TMI Blog1994 (12) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... er all other charges on the property including a mortgage. The submission, therefore, that the statutory first charge created by section 11AAAA of the Rajasthan Sales Tax Act can operate only over the equity of redemption, cannot be accepted. The charge operates on the entire property of the dealer including the interest of the mortgagee therein. We, therefore, agree with the conclusion arrived at by the High Court. The appeal is, therefore, dismissed - Civil Appeal No. 9161 of 1994 - - - Dated:- 14-12-1994 - Judge(s) : S. C. AGARWAL., FAIZAN-UD-DIN., MS. SUJATHA V. MANOHAR JJ. JUDGMENT V.M. Tarkunde, Senior Advocate (Anil Kr. Sangal and K.K. Gogna, Advocates, with him), for the appellant. V.R. Reddy, Additional Solicitor-Ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aded in the suit on May 18, 1990, on the ground that he had a prior claim for the recovery of a sum of Rs. 1,19,122 as sales tax dues from respondent No. 1 and was entitled to realise it by sale of the mortgaged property. The property which is the subject-matter of the mortgage has been sold by auction under the orders of the court for a sum of Rs. 4,02,000 to one Smt. Kamlesh Goel. Under the orders of the court the sale proceeds have been deposited in court. It was contended by the Commercial Taxes Officer, Bharatpur, that the sales tax dues of the first respondent were liable to be paid first out of the sale proceeds. The claim of the appellant-bank could be satisfied only out of the balance amount. The trial court by its judgment and o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AA of the Rajasthan Sales Tax Act, 1954, on an existing mortgage in respect of the property of the dealer or the person liable to pay sales tax or other sums under the Rajasthan Sales Tax Act, 1954. Section 100 of the Transfer of Property Act deals with charges on an immovable property which can be created either by an act of parties or by operation of law. It provides that where immovable property of one person is made security for the payment of money to another, and the transaction does not amount to a mortgage, a charge is created on the property and all the provisions in the Transfer of Property Act which apply to a simple mortgage shall, so far as may be, apply to such charge. A mortgage, on the other hand, is defined under section 58 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an earlier mortgage. It was urged by Mr. Tarkunde, learned counsel for the appellant-bank, that at the time when the statutory first charge came into existence, there was already a mortgage in respect of the same property. Therefore, the only property which was possessed by the dealer and/or person liable to pay tax or other dues under the Rajasthan Sales Tax Act, was the equity of redemption in respect of that property. The first charge would operate, therefore, only on the equity of redemption. The argument, though ingenious, will have to be rejected. Where a mortgage is created in respect of any property, undoubtedly, an interest in the property is carved out in favour of the mortgagee. The mortgagor is entitled to redeem his property o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, i.e., on the equity of redemption. The court negatived this contention. It held that the "charge on the land" imposed for an unpaid surcharge was not confined to a charge on the owner's interest in the premises when the charge arose, but extended to a charge on all the estates and interests in the premises existing when the charge arose. The rating authority's charge would have priority over the bank's interest as a mortgagee. In the present case, the section creates a first charge on the property, thus clearly giving priority to the statutory charge over all other charges on the property including a mortgage. The submission, therefore, that the statutory first charge created by section 11AAAA of the Rajasthan Sales Tax Act can operate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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