Indian Bank Thr. Chief Manager Vs State of Maharashtra & Ors. (Bombay High Court)
Bombay High Court held that security creditor who has registered its claim against secure assets with the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) has priority over other debts. Thus, Sales Tax Authorities cannot claim priority over the dues payable to the secured creditor, whose security interest is registered with CERSAI.
Facts- The petitioner is a bank who extended credit facilities to Respondent (M/s. Anupama Enterprises). The credit facilities offered were secured via creating equitable mortgages in respect of three residential flats. As the borrower failed to maintain the loan account, the petitioner declared the account as NPA and took action under SARFAESI Act.
The Respondent No.2, addressed communication to Petitioner Bank informing that there were arrears of sales tax for the period of 2010 – 2011 to 2015-2016 and a further arrears of sales tax during the period 2011-2012 to 2015-2016. The Respondent no.2 (The Deputy Commissioner of Sales Tax) by its notice sought documents pertaining to two mortgaged properties. The Petitioner Bank by its letter dated 18/8/2022 replied to Respondent no.2 (The Deputy Commissioner of Sales Tax) and informed that they have priority charge over the secured assets, being a secured creditor and in case of any residual amount, the same will be handed over to Respondent no.2.
