Prior secured charges outrank later tax attachments, and relief may be granted to clear sale certificate registration barriers.

Prior mortgages and secured charges held in favour of banks and asset reconstruction companies prevailed over later attachment proceedings initiated by tax authorities, because priority followed the chronology of competing claims and a subsequent attachment could not defeat an earlier security interest. Relief was also not denied where some writ petitions did not expressly challenge the attachment order, since the substantive grievance was that the attachment prevented registration of sale certificates and lifting of the attachment was necessary to grant effective relief. The impugned attachment proceedings were set aside with consequential directions to protect the secured creditors' rights.

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Issues: (i) Whether attachment proceedings initiated by the tax authorities could prevail over prior mortgages and secured charges created in favour of banks and asset reconstruction companies. (ii) Whether the absence of an express challenge to the attachment order in some writ petitions prevented grant of relief directing lifting of attachment and registration of sale certificates.

Issue (i): Whether attachment proceedings initiated by the tax authorities could prevail over prior mortgages and secured charges created in favour of banks and asset reconstruction companies.

Analysis: The properties in the batch of writ petitions were already subject to mortgages or secured interests before the tax department passed the attachment orders. The governing principle applied was that priority is determined by the chronology of competing claims, and where the secured charge and mortgage predate the attachment, the secured creditor's claim prevails. The earlier Division Bench decision relied upon by the Court had already held that attachment orders passed subsequent to the mortgage created in favour of the secured creditor cannot stand against that prior security interest.

Conclusion: The prior mortgages and secured charges prevailed over the subsequent attachment proceedings, which were liable to be quashed.

Issue (ii): Whether the absence of an express challenge to the attachment order in some writ petitions prevented grant of relief directing lifting of attachment and registration of sale certificates.

Analysis: In the petitions seeking mandamus, the substantive grievance was the subsistence of attachment blocking registration of sale certificates. The Court treated the challenge as maintainable because the relief sought necessarily required the attachment to be lifted, and the earlier Division Bench ruling covered the controversy. The absence of a direct challenge to the attachment order was held to be inconsequential in the facts of those cases.

Conclusion: Relief was granted notwithstanding the absence of an express challenge to the attachment order in those petitions.

Final Conclusion: The batch of writ petitions succeeded, and the impugned attachment proceedings were set aside with consequential directions to give effect to the secured creditors' rights.

Ratio Decidendi: Where a mortgage or secured charge is created prior to an attachment by the tax authorities, the prior secured interest has priority and the subsequent attachment cannot defeat it.

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