Bank debts has priority over other debts/ taxes payable to State Government

Ambica Buildcon Vs Recovery Officer I (Gujarat High Court)

Gujarat High Court held that the debts due to Bank – a secured creditor shall be paid in priority over other debts/taxes payable to the State Government.

Facts- The petitioner purchased the said property in the said public e-auction conducted by respondent no.1 for a sale consideration of Rs.13,75,00,000/- and the respondent no.1 issued a sale certificate in favour of the petitioner.

The petitioner was made aware by respondents No.1 and 2 that the claim of the banks dues are prior to the State dues as per Section 31-B of the RDDBI Act. Thereafter, on 31.05.2022, respondent No.1 issued sale certificate.

There is a revenue entry being Entry No.6209 of the year 2018 which pertains to the charge created by the State Tax Department qua the land in question.

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