2017 (8) TMI 863

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....hat in view of respondent No.2, being in arrears of sales tax, respondent No.1 vide communication dated 19.01.2015, called upon respondent No.3, to create a lien on the subject properties, which were otherwise mortgaged to the petitioner Bank, i.e., State Bank of India (SBI). 2.1. Pursuant to the communication dated 19.01.2015, an attachment entry was made by respondent No.3 on 13.08.2015. 3. In effect, the tussle is between the petitioner Bank and respondent No.1 with regard to the proceeds of the subject immovable properties, some of which, during the pendency of the captioned writ petition have been put to sale. 4. It is the case of the petitioner Bank that it has taken auction route for selling the subject properties by taking recour....

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....he properties, which are reflected in item No.3(a) and (b) above, sales certificates have been registered in favour of the concerned auction purchasers. However, insofar as the properties shown as items No.1 and 2 are concerned, it is averred in the very same affidavit by the petitioner Bank, that sales certificates have not, yet, been, registered in favour of the concerned auction purchasers, i.e., Mr.E.Saravanan, Mrs.S.Jayanthi and Mr.Arvind Kumar. 5. Respondent No.1, in opposition to the reliefs claimed for in the writ petition, has filed a counter-affidavit. 6. In sum, respondent No.1 claims priority over moneys, which have been received by the petitioner Bank upon sale of the subject properties. The stand of respondent No.1 is that a....

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....l be subject to the provisions of that Code." 8.1. This amendment was brought about with effect from 01.09.2016. 9. Likewise, a pari materia provision was introduced in the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (in short 1993 Act), with the insertion of Section 31B. 9.1. A challenge was laid to the amendment made in the 1993 Act in a batch of writ petitions. Since, two Division Benches of this court differed on the construction of Section 31B of the 1993 Act, the matter was referred to a Full Bench of this Court, in pursuance to the order passed in W.P.No.6267 of 2006 and W.P.No.253 of 2011. The Full Bench was, accordingly, called upon to answer the following issues : "a) As to whether the Financial Instit....

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....ere insolvency or bankruptcy proceedings are pending in respect of secured assets of the borrower, priority to secured creditors in payment of debt shall be subject to the provisions of that Code. 3. There is, thus, no doubt that the rights of a secured creditor to realise debts due and payable by sale of assets over which security interest is created, would have priority over all debts and Government dues including revenues, taxes, cesses and rates due to the Central Government, State Government or Local Authority. This section introduced in the Central Actis with notwithstanding clause and has come into force from 01.09.2016. 4. The law having now come into force, naturally it would govern the rights of the parties in respect of even ....