TaxTMI 
TaxTMI 
2018 (12) TMI 1933
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....ondent No.1 Sugar Factory had obtained loan from the petitioner bank. Respondent No.1 executed security documents, such as mortgage of agricultural land, plant and machinery, hypothecation of movables and pledge of the goods. The petitioner has the status of a secured creditor. The account of respondent No.1 became nonperforming asset. The petitioner invoked provisions of Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("SARFAESI Act", for short). Respondent No.1 did not comply with the notice issued under Section 13(2) of the SARFAESI Act. The petitioner proceeded under Section 13(4) of the SARFAESI Act and the possession was taken by the petitioner Bank of the secu....
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....2008 and a public notice as required under the provisions of SARFAESI Act was also issued in local newspapers. The learned Senior Counsel submits that once action under the provisions of the SARFAESI Act has been initiated, respondent Nos.3 and 4 could not have exercised their jurisdiction on the said secured assets. The petitioner Bank being a secured creditor, has first charge over all other claims. The learned Senior Counsel submits that the recovery of the gratuity amount as per the provisions of the Payment of Gratuity Act, 1972 is as arrears of land revenue. The recovery to be made as arrears of land revenue would not supersede the claim of the petitioner Bank. The learned Senior Counsel placed reliance on the judgment of the Apex Cou....
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....truction Private Limited Vs. Haryana Concast Limited and another (2016)4 SCC 47 (iii) Employees Provident Fund Commissioner Vs. O.L. Of Esskay Pharmaceuticals Limited 2012(1) ALL MR 923 (S.C.) 5. We have considered the submissions canvased by the learned counsel for the respective parties. 6. The factual matrix, as narrated supra, is not much debated. It is not disputed that the petitioner bank is a secured creditor of respondent No.1. The account of respondent No.1 was classified as Non Performing Asset (N.P.A.). The petitioner Bank resorted to the provisions of SARFAESI Act. The notice under Section 13 (2) of the SARFAESI Act was issued on or about 16th June, 2008. Respondent No.1 did not comply with the notice. The petitioner initiat....
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.... of SICOM Limited and another (supra) has considered the priority of realisation of dues i.e. Crown debts visavis secured debts of a secured creditor and it was held that the debts of the secured creditor will have a priority over the Crown debts. 10. The judgment in the case of Employees Provident Fund Commissioner (supra) was interpreting Section 11 (2) of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 ("EPF Act", in short) and it was held that Section 11(2) of the EPF Act overrides the provisions of Section 529A of the Companies Act and preferential payment as per Section 11(2) of the EPF Act will have to be considered as the Employees Provident Fund is having the first charge. Under the Payment of Gratuity Act, t....
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.... be about the priority of claim, whether the claim of the petitioner bank would have a priority over the claim under the Payment of Gratuity Act visavis the provisions of the SARFAESI Act. The Apex Court in the case of SICOM Limited and another (supra) has unequivocally held that considering the statutory right of the Financial Corporation under the State Financial Corporations Act and the non obstante clause occurring therein, the Corporation had a preferential claim. Similar view is taken by this Court in the case of Tata Metaliks Limited and another (supra). 14. The SARFAESI Act has also been amended and Section 26E is introduced with the non obstante clause giving a priority claim over all other debts. 15. The employees i.e. responden....