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TMI Blog2017 (8) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... ned counsel for the petitioner in W.P.No.40656 of 2015; Mr.Vijay Narayan, learned Senior Counsel assisted by M/s.BFS Legal and Mr.M.Aasim Shehzad, learned counsel for the petitioners in W.P.Nos.34703 of 2016 and 3572 of 2017; Mr.P.Srinivas, Mr.A.N.Jayaprathap, learned Standing Counsels and Mrs.A.Srijayanthi, learned Special Government Pleader appearing for the respondents. 2. There are three writ petitions, relating to the orders of attachment passed by the Income Tax Department on the properties, which were initially mortgaged with the Indian Bank by the borrower. In W.P.Nos.34703 of 2016 and 3572 of 2017, the petitioner is Asset Reconstruction Company (India) Limited and they have challenged two orders of attachment of the subject proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016, Section 41 of the same seeking to introduce Section 31B in the Principal Act, Which reads as under:- "31B. Notwithstanding anything contained in any other law for the time being in force, the rights of secured creditors to realise secured debts due and payable to them by sale of assets over which security interest is created, shall have priority and shall 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. Explanation:-for the purposes of this Section, it is hereby clarified that on or after the commencement of the insolvency and bankruptcy Code, 2016, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy of the proceedings under the Income Tax Act or after the completion thereof and before the notice under Rule 2 of Second Schedule as per Section 281 of the Act is void. Therefore, the mortgage or creation of charge in favour of the Bank, during the pendency of the proceedings, is void and the Income Tax Department has attached the properties, after issuing notice under Rule 2 of the second schedule. One more submission made by the Revenue is by contending that the document executed between the petitioner and the Indian Bank is a sale document and admittedly, purchase made by the petitioner was on 07.12.2007, much after the attachment of the property by the Income Tax Department. 5. The answer to the two submissions raised by the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax Department has nothing to add except to aver that excess realization from sale of the subject properties over and above the dues to the Indian Bank from the date of pendency of the proceedings against the defaulter or at least from the date of attachment dated 27.02.2004, be surrendered to the Income Tax Department for adjustment against the outstanding dues of the defaulter-company, since the subject properties were also mortgaged, rather pledged as security to the Indian Bank for obtaining various financial facilities by the defaulter-company as well as M/s.Well Stores, the petitioner in W.P.No.40656 of 2016. 8. The learned counsel appearing for the petitioner viz., Asset Reconstruction Company (India) Limited, on instructions, wou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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