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TMI Blog2020 (3) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed by the High court, aggrieved by which the Appeal has been filed. 2. Biowin Pharma India Ltd. (hereinafter referred to as 'BPIL')- Respondent No.5 herein obtained a loan from the Union Bank of India. Property situated in Plot No.D- 11 admeasuring 1000 sq. mtrs. situated at Phase-III, Dombivli Industrial Area, MIDC, Kalyan along with plant machinery and building was mortgaged as security to Union Bank of India-Respondent No.5 herein. Respondent No.-5 filed OA No.1836 of 2000 before the Debt Recovery Tribunal III, Mumbai (hereinafter referred as 'the DRT') for recovery of the loan advanced to BPIL. The DRT allowed the OA filed by Respondent No.5 and directed BPIL to pay a sum of Rs. 4,76,14,943.20/- along with interest at the rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the High Court seeking a direction for issuance of 'No Objection' in respect of the plot and to restrain Respondent No.4 from enforcing the attachment of the said plot, which was performed on 11.02.2003. 4. The question posed before the High Court is whether the Appellant who bona fide purchased the property in auction sale as per the order of the DRT is entitled to have the property transferred in its name in spite of the attachment of the said property by the Income Tax Department. Relying upon Rule 16 of Schedule II to the Act, the High Court came to the conclusion that there can be no transfer of a property which is the subject matter of a notice. The High Court was also of the view that after an order of attachment is made un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Rule 2 of Schedule II to the Act. It was argued that a government debt in India is not entitled to have precedence over a prior secured debt. 6. Mr. Arijit Prasad, learned Senior Counsel appearing for the Union of India submitted that BPIL was in default of a payment of income tax and a penalty arose therefrom, due to which a notice under Rule 2 of Schedule II to the Act was issued on 11.02.2003 by following the prescribed procedure. He submitted that no property which is the subject matter of a notice can be transferred after the issuance of a notice under Rule 2. Mr. Prasad also submitted that the immovable property was attached in accordance with Rule 48 of Schedule II on 17.06.2003. Undisputedly, the sale in favour of the Appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e:- Dena Bank v. Bhikhabhai Prabhudas Parekh & Co. and Others (2000) 5 SCC 694, Union of India & Ors. v. Sicom Ltd. & Anr. (2009) 2 SCC 121, Bombay Stock Exchange v. V.S. Kandalgaonkar & Ors. (2015) 2 SCC 1, Principal Commission of Income Tax v. Monnet Ispat and Energy Ltd. (2018) 18 SCC 786] 9. Rule 2 of Schedule II to the Act provides for a notice to be issued to the defaulter requiring him to pay the amount specified in the certificate, in default of which steps would be taken to realise them. The crucial provision for adjudication of the dispute in this case is Rule 16. According to Rule 16(1), a defaulter or his representative cannot mortgage, charge, lease or otherwise deal with any property which is subject matter of a notice under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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