2023 (8) TMI 1365

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....No Appearance for R2 to R4 Mrs.Ananda Gomathy for R5 Mr.N.Dilipkumar for R6 Mr.A.P.Athithan for R7 ORDER The petitioner company is an auction purchaser of the property in the nature of plots in Uthangudi village, Madurai North Taluk, Madurai North Registration District in R.S.Nos.149/4A1, 149/4A3, 149/4A and 148/2. The property was sold under SARFAESI Act, by the fifth respondent bank, being the secured creditor. A sale certificate was duly issued in favour of the petitioner on 22.02.2022. Upon producing the same for registration before the first respondent namely the Sub- Registrar, Othakadai, Madurai, the same was declined orally on the ground that in respect of the property purchased, there are orders of attachment passed by the Commis....

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....ing duly registered, by virtue of Section 26E of SARFAESI Act, 2002, it is only the claim of the fifth respondent bank which has priority. Section 26E of SARFAESI Act, 2002, is extracted hereunder for ready reference: "Section 26E: Priority to secured creditors. 26E. 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. Explanation.-For the purposes of this section, it is hereby clarified that on or after the commencement of the Insolvency and Bankruptcy Code, 2016....

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....ts, and for matters connected therewith or incidental thereto. Therefore, the SARFAESI Act has been enacted providing specific mechanism/provision for the financial assets and security interest. It is a special legislation for enforcement of security interest which is created in favour of the secured creditor - financial institution. Therefore, in absence of any specific provision for priority of the dues under the MSMED Act, if the submission on behalf of Respondent 1 for the dues under the MSMED Act would prevail over the SARFAESI Act, then in that case, not only the object and purpose of special enactment/the SARFAESI Act would be frustrated, even the later enactment by way of insertion of Section 26-E of the SARFAESI Act would be frustr....