Prior secured creditor rights prevail over later state attachment, and refusal to register a SARFAESI sale deed was unsustainable.

A secured creditor's prior mortgage and security interest, created by deposit of title deeds in 2013, prevailed over the State's later 2018 attachment and revenue entry because no statutory first charge existed in favour of the State for the dues concerned. The judgment applied the SARFAESI framework and its overriding effect to hold that a secured creditor's right to realise its debt ranks ahead of competing revenue claims. On that basis, the Sub-Registrar could not refuse registration of the SARFAESI sale deed issued after e-auction, and the later revenue charge could not defeat the earlier secured interest.

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Issues: Whether the secured creditor's prior mortgage and security interest had priority over the State's later attachment and revenue charge, and whether the Sub-Registrar could refuse registration of the SARFAESI sale deed on that basis.

Analysis: The charge in favour of the bank arose in 2013 on deposit of title deeds, whereas the State's attachment and revenue entry were created only in 2018. In the absence of any statutory first charge in favour of the State for the dues in question, the later administrative rapat entry could not defeat the earlier secured interest. The judgment relied on the priority accorded to secured creditors under the SARFAESI framework, including the overriding effect of the Act and the principle that a secured creditor's right to realise its debt prevails over competing revenue claims. The later attachment therefore could not justify refusal to register the sale deed issued pursuant to the e-auction.

Conclusion: The secured creditor's prior charge prevailed over the State's subsequent dues and attachment, and the refusal to register the sale deed was not sustainable.

Final Conclusion: Relief was granted to protect the earlier secured interest, direct registration of the auction sale deed, and set aside the later revenue charge, while leaving the State free to pursue its dues after satisfaction of the secured debt in accordance with law.

Ratio Decidendi: A later governmental attachment or revenue entry cannot override an earlier created security interest of a secured creditor, and the secured creditor's prior right to enforce its security prevails in the absence of a statutory first charge in favour of the State.

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