Bank of Baroda Vs Assistant Commissioner of Sales Tax (Bombay High Court)
The Bombay High Court considered a writ petition filed by Bank of Baroda under Article 226 of the Constitution of India seeking to quash the order dated 18 March 2020 passed by the Assistant Commissioner of Sales Tax attaching a secured asset and to set aside the department’s charge over the said asset. The attachment order restrained the borrower, Haresh Dharmani, Proprietor of M/s. Gajanan India Chemco, from transferring or creating any charge over the scheduled property. A copy of the attachment order had also been marked to the Bank.
The Bank stated that it was a secured creditor under Section 2(1)(zd) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). It had sanctioned various credit facilities to the borrower between September 2009 and 2012. The borrower created a first mortgage over the secured asset in favour of the Bank on 29 November 2010, which was subsequently extended on 10 October 2012. The Bank registered its security interest with the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) on 30 June 2012. The borrower’s account was declared a Non-Performing Asset on 31 March 2013. A demand notice under Section 13(2) of the SARFAESI Act was issued on 23 September 2013, and after the borrower failed to repay the dues, the Bank took symbolic possession of the secured asset on 22 September 2014.
