TMI Blog2024 (4) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... aw has been followed by the respondent/Sales Tax Department as observed and accepted by the Court. More so having already taken a chance to argue the case in the alternative, based on the provisions of Section 31B of the Recovery of Debts And Bankruptcy Act, 1993, the petitioners cannot be permitted to have a second round of arguments on the same issues under the garb of a review petition. The principles on the exercise of the review jurisdiction are well settled. The Supreme Court in THE STATE OF WEST BENGAL VERSUS KAMAL SENGUPTA AND ANOTHER [ 2008 (6) TMI 578 - SUPREME COURT] has clearly held that a review cannot be sought on the ground of discovery of new matter or evidence. Such matter or evidence would be relevant and must be of such a character that if the same has been produced, it might have altered the judgment. It was thus observed that the mere discovery of new or important matter or evidence is not a sufficient ground for review ex debito justitiae. It was further held that parties seeking review also need to show that such additional matter or evidence was not within its knowledge and even after the exercise of due diligence, the same could not be produced before the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r's failure to register the security interest in terms of the amendments introduced in the SARFAESI Act ? (e) Whether the priority of interest contemplated by section 26E of the SARFAESI Act could be claimed by a secured creditor without registration of the security interest with the Central Registry ? Depending on the answer to this question, whether correct proposition of law has been laid down (extracted infra) in paragraph 21 of the Division Bench decision reported in ( 2020) 2 Bom CR 243 (ASREC (India) Ltd. v. State of Maharashtra) and in paragraph 35 of the Division Bench decision, reported In [2021] 89 GSTR 24 (Bom); (2021) 2 Mah. J 721 (State Bank of India v. State of Maharashtra)? (f) When, and if at all, can it be said that the statutory first charge under the State legislation, viz., the BST Act, the MVAT Act and the MGST Act, as the case may be, stands displaced having regard to introduction of Chapter IV-A in the SARFAESI Act from January 24, 2020? and (g) Whether an auction purchaser of a secured asset would be liable to pay the dues of the Department in order to obtain a clear and marketable title to the property having purchased the same on as is where is and wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dst raging controversy over competing claims in respect of the secured assets, the petitioner no. 1 claimed to have sold Flat Nos.601, 602 and 502, and issued auction notices to sell the secured assets, twice. Respondent no. 1, on its part, issued auction notice to sell Flat No.503 on 1st January 2018 and Flat No.501 on 9th January 2018. The sale proclamation notice was issued on 17th January 2018 scheduling the sale on 22nd February 2018. 229. On 23rd January 2018, the respondent no. 1 addressed a communication to the Chairman/Secretary of Omkareshwar Co-op. Housing Society Limited (in which the secured assets are situated) directing them not to grant no objection certificate for transfer of the secured assets. Thus, aggrieved by the aforesaid action on the part of the respondents, the petitioners have approached this Court seeking directions to the respondent no.2 to withdraw the impugned notices dated 1st January 2018 and 9th January 2018 as well as to restrain the respondents from proceeding with the auction of Flat Nos.501 and 503. It is also prayed that the petitioners be allowed to auction the secured assets to enforce its security interest. 230. During the pendency of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along with interest, in the event the writ petition is dismissed, and instead directed the petitioners to deposit the amount realized on the sale of the secured assets i.e. Rs. 92,09,814/- with the registry. The said amount has, accordingly, been deposited. 234. For the determination of the controversy in this writ petition, in the backdrop of the questions of law which we have answered above, it would suffice to note that answers to question nos. (e) and (f) would govern the facts of the case. Undisputedly, the petitioners do not claim to have registered the security interest with CERSAI. The contention of Mr. Narula that the mortgage deed was registered under the Registration Act and hence the same would amount to sufficient compliance for the purposes of the SARFAESI Act has been countered by Ms. Jeejeebhoy, as noted above. We are in agreement with her that the deeming provision under section 20A comes into effect only after integration of certain registration systems with the Central registry and that such integration has to be notified by the Central Government. We have not been shown that steps have been taken in the manner dictated by the statute to enable the petitioner der ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eserve any relief. 240. Since the subject flats were purchased by the petitioners during the pendency of this writ petition, without permission of the Court, we annul the sale and direct that the sale certificates in favour of the petitioners shall stand cancelled. Further, the amount of Rs. 92,09,814/- deposited by the petitioners be returned to them along with interest accrued thereon. Also, it is needless to observe that the rights and liabilities of the parties shall be governed by the law which we have clarified. 241. Subject to the above, the writ petition stands dismissed. (emphasis supplied) 4. Mr. Narula, learned counsel for the petitioners in praying for review of the judgment would contend that the security interest in respect of two flats in question viz. flat Nos. 501 and 503 was in fact registered with the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (hereafter referred to as CERSAI ) as per the requirement of the provisions of Section 26B under Chapter IV-A of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereafter referred to as SARFAESI Act ). His contention is tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade against the petitioner. She submits that the contentions as urged on behalf of the petitioner needs to be rejected, taking into consideration the clear observations made by the Court, considering the facts of the case even otherwise than the petitioner having CERSAI registration. To this effect, she has drawn the Court s attention to the observations of the Court in paragraph No. 237 of the judgment (supra), in which it is clearly observed that even otherwise the situation would be governed by the determination as rendered by the Court in paragraph No. 154 of the decision as there was material to indicate that the action of sale proclamation initiated by the respondents was preceded by notice under Section 178 of the Maharashtra Land Revenue Code, warrant of attachment under Section 267(3), order of attachment in Form 4 and auction proclamation notice in Form 7 under the Maharashtra Realisation of Land Revenue Rules. It is her submission that considering the glaring facts of the case and observations made by the Court in paragraph Nos. 238 to 240, certainly a review petition on such grounds is not maintainable. It is submitted that moreover to seek review of the judgment would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en an attachment and a proclamation thereof has been made according to law prior to 24th January 2020 or 1st September 2016, i.e., the dates on which Chapter IV-A of the SARFAESI Act and section 31B of the RDDB Act, respectively, were enforced, the department may claim that its dues be paid first notwithstanding the secured dues of the secured creditors; but in the absence of an order of attachment being made public in a manner known to law, i.e., by a proclamation, once Chapter IV-A of the SARFAESI Act or section 31B, as the case may be, has been enforced, the dues of the secured creditor surely would have priority . In other words, if the immovable property of the defaulter is shown to have been attached in accordance with law prior to Chapter IV-A of the SARFAESI Act, or for that matter section 31B of the RDDB Act, being enforced, and such attachment is followed by a proclamation according to law, the priority accorded by section 26E of the former and section 31B of the latter would not get attracted. 8. It is thus clear that the entire procedure as known to law has been followed by the respondent/Sales Tax Department as observed and accepted by the Court. Moreso having already ..... X X X X Extracts X X X X X X X X Extracts X X X X
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