TaxTMI 
TaxTMI 
2021 (12) TMI 1046
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....oner that the respondent No.4 had initially applied for the facility of cash credit limit and Inland Letter of Credit limit to the extent of Rs. 10 crores (Rs.Ten Crores only). The petitioner - Bank had sanctioned and granted the said credit facilities to the respondent No.4 and accordingly disbursed the said limits to the respondent No.4. Thereafter, on the request of respondent Nos.4 to 6, the aforesaid credit facilities were enhanced and renewed from time to time and lastly, it was enhanced to the extent of Rs. 55 crores (Rs. Fifty Five Crores only). The aforesaid credit facilities granted to respondent No.4 were secured by mortgage of the immovable property of the respondent Nos.4, 5 and 6. The respondent Nos.4 to 6 and other guarantors....
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....thout their consent. The petitioner - Bank informed the respondent Nos.2 and 3 that the petitioner - Bank has already initiated action under SARFAESI Act for recovery of outstanding amount of Rs. 59,11,28,808.59 against the respondent Nos.4 to 6. The petitioner- Bank specifically informed the respondent Nos.2 and 3 that under the law, petitioner - Bank is having first charge over the secured assets since the respondent Nos.4 to 6 had mortgaged their property with the petitioner- Bank prior to action initiated by the respondent Nos.2 and 3. It is stated that despite this information, the respondent Nos.2 and 3 proceeded ahead to auction the property viz; the secured assets of respondent Nos.4 to 6. The respondent Nos.5 and 6 challenged the a....
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.... Act, 2002 (for short 'MVAT Act'). The State Government has a priority over the property attached in this case. 5] Heard the learned Advocate for the petitioner- Bank and the learned Advocate for the respondent Nos. 1 to 3. Perused the record and proceedings. 6] Section 26-E of the SARFAESI Act was amended by a Central Legislation vide Act No. 44 of 2016 with effect from 01/09/2016. Section 26-E of the SARFAESI Act has a bearing with the controversy involved in this petition and therefore, the same is reproduced here. It reads thus : ''26-E 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 c....
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....relying upon Section 37 of the MVAT Act to justify their respective actions. In our view, though Section 37 begins with a non obstante clause, it would be subject to any provisions of the Central Act dealing with the issue in question. In our view, therefore, the contention of the respondent Nos. 2 and 3 based on Section 37 of the MVAT Act cannot be sustained. In this case the provisions of Section 26-E of the SARFAESI Act would be applicable. 9] It is the case of the respondents that the process for attachment of the property in question was initiated by the respondent Nos. 2 and 3 prior to the coming into force of Section 26-E of the SARFAESI Act and therefore, the claim of the respondent No. 2 to auction the property would get priorit....
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....f the SARFAESI Act has been fulfilled by the petitioner-Bank. The issue with regard to the priority of a secured creditors with regard to the secured assets over the priority of all other debts and Government dues has been considered in following decisions. 1] Edelweiss Asset Construction Co. Ltd. .v/s. Tax Recovery Officer, Mumbai and oths., Writ Petition No. 7964 of 2021 decided on 28/07/2021 (unreported). 2] State Bank of India .v/s. The State of Maharashtra and oths., Writ Petition (st.) No. 92816 of 2020, decided on 17/12/2020 (unreported). 3] The Cosmos Co-operative Bank .v/s. The State of Maharashtra and ors., Writ Petition No.3820 of 2018, decided on 13/11/2019 (unreported). 10] In these decisions (supr....