CERSAI-registered secured creditor priority prevails over later municipal attachment and supports release of mortgaged property.

A prior registered security interest with CERSAI under the SARFAESI Act gives a secured creditor statutory priority over a later municipal attachment. Where the creditor's charge was registered before the Corporation's action, and the Corporation had not registered its own claim or shown compliance with requirements displacing that priority, the municipal first-charge provision did not prevail on the facts. The secured creditor was therefore entitled to enforcement against the mortgaged properties, and the Corporation had to release and de-seal them to permit execution of the SARFAESI remedy.

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Issues: Whether the petitioner, as a secured creditor with a prior registered security interest with CERSAI, was entitled to priority over the Municipal Corporation's subsequent attachment and sealing of the mortgaged properties, and whether the Corporation was required to release and de-seal the properties to enable execution of the order under the SARFAESI Act.

Analysis: The petitioner had registered its security interest over the subject properties with CERSAI before the Corporation's attachment. The Court applied the settled position that under Section 26C and Section 26E of the SARFAESI Act, a secured creditor with prior registration of its charge is accorded priority over a later attachment, and the later claim or attachment cannot displace that priority. The Court noted that the Corporation had not registered its claim with CERSAI and had not established compliance with the legal requirements that would displace the secured creditor's priority. The reliance placed on the municipal first-charge provision under Section 212 of the Mumbai Municipal Corporation Act was held not to prevail over the SARFAESI regime in the facts of the case.

Conclusion: The petitioner's prior registered security interest prevailed over the Corporation's subsequent attachment, and the Corporation was required to release and de-seal the subject properties.

Ratio Decidendi: A secured creditor whose security interest is registered with CERSAI before a later attachment enjoys statutory priority under the SARFAESI Act, and such priority prevails over a municipal claim of first charge in the absence of earlier registration or other overriding legal compliance.

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