TaxTMI 
TaxTMI 
2020 (12) TMI 1261
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....te, vide Issue No.106/2020, dated 16-11-2020 and the attachment notice bearing No.29/2020, dated 17-02-2020 of the 2nd respondent. 2. The 3rd respondent herein borrowed amounts from Andhra Bank, Hosur Branch by mortgaging the subject property on 16-03-2013. In view of the default committed by the 3rd respondent, its account became "Non Performing Asset". Thereafter, Andhra Bank pressed into service the provisions of the Securitization & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 ('Act", for brevity) and issued notices under Sections 13(2) and (4) of the Act on 08-08-2016 and 18-07-2017 respectively. Subsequently, on 26-09-2017, Andhra Bank assigned the debt in favour of the petitioner herein, whic....
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....ommercial Tax that the provisions of law on which the learned counsel for the petitioner seeks to place reliance have no relevance to the facts of the present case. It is also the submission of the learned Government Pleader that the benefit as provided under Section 26E of the Act can be extended only to the debts accrued after the advent of said provision of law. It is also the submission of the learned Government Pleader that the mortgage debt should necessarily yield to the crown debt coupled with charge and the petitioner-Asset Reconstruction Company cannot take advantage of the provisions of either Section 26-E of the Act or Section 31B of the Recovery of Debts and Bankruptcy Act,1993 ( for short "Bankruptcy Act"). 6. In the above ....
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....truction, as the case may be; or (iv) debenture trustee registered with the Board appointed by any company for secured debt securities; or (v) any other trustee holding securities on behalf of abank or financial institution, in whose favour security interest is created by any borrower for due repayment of any financial assistance. It is very much clear from a reading of the above provision of law that Asset Reconstruction Company is also a secured creditor, as such, the petitioner herein is undoubtedly a secured creditor. 8. It is also important to note the definition of "security interest". Section 2(zf) of the Act defines "security interest", which reads as under:- "security interest" means right, title or....
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....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. Explanation:- For the purpose of this section, it is hereby clarified that on or after the commencement of the Insolvency and Bankruptcy Code,1016, in cases where 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 the Code." Section 31B of the Bankruptcy Act reads as under:- 31 B. Priority to secured creditors. - Notwithstanding anything contained in any other law for the time being in force, the rights ....
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....3 and as the account of the loanee became NPA on 31-07-2016, the Bank authorities initiated action under the provisions of the Act by issuing notices under Section 13(2) and (4) of the Act. It is absolutely not in controversy that the petitioner herein clearly falls under the definition of "secured creditor" as defined under Section 2(zd) of the Act, since the petitioner herein is an Asset Reconstruction Company in whose favour Andhra Bank assigned the debt by way of registered document on 26-09-2017. In fact, the material available on record further reveals that on 18-11- 2020 i.e., immediately after the sale notice came to be issued by the 2nd respondent, the petitioner herein brought to the notice of the Office of the 2nd respondent abou....