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2016 (8) TMI 802 - MADRAS HIGH COURT

2016 (8) TMI 802 - MADRAS HIGH COURT - [2016] 95 VST 308 (Mad) - Issuance of a writ of certiorari to quash attachment notice – lien over the property to recover tax dues - default in payment of loan amount – sale of property by Debt Recovery Tribunal to petitioner’s vendor and certificate of sale issued in his favor – creation of encumbrance by the department thereafter – Held that: - the property was subject matter of mortgage with the bankers, who were secured creditors and they had brought th .....

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- T. S. Sivagnanam, J. For the Petitioner : Mr. D. Vijayakumar For the Respondents : Mr. S. Kanmani Annamalai ORDER Heard Mr.D.Vijayakumar, learned counsel for the petitioner and Mr.S.Kanmani Annamalai, learned Additional Government Pleader for the first respondent and Mr.S.Diwakar, learned Special Government Pleader for the second respondent and with the consent of parties, the writ petition itself is taken up for final disposal. 2.The petitioner has filed this writ petition praying for the iss .....

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nt to the orders passed by the Debts Recovery Tribunal, the property owned by the company was sold to one Mr.P.Ashok Kumar and the certificate of sale dated 25.1.2005 was issued in favour of the said P.Ashok Kumar, which was registered as Document No.817 of 2005, dated 31.01.2005, on the file of the Sub-Registrar, Ambattur. The petitioner in turn had purchased the property from the said Mr.P.Ashok Kumar by sale deed dated 21.2.2005, registered as Document No.1644 of 2005, on the file of the Sub- .....

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r long drawn litigation and the petitioner's vendor had purchased the same for valid consideration through the Debts Recovery Tribunal and a certificate of sale was issued in his favour. Therefore, as long as the said certificate of sale has not been cancelled or modified, the first respondent Department cannot have any lien over the property, when admittedly action was initiated by the first respondent only in 2006. 4. At this stage, it would be worthwhile to refer to the decision of the Ho .....

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ery Certificates issued by the Debts Recovery Tribunal for recovery of dues to the City Union Bank. The appellants had paid the entire amount due on 25.3.2003 and the sale was confirmed in their favour on 23.4.2003. There is no indication of any sales tax arrears in the advertisement for auction sale and there was no application from any statutory or public authority seeking to set aside the sale. For the first time, by letter dated 25.6.2004, the Commercial Officer required the second responden .....

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he purchasers for value without notice for the sales tax arrears of the defaulting company or the consequent charge on the property. Thus, the property in the hands of the appellants was free of the charge and it is not open to the first respondent to enforce the liabilities of the defaulting company in this manner against the appellants." 5. Further, in the decision in the case of Senthil Kumar vs. Assistant Commissioner, Chennai and Others, in W.P.No.9928 of 2009, dated 22.12.2010, the Ho .....

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under the SARFAESI Act. The First respondent's communication dated 24.12.2008 to the Third Respondent-Bank reads as follows: "The Sub-Registrar, Virugambakkam has issued an Encumbrance Certificate on 24.12.2008 with the Commercial Tax Officer as one of the purchaser cannot claim the right on the said property." The aforesaid communication would show that the Encumbrance (tax arrears) Certificate was only reflected on 24.12.2008. Whereas the Encumbrance Certificate dated 15.5.2008 i .....

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