Superintendent Central Excise & Customs Vs Kotak Mahindra Bank Ltd. (Supreme Court)
There is little doubt that the situation that emerges is a creation of a secured debt in favour of the State Bank of India on 24.06.1985 and thereafter the transfer of the debt to the respondent Bank. It is the original date of creation of the security which is of relevance.
It is not possible for the appellant to plead that they have crown debt which would take precedence over a secured liability and fairly, the learned Additional Solicitor General does not even seek to contend it.
We find that given the aforesaid position, there is no need to go into other issues sought to be raised by either of the parties before us or through the impugned judgment but suffice to say that the respondent Bank cannot be prevented from exercising its rights as a secured creditor on the pretext that there is a debt to the Excise Department arising from the confiscation order dated 25.02.2006.
We may further observe that on realization of the dues of the Bank, if amounts are still left, those amounts can be utilized to satisfy the dues of the Excise Department and naturally, if there are still amounts left, the debtor would be the beneficiary of the same. All we can say is that possibly the passage of time may have resulted in real estate escalation which may in turn result in satisfaction of everybody’s claim! That is the only positive aspect of this long prolongation of dispute of over a decade.
