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2018 (12) TMI 557 - HC - Indian LawsLiability of purchaser of property in e-auction to clear the dues of previous owner - sale of immovable property by e-auction - denial of registration of property on the ground of attachment of said property - some dues were payable to the Punjab Government, which were pending against the previous owner of the said property - Section 31B of SARFAESI Act - Held that:- Section 31B leaves no manner of doubt that the rights of a secured creditor to realise secured debts due and payable to them by sale of assets over which security interest is created, shall have priority and shall have to be paid in priority over all other debts and government dues including revenues, taxes, cesses and rates due to the Central Government, State Government or Local Authority - Hence it clearly emerges that the revenues, taxes, cesses and rates due to the Central Government, State Government or a Local Authority shall not have precedence or preference over the dues recoverable by a secured creditor by sale of secured asset. Moreover, it is an admitted fact herein that the respondent-bank had auctioned the property in question under the Act being a secured asset, duly mortgaged in their favour by the previous owner, to secure the credit facilities allowed by the respondent-bank. In M/s Rana Girders Limited vs. Union of India and others, [2013 (8) TMI 540 - SUPREME COURT], the Apex Court held that the subsequent purchaser could not be burdened with the liability relating to the dues of the Government until and unless there is a specific provision in the statute mandating first charge for the purchaser. In the case in hand, the petitioner had purchased the property in e-auction being the highest bidder, believing that the property was free from all encumbrances and charges. Thus, the petitioner was under no obligation to discharge the liability of the outstanding dues against the previous owner. Petition allowed - decided in favor of petitioner.
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