Case Law Details
Central Bank of India Vs State of Himachal Pradesh & Ors. (Himachal Pradesh high Court)
The recent judgment by the Himachal Pradesh High Court in the case of Central Bank of India vs. State of Himachal Pradesh & Ors. sheds light on the priority and preference of a secured creditor, in this instance, a nationalized bank, over other claimants, particularly government departments seeking recovery of dues. The case involves the interpretation and application of relevant provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) and their interaction with other laws.
Background and Facts
Loan and Mortgage: The petitioner, Central Bank of India, extended a cash credit loan of Rs. 2.50 Crores to Sh. Amit Kumar Sharma, who mortgaged a semi-furnished flat in Shimla as collateral for the loan. When Sharma failed to repay the loan, the bank declared the account as non-performing (NPA) and initiated proceedings under the SARFAESI Act.
SARFAESI Act Proceedings: Under the SARFAESI Act, the bank took possession of the mortgaged property and put it up for auction. The property was eventually sold through e-auction on January 15, 2021, and a sale certificate was issued in favor of Sh. Vishal.
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