Auction purchaser entitled to get clear title of secured asset free from encumbrance: Bombay HC

Canara Bank Vs Deputy Commissioner Sales Tax Office (Bombay High Court) Bombay High Court held that secured creditors have a clear priority over the dues of the State as per Section 26E of the SARFAESI Act. Thus, clear title must pass to auction purchaser and State cannot be allowed to continue its encumbrance upon secured asset sold. Facts- The Respondent No. 3-borrower company had availed credit facility from the Petitioner-bank and had executed documents creating security interest over the secured asset. On 09/07/2011, the Petitioner recorded its charge over the secured asset with CERSAI in...