Bank can sell guarantors' properties in insolvency, despite tax orders. Sub-Registrars to register deeds.

The court held that properties of third-party guarantors, not part of the insolvency proceedings, can be sold by the bank despite attachment orders by the Tax Recovery Officer. Sub-Registrars were directed to register the sale deeds of third-party guarantors' properties outside the Insolvency and Bankruptcy Code's purview, dismissing any pending miscellaneous petitions in the writ petition.

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Issues:
Challenge to orders of attachment by Tax Recovery Officer and Enforcement Directorate on properties forming security interest, Priority of charge between petitioner bank and Tax Recovery Officer, Jurisdiction of National Company Law Tribunal versus Securitization Act in property sales.

Analysis:
1) The State Bank of India filed a writ petition challenging attachment orders by Tax Recovery Officer and Enforcement Directorate on properties forming security interest. The loan accounts of the borrower company became non-performing assets, leading to initiation of measures under the Securitization Act.

2) The petitioner bank sought relief against attachment orders, with legal counsels representing all parties presenting arguments before the court. The borrower company initiated Corporate Insolvency Resolution Process, resulting in a liquidation order by the National Company Law Tribunal.

3) The petitioner bank's mortgage was created before the Tax Recovery Officer's attachment orders, invoking Section 281 of the Income Tax Act for priority. However, a previous judgment clarified that transactions during assessment proceedings do not automatically become void under Section 281.

4) The Income Tax Department argued that questions of priority should be raised before the Official Liquidator under the Insolvency and Bankruptcy Code, as the Code's provisions may take precedence. However, the court differentiated between properties of the borrower company and third-party guarantors in terms of sale under the Securitization Act.

5) The court held that properties of third-party guarantors, not part of the insolvency proceedings, can be sold by the bank despite attachment orders by the Tax Recovery Officer. The Sub-Registrars were directed to register the sale deeds of third-party guarantors' properties outside the Insolvency and Bankruptcy Code's purview, dismissing any pending miscellaneous petitions in the writ petition.

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