9911796707
TMI Blog2007 (1) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-fareast-language:EN-US;} MR. M.M. KUMAR AND MR. VINOD K. SHARMA, JJ. Mr. Govind Goel, Advocate, for the petitioner Ms. Ranjana Shahi, Central Government Counsel. JUDGMENT M.M. KUMAR, J. The short issue raised in this petition filed under Article 226 of the Constitution is whether a secured creditor like the petitioner would have preferential right on account of registered charge created on the property of the company for recovery of its dues over the dues of the Central Excise being the crown debts. Brief facts of the case may first be noticed. The petitioner is a Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of business. The mortgage and charge shall be in such form and manner as may be prescribed by the lenders. The mortgage and charge shall rank pari passu with the mortgage and charges created and/or to be created in favour of PFC for their respective financial in terms of approved financial plan as given in Schedule II hereto." A memorandum of entry showing the deposit of title deed and creating equitable mortgage on the properties of M/s Jay Enn Castings was made between the parties on 24.1.1992 (P-1). On account of irregularities in repayment of loan, the PSIDC invoked Section 29 of the State Financial Corporations Act, 1951 (SFC Act) and ordered taking over the assets of M/s Jay Enn Castings on 10.8.1999 (P-2). Accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property under Section 142 of the Customs Act as the PSIDC had the preferential right for the sale of mortgaged assets including the property in question. Thereafter, the Central Excise Department proceeded to issue advertisement for disposing of the property on 25.1.2005. The open auction was fixed for 22.2.2005, which could not materialise. Another advertisement again was issued on 3.3.2005 and the date of auction was fixed for 15.3.2005 (P-8). Feeling aggrieved, the PSIDC has approached this Court asserting that it has preferential right being mortgagee, for quashing the order of attachment, dated 14.10.2004, issued under Section 142 of the Customs Act and has also prayed for issuance of direction restraining the Department of Central E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise would not attain preference over secured creditor who had registered charge by virtue of mortgage or equitable mortgage. In support of his submission learned counsel has placed reliance on para 10 and 15 of the judgment of Hon'ble the Supreme Court in the case of Dena Bank v. Bhikhabhai Prabhudas Parekh and Co., AIR 2000 SC 3654. He has further placed reliance on a Single Bench judgment of this Court, disposing of a bunch of petitions on 4.12.2006, titled as Union of India v. Punjab State Industrial Development Corporation Ltd., Chandigarh and another (C.W.P. No. 3413 of 2005) and a Division Bench judgment of this Court in the case of Employees Provident Fund Organisation v. Punjab State Industrial Development Corporation and an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of time at which the two rights are at conflict, nor can there be a question which of the two ought to prevail in a case where one, that of the subject, has prevailed already. In Giles v. Grover (1832) 131 ER 563 it has been held that the Crown has no precedence over a pledge of goods. In Bank of Bihar v. State of Bihar, AIR 1971 SC 1210, the principle has been recognised by this Court holding that the rights of the pawnee who has parted with money in favour of the pawnor on the security of the goods cannot be extinguished even by lawful seizure of goods by making money available to other creditors of the pawnor without the claim of the pawnee being first fully satisfied. Rashbehary Ghose states in Law of Mortgage (T.L.L., Seventh Editio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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