction of the High Court because the property was situated in Chandigarh, the auction was held there, and the lending branch was also located there. Applying Article 226(2) of the Constitution of India and Section 20 of the Code of Civil Procedure, 1908, the judgment held that even a part of the cause of action confers jurisdiction on the High Court. The territorial objection was therefore rejected.

Conclusion: The High Court had territorial jurisdiction to hear and decide the writ petitions.

Final Conclusion: The writ petitions succeeded, the impugned orders refusing registration were quashed, and the registering authority was directed to register the sale certificate in accordance with law.

Ratio Decidendi: A secured creditor's statutory right to realise secured assets prevails over a conflicting State attachment and government claims, and a High Court may exercise writ jurisdiction where a material part of the cause of action arises within its territory.

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