TaxTMI 
TaxTMI 
2020 (5) TMI 691
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.... over the statutory charge due to Government, created under other state enactments. 3 . Though the entire factual situation arising in the case may not have much relevance for deciding the issue that arises for consideration, still, a nutshell of facts are referred to. 4. The Travancore Devaswom Board (hereinafter referred to as 'the Board' for short), was granted permission by this Court to bid in a proposed auction to be conducted by the 4th respondent by order dated 15.03.2019 in D.B.A. No. 2 of 2019. Consequent to the permission so granted, the Board bid at the auction for a consideration of Rs. 8,20,06,000/- (Rupees Eight crores twenty lakhs and six thousand only) and the sale was confirmed in favour of the Board. After payment of the entire consideration, a sale certificate was drafted. Officials of the Board along with the Bank officers approached the Sub Registrar, Kottarakkara, to register the sale deed. A further amount of Rs. 65,60,480/- (Rupees Sixty five lakhs sixty thousand four hundred and eighty only) was spent towards purchase of stamp papers and the sale certificate was drawn as evidenced by Annexure-A4. However, when the sale certificate was attempted t....
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....The Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016 (hereinafter referred to as 'the Amendment Act, 2016' for brevity) introduced amendments to the aforementioned two statutes. By virtue of S. 18 of the Amendment Act, a new Chapter as Chapter IVA was introduced into the SARFAESI Act while by virtue of S. 41 of the Amending Act, a new provision as S. 31B was added to the RDB Act. Prior to the Amendment Act of 2016, the position of law as regards the secured creditor vis-Ã -vis the statutory charges was as laid down by the Hon'ble Supreme Court in the decision in Central Bank of India v. State of Kerala & Ors. (2009 (1) KLT SN 53 (C. No. 58) SC : (2009) 4 SCC 94). It was held in the aforesaid decision that the Securitisation Act and the RDB Act do not create a first charge in favour of Banks and other secured creditors over the statutory charges created under different statutes. 8. Kerala Value Added Tax Act, 2003 ('KVAT Act' for short) creates a statutory charge in respect of any tax payable by a person under that Act. S. 38 of the KVAT Act reads thus: "38. Tax payable to be first charge on ....
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....licit that even as against statutory charges created under other Central Enactments, secured" creditors shall have the right for priority in payment and priority to realise the debt by bringing the secured asset for sale. 11. The SARFAESI Act and the RDB Act are Central enactments while the KVAT Act is a State enactment. The effect of inconsistency between a Central enactment and State enactment is resolved by recourse to Art. 254(1) and Art. 246 of the Constitution of India. Art. 254(1) deals with the Parliamentary supremacy in matters in which Parliament is competent to enact. Competence to enact a law is as specified under Art. 246. Supremacy of Parliament will be maintained irrespective of any conflict between matters in which both Centre and the State can enact on a subject matter. Repugnancy or inconsistency between the provisions of a Central enactment and State enactment can occur in two situations both of which are dealt with in Art. 254(1) of the Constitution of India. The first situation covers instances where a provision of law made by the Legislature of a State is repugnant to any provision of law made by the Parliament, which the Parliament is competent to enact. In ....
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....ision in the Legislation, as the case may be, will become void, if the field becomes covered by a later law made by Parliament. Reference can be usefully made to State of Jammu and Kashmir v. M.S. Farooqi & Ors. (1972 KLT OnLine 1145 (SC) : (1972) 1 SCC 872), Jaya Gokul Educational Trust v. Commissioner & Secretary to Government Higher Education Department, Thiruvananthapuram, Kerala State & Anr. (2000 (2) KLT 267 (SC) : (2000) 5 SCC 231) and I.T.C. Ltd. v. Agricultural Produce Market Committee & Ors. (2002 (1) KLT OnLine 1052 (SC) : (2002) 9 SCC 232). 13. While determining the nature of inconsistency between the Central legislation and the State Legislation, it is relevant to bear in mind the principles and also the three tests laid down in the Constitutional Bench decision in State of W.B. v. Kesoram Industries (2004 (1) KLT OnLine 1271 (SC) : (2004) 10 SCC 201). Numerous other decisions of the Supreme Court have also been rendered on the aforesaid concept including the Constitutional Bench decision in State of W.B. v. Committee for Protection of Democratic Rights, (2010 (1) KLT 723 (SC) : (2010) 3 SCC 571) and UCO Bank & Another v. Dipak Debbarma & Ors. (2017 (1) KLT OnLine 220....
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.... in any contract" is more often than not appended to a section in the beginning with a view to give the enacting part of the section in case of conflict an overriding effect over the provision of the Act or the contract mentioned in the non-obstante clause. It is equivalent to saying that in spite of the provision of the Act or any other Act mentioned in the non-obstante clause or any contract or document mentioned the enactment following it will have its full operation or that the provisions embraced in the non-obstante clause would not be an impediment for an operation of the enactment.........." "70. It is well settled that the expression 'notwithstanding' is in contradistinction to the phrase 'subject to', the latter conveying the idea of a provision yielding place to another provision or other provisions to which it is made subject." 16. In a recent judgment reported in Pioneer Urban Land and Infrastructure Ltd. & Anr. v. Union of India & Ors. (2019 (3) KLT OnLine 3035 (SC) : (2019) 8 SCC 416) dealing with the inconsistency that arose between the provisions of the Insolvency and Bankruptcy Code, 2016 and the provisions of the Real Estate (Regulation and Deve....
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....ein a learned Single Judge of this Court after referring to various decisions and noting the change of law that was brought in by the Amending Act of 2016 held that as secured creditor under S. 26E of the SARFAESI Act and of S. 31B of the RDB Act obtains a priority over the right claimed by the revenue both in proceedings against properties in question or in recovering the secured debt. We express our approval of the said decision and also the decision of the Full Bench of the Madras High Court referred to above. 21. The learned Standing Counsel for the Bank also referred to Madhan v. Sub Registrar (2014 (1) KLT 406) and unreported decision of the Division Bench of this Court in Ali Ashraf M.M. v. Sub Registrar (2015 (3) KLT OnLine 1117 : W.A. No. 612 of 2015). The said two decisions have no application to the facts of the instant case since they relate to attachments effected subsequent to the creation of equitable mortgage. 22. Hence, we hold that the sale carried out either under the SARFAESI Act or under the RDB Act takes precedence over the statutory charges due to the Government created under KVAT Act or under other State Enactments after the Amendment Act of 2016. A secure....