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2019 (2) TMI 2037 - HC - CustomsSeeking lifting of attachment - recovery of dues - priority over such dues - whether the charge created by the Customs Department would prevail over the charge created by the Bank in discharge of which the property in question was auctioned and purchased for valuable consideration by the petitioner? - Section 26E to the SARFAESI Act - HELD THAT:- The question of priority of charge was considered by the Full Bench of this Court in the case of UTI Bank Limited vs. Deputy Commissioner Central Excise [2006 (12) TMI 2 - MADRAS HIGH COURT] setting out the scheme of priority in respect of collection of dues, where it was held that In the absence of such specific provision in the Central Excise Act as well as in Customs Act, we hold that the claim of secured creditor will prevail over Crown's debts. The Section is unambiguous and provides that a charge created over a property to a secured creditor, being a financial institution, would prevail over all other charges created over the asset in question and is absolute in its obligation - In the present case, the charge created by the Bank is prior in time to the demand raised by the customs authorities. Moreover, the customs authorities have not even registered an encumbrance or created a charge but only written a letter to the Registrar not to entertain any transfer of the property in question. This cannot, in any way stand in the way of the Bank, as secured creditor, taking recourse under SARFAESI. The respondent is directed to lift the attachment over the property in question within a period of two (2) weeks from date of receipt of a copy of this order - Petition allowed.
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