Registered security interest under SARFAESI prevails over tax attachment, and sale certificate registration cannot be refused on that basis.

A duly registered security interest under the SARFAESI framework takes priority over attachment and recovery claims for income tax dues when the secured asset was mortgaged before the tax attachment and the borrower's account had become non-performing. The court applied Section 26E to hold that the secured creditor's right to realise the secured debt ranks ahead of Government dues in respect of the secured property. It also held that the registering authority cannot refuse to register a sale certificate merely because the property is under departmental attachment where the auction was conducted by the secured creditor and the sale certificate remains unregistered.

---

---

Issues: Whether a secured creditor, whose security interest is registered with CERSAI, has priority over attachment and recovery claims of the Income Tax Department, and whether the registering authority can register the sale certificate notwithstanding such attachment.

Analysis: The property was mortgaged before the tax attachment, the borrower's account had become non-performing, and notice under the SARFAESI Act had been issued. Since the security interest was registered, the secured creditor was entitled to the statutory priority under Section 26E of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The existing Full Bench authority was followed to hold that the rights of secured creditors to realise secured debts rank in priority over Government dues, including income tax dues. It was further held that, where the secured creditor conducts the auction and the sale certificate remains unregistered, the registering authority cannot refuse registration merely because of the departmental attachment.

Conclusion: The secured creditor's claim had priority over the Income Tax Department's attachment, and the sale certificate could be registered notwithstanding that attachment.

Final Conclusion: The writ petition succeeded, and the departmental attachment did not prevail over the secured creditor's rights in the mortgaged property.

Ratio Decidendi: A duly registered secured interest under the SARFAESI framework prevails over tax recovery attachments, and statutory priority under Section 26E overrides competing Government dues in respect of the secured asset.

---