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2024 (5) TMI 1044 - BOMBAY HIGH COURTPriority of secured creditors u/s 26-E of the SARFAESI Act, 2002 over State Tax Authorities' claims - provisions of Chapter IV-A, and more particularly Section 26-E of the SARFAESI Act, 2002 which was brought into force on 24th January, 2020 - HELD THAT:- Once a security interest of the secured creditor is registered with CERSAI, and its registration is prior to any other registration, then, that secured creditor would get priority towards the sale proceeds of that particular asset over all other debts and all revenues, taxes, cesses and other rates payable to the Central Government, State Government or local authority. In the facts of the present case, the Petitioner bank’s borrowers had availed of financial assistance. To secure the same, on 15th July, 2015, the borrowers created a mortgage on the secured asset by deposit of title deeds. The intimation of mortgage was also given to the Joint Sub-Registrar, Haveli-22, Pune on the very same date. Thereafter, on 25th July 2015, the Petitioner bank duly registered its charge on the secured asset with CERSAI. In contrast, the State Tax Authorities have issued an attachment order only on 11th February, 2021 and have not even registered the same as contemplated under Section 26-B (5) of the SARFAESI Act, 2002. The Full Bench of this Court in the case of Jalgaon Janta Sahakari Bank Ltd v/s Joint Commissioner of Sales Tax Nodal [2022 (9) TMI 163 - BOMBAY HIGH COURT] and a Division Bench judgment of this Court in the case of Indian Overseas Bank (supra). In fact, in Indian Overseas Bank [2024 (3) TMI 1134 - BOMBAY HIGH COURT], this Court has clearly held that once the security interest is enforced, the State Tax Authorities would have to look to the sale proceeds to satisfy their claim subject to the priority of the secured creditor but cannot chase the very same asset [which is sold by the Petitioner bank under the SARFAESI Act, 2002] in the hands of the purchaser. The petition is allowed.
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