In Superintendent Central Excise & Customs v. M/S Kotak Mahindra Bank Ltd. and Anr. [Civil Appeal Nos. 6900-6901/2011 dated August 12, 2021], the current appeal has been filed after a decade since the last order dated January 03, 2011 by the Revenue to recover its dues from the property whose rights were given to M/S Kotak Mahindra Bank Ltd. (“the Respondent”) under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“the SARFAESI Act”).
The Respondent was made a secured creditor of M/s Amod Petrochem Private Limited when it fell into a difficult financial position. While the Respondent’s debt was crystallized and steps were taken for attachment of properties under Section 14 of SARFAESI Act. On the other hand, the Excise Department raised demands for evasion of duty from M/s Amod Petrochem Private Limited.
The matter went to the Hon’ble Supreme Court of India wherein a Single Judge bench vide its order dated September 17, 2010 allowed the Appeal in favour the Respondent with regard to nature, title and possession in respect of the immovable property. The matter has thereby been brought up again from the side of the Revenue since the last order dated January 03, 2011 wherein leave was granted to the Respondent.
The Hon’ble Supreme in the current matter observed that there was indeed a creation of a secured debt in favour of the State Bank of India which was later transferred to the Respondent. Noted, the Respondent cannot be prevented from exercising its rights as a secured creditor on the pretext that there was a debt to the Excise Government arising from a confiscation order.
Further noted that in case there is any amount left after the realisation of the dues of the Respondent, that surplus fund can further be utilized to satisfy the dues of the Department. Also remarked, since it has been a decade there would have been a real estate escalation of the Immovable property at hand which may in turn result in satisfaction of everybody’s claim i.e the Department as well as the Respondent.
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