The Bombay High Court in the case Ronak Industries Versus Assistant Commissioner observed and has held that the priority belongs to the secured creditor in respect of the dues of the Central government, the state government, or the local authority as stated under Section 26-E of the SARFAESI Act, 2002.
The bench comprising of Justice B. P. Colabawalla and Justice M.M. Sathaye in the case observed and has stated that the statute goes quite far, and it is not only revenues, taxes, cesses, and other rates payable to the State Government or any local authority but also those which are payable to Central Government that would have to stand in the queue after the secured creditor for payment of its dues.
The petitioner in the plea seek the directions in order to remove the lien, charge, encumbrance or the mutation entry of the Assistant Commissioner in respect of the Secured Asset. The petitioner also seek direction from the Sub Registrar to accept and to register the document of sale or sale certificate issued by The Bank of Baroda in favour of the Petitioner.
Further, the petitioner came to know about the Secured Asset through the Free Press Journal newspaper, in which the Sale Notice was published for the sale of the Secured Asset under the provisions of the SARFAESI Act.
However, the Bank of Baroda has sold the Secured Asset under the provisions of the SARFAESI Act and it has been stated that as per Section 26 E, a Secured Creditor who has registered the security interest or another creditor who has registered the attachment order in his favour with CERSAI shall have priority over the claims of other creditors having a subsequent security interest created over the property in question. Therefore, the mortgage of the Secured Asset was created in favour of the Bank of Baroda by one Mr. Prem Prakash Sarogi on 14.12.2007 for securing an aggregate loan limit for an amount of Rs. 809 lakhs which is granted to M/s Goldstar Polymers Ltd. i.e., the borrower.
The Bank of Baroda in the case registered its security interest over the Secured Asset on CERSAI on 24.02.2012 and has also filed the CERSAI report downloaded from the website portal of CERSAI.
Further, the petitioner also contended in the plea that as the government department has not registered their claim or attachment order with CERSAI, the government department cannot claim priority over the dues of the Bank of Baroda.
The court in the case observed and has also relied upon the decision of the division bench in the case Jalgaon Janta Sahakari Bank Ltd. and Anr. v. Joint Commissioner of Sales Tax, wherein the court held that since the government dues have not registered their claim or attachment order with CERSAI, government dues cannot claim priority over dues of the Bank of Baroda. The counsel, Savita Nangare appeared for the petitioner
The counsel, J.B. Mishra represented
the respondent.
