TaxTMI 
TaxTMI 
2018 (10) TMI 1884
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....pondent No.4) to accept the Sale Certificate dated 25.07.2018 executed by the Petitioner in favour of Respondent No.2 as per the Securitisation and Reconstructionof Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act) in respect of secured assets i.e. factory land and building, plant situated at Survey No.7, Gat No.11/C at village Dindori, TalukaDindori, District Nashik admeasuring 8000 square meters. 2. The substance of the Petition is that the Respondent No.4 has verbally declined to register the Sale Certificate on the premise that on the record of rights of the aforementioned secured assets, there is an endorsement of attachment to the tune of Rs. 13,63,744/as of 10.11.2015, on account of Sales Tax dues. ....
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....estion (b) is concerned, the same is stated to relate only to auction sales, which may be carried out in pursuance to the rights exercised by the secured creditor having a mortgage of the property. This aspect is also covered by the introduction of Section 31B, as it includes "secured debts due and payable to them by sale of assets over which security interest is created". 5. In view of express provisions of Section 26E and the aforesaid pronouncement, according to the learned Counsel for the Petitioner, the refusal of Respondent No.4 to register the Sale Certificate, on the premise that there are dues of the Sales Tax Department, is totally unjustifiable. 6. In contrast, it was sought to be urged on behalf of Respondent No.4 that the....
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....effect that since Section 26E of the Act came into force by Act 44 of 2016 and the endorsement of attachment in respect of Sales Tax dues was made prior thereto, the accrued right in favour of the Sales Tax Department would enure to the Sales Tax Department notwithstanding introduction of Section 26E in the SARFAESI Act. Section 26E of the SARFAESI Act reads as under: "26E. Priority to secured creditors.Notwithstanding anything contained in any other law for the time being in force, after the registration of security interest, the debts due to any secured creditor shall be paid in priority over all other debts and all revenues, taxes, cesses and other rates payable to the Central Government or State Government or local authority. ....
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....orce by Act 44 of 2016 do not detract materially from the overriding effect of the provisions of the said Section, especially, in the facts of the case at hand, as the security interest was created in pursuance of the mortgage registered on 05.03.2010. 10. A Division Bench of this Court in Writ Petition No. 1796 of 2015 in the case of Axis Bank Limited Vs. State of Maharashtra and Ors. (MANU/MH/0379/2017) decided on 07.03.2017 had an occasion to consider the import of legislative change, in view of introduction of the Section 26E of the SARFAESI Act. This Court had, inter alia, observed in paragraph 22 as under: "22. Though the learned counsel appearing for the respondent State is justified in contending in normal circumstances ....
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....r the State Government or the Local Authority. The applicability of provisions of Section 31B of RDB Act which is pari materia to Section 26E of the SARFAESI Act was subject matter for consideration before the Full Bench of the Madras High Court in the matter of Assistant Commissioner (CT) Chennai vs. the Indian Overseas Bank decided on 11.11.2016 and the Full Bench has observed in paragraph 4 of the Judgment that "the law having now been come into force naturally it would govern the rights of the parties in respect of even lis pendence" We do not propose to analyse the Full Bench judgment delivered by the Madras High Court." (emphasis supplied) 11. In the circumstances, we are of the view that the question of preferential claim....