TaxTMI 
TaxTMI 
2014 (8) TMI 694
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....6, being Directors in the said company, executed various documents for availing the credit facilities. The credit facilities was in relation to stock, cash credit, term loan, etc. For the aforesaid purposes, respondent nos.2 to 6 executed agreement for loan dated 2nd August, 2007. An agreement for hypothecation of goods and assets was also executed on 2nd August, 2007. The machineries was also placed in favour of the petitioner bank. Respondent nos.3, 4, 5 and 6 also executed deed of guarantee in favour of the petitioner bank. From the documents so executed the land, building, fixed assets have been mortgaged/charged/hypothecated with the petitioner bank for the purpose of availing credit facilities. Respondent no.2-company defaulted in ....
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....d also any property in the name of respondent no.2-company should not be brought/sold/leased/transferred by the petitioner without the permission of the Assistant Commissioner of Central Excise, Division Allahabad. The petitioner, being aggrieved by this restraint order issued by the Assistant Commissioner, Central Excise, Allahabad dated 20th July, 2010, has filed the present writ petition for its quashing. We have heard Sri Satish Chaturvedi, the learned counsel for the petitioner-bank, Sri Shailendra Jaiswal holding brief of Sri Vinod Kant Srivastava, the learned counsel for the Central Excise department-respondent no.1 and Sri B.C. Rai, the learned counsel appearing for respondent nos.2 to 6. The learned counsel for the petitioner....
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....abhai Prabhudas Parekh & Co., 2000 (5) SCC 694, the Supreme Court held: "However, the Crown's preferential right to recovery of debts over other creditors is confined to ordinary or unsecured creditors. The commons law of England or the principles of equity and good conscience (as applicable to India) do not accord the Crown a preferential right for recovery of its debts over mortgaged or pledged of goods or a secured creditor." Considering the said decision, a Division Bench of this Court in State Bank of India Vs. State of U.P. and another, 2003 (1) UPLBEC 328 held that since there was no statutory provision giving priority to the State Government dues over the debts owed to the State Bank, who is a secured creditor, the recover....
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....ecurity Interest Act, 2002 clearly provided a provision for recovery of the amount to a secured creditor, who had the first charge. In M/s Rana Girders Ltd. Vs. Union of India and others, JT 2013 (11) SC 226, the Supreme Court held that by virtue of deed of mortgage the U.P. Financial Corporation, being a secured creditor had priority in respect of its dues over the recovery of the dues of the Central Excise department. Before proceeding further, it would be essential to refer certain provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002: Chapter I of the SARFAESI Act "2. Definitions: 2(zd) "secured creditor' means any bank or financial institution or any co....
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.... the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset; (b) .... (c) appoint any person (hereafter referred to as the manager), to manage the secured assets the possession of which has been taken over by the secured creditor; (5) .... (6) .... (7) Where any action has been taken against a borrower under the provisions of sub-section (4), all costs, charges and expenses which, in the opinion of the secured creditor, have been properly incurred by him or any expenses incidental thereto, shall be recoverable from the borrower and the money which is received by the secured creditor shall, in the absence of any contract to the contrary, be held by him....