Priority of registered security interest under SARFAESI prevails over later State tax recovery claims and attachments.

A prior security interest registered with CERSAI under SARFAESI takes priority over later State tax recovery claims. Section 26-E gives a secured creditor priority after registration, and Sections 26-B to 26-D treat that registration as constructive public notice. Section 37 of the Maharashtra Value Added Tax Act, 2002 creates a first charge only subject to a Central Act creating priority, so it cannot displace an earlier registered mortgage. Where the mortgage was registered in 2014 and tax attachment steps came later, the later recovery measures could not override the secured creditor's charge; the tax authorities were confined to any residual proceeds after satisfaction of the secured debt.

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Issues: Whether the attachment orders and demand notice issued by the State tax authorities could prevail over a prior security interest registered with CERSAI, and whether the secured creditor was entitled to enforce the mortgaged assets in priority to the tax dues claimed under the Maharashtra Value Added Tax Act, 2002.

Analysis: Section 26-E of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 gives priority to a secured creditor after registration of the security interest, and that priority operates notwithstanding other laws. Sections 26-B to 26-D reinforce the legislative scheme by requiring registration and treating such registration as constructive public notice. Section 37 of the Maharashtra Value Added Tax Act, 2002 itself makes the statutory first charge subject to any Central Act creating first charge, and therefore cannot override the secured creditor's prior registered charge. On the admitted facts, the mortgage was registered with CERSAI in 2014, whereas the tax adjudication and attachment steps came much later. The later tax recovery actions therefore could not displace the earlier registered security interest. The argument that the tax authorities could again proceed against the same asset in the purchaser's hands was rejected as inconsistent with the statutory scheme of priority.

Conclusion: The impugned tax recovery attachments and demand notice could not override the prior registered security interest, and the secured creditor was entitled to enforce the secured assets in priority to the tax authorities.

Final Conclusion: The writ petition succeeded, the secured creditor's priority over the secured assets was affirmed, and the tax authorities were restricted to any residual proceeds after satisfaction of the secured debt.

Ratio Decidendi: A prior security interest registered with CERSAI under the SARFAESI Act has priority over later State tax recovery claims, and a State law creating a first charge must yield where it is expressly subject to a Central Act granting priority to secured creditors.

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