TMI Blog2020 (10) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... above said provisions get priority over the right, if any, claimed by the revenue. There is no fresh adjudication is required in the light of the judgement apart from the factual position which is not in dispute nor any contra materials produced. Petition allowed. - Writ Petition Nos.8546, 8547, 8548 and 8549 of 2020 and W.M.P.No.10335 of 2020 in W.P.No.8546 of 2020 - - - Dated:- 9-9-2020 - THE HONOURABLE Mr.JUSTICE M.M.SUNDRESH And THE HONOURABLE Mrs.JUSTICE R.HEMALATHA For the Petitioner : Mr.Om Prakash, Senior Counsel for Mr.P.Elaya Raj Kumar for M/s.Ramalingam Associates for petitioner in all WPs For the Respondent : Mr.S.Ravi, Senior Counsel for M/s.Indhumathi for R1 in all WPs Mr.Sri Ganesh for R2 in all WPs Mr.T.M.Pappiah, Spl. GP for R6 in all WPs No Appearance for RR 3 to 5 in all Wps ORDER [ The Order of the Court was made by M.M.SUNDRESH . J. ] The petitioner in all these writ petitions is one and the same. It is the successful bidder in the auctions conducted by the 1st respondent. In W.P.No.8546 of 2020, the petitioner could not repay the remaining amount. Subsequently, the amount has been paid and received by the 1st respondent. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en there is a specific provision in the statute claiming first charge over the property, the Crown's debt is entitled to have priority over the claim of others. (iii) Since there is no specific provision claiming first charge in the Central Excise Act and the Customs Act, the claim of the Central Excise Department cannot have precedence over the claim of secured creditor, viz., the petitioner Bank. (iv) In the absence of such specific provision in the Central Excise Actas well as in Customs Act, we hold that the claim of secured creditor will prevail over Crown's debts. In view of our above conclusion, the petitioner UTI Bank, being a secured creditor is entitled to have preference over the claim of the Deputy Commissioner of Central Excise, first respondent herein. 8. It was duly followed by another Full Bench of this Court reported in Manu/TN/3743/2016 [The Assistant Commissioner (CT), Annasalai-III Assessment Circle v. The Indian Overseas Bank W.P.No.2675 of 2029 etc., batch dated 10.11.2016]. Reliance has been made on the following para: 1.The writ petitions have been listed before the Full Bench in pursuance to the reference order in W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, the same is stated to relate only to auction sales, which may be carried out in pursuance to the rights exercised by the secured creditor having a mortgage of the property. This aspect is also covered by the introduction of Section 31B, as it includes ''secured debts due and payable to them by sale of assets over which security interest is created''. 6.We, thus, answer the aforesaid reference accordingly. The matters be placed before the roster Division Bench for dealing with the individual cases. 9. Taking note of the above, a Division Bench of Madurai Bench of this Court reported in Manu/TN/7117/2018 [Central Bank of India v. The Joint Sub Registrar No.1 and others W.P.No.10724 of 2018 dated 06.12.2018] has held as follows:- 8. For the sake of convenience, Section 26-E of the SARFAESI Act, is extracted hereunder:- 26E. Notwithstanding anything contained in any other law for the time being in force, after the registration of security interest, the debts due to any secured creditor shall be paid in priority over all other debts and all revenues, taxes, cesses and other rates payable to the Central Government or State Government or local aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Central Bank of India (supra) was prior to the amendment in the Act, 2002 and 1993 respectively. However, what is important are the observations of the Supreme Court as contained in para-126 of this decision quoted above. The Supreme Court observed that while enacting the DRT Act, the Parliament was aware of the law laid down by the Supreme Court, wherein priority of the State dues was recognized. If the Parliament intended to create the first charge in favour of the Banks, Financial Institutions or other secured creditors on the property of the borrower, then it would have incorporated a provision like Section 529-A of the Companies Act or Section 11(2) of the EPF Act and ensured that notwithstanding the series of judicial pronouncements, the dues of Banks, Financial Institutions and other secured creditors should have priority over the State's statutory first charge in the matter of recovery of the dues of sales tax etc. The Supreme Court proceeded to observe that the fact of the C/SCA/13863/2014 JUDGMENT matter was that no such provision had been incorporated in either of those enactments despite conferment of extraordinary power upon the secured creditors to take posse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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