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2020 (5) TMI 691 - KERALA HIGH COURTDenial of Predominance over the statutory charge due to Government - Whether a secured creditor can claim priority for sale and payment over statutory charge holders, due under State enactment? - SARFAESI Act and the RDB Act - HELD THAT:- The SARFAESI Act and the RDB Act are Central enactments while the KVAT Act is a State enactment. The effect of inconsistency between a Central enactment and State enactment is resolved by recourse to Art. 254(1) and Art. 246 of the Constitution of India. Art. 254(1) deals with the Parliamentary supremacy in matters in which Parliament is competent to enact. Competence to enact a law is as specified under Art. 246. Supremacy of Parliament will be maintained irrespective of any conflict between matters in which both Centre and the State can enact on a subject matter - as per Article 254, the Central law will prevail, subject of course to the provisions in Art. 254(2). If a provision of law contained in the Concurrent list is made by the State legislature and receives assent of the President, then such a State enactment will prevail. The intention of the Constitution makers is evident that there must be uniform application of laws throughout the territory of India and in the event of any inconsistency between the Central law and the State law, the former alone shall be operative. When the inconsistency between the provisions of a Central Act and a State Act is of such a nature that they come into direct collision with each other, and it is impossible to comply with one without disobeying the other, a clear case of repugnancy arises. Repugnancy may also arise between the two enactments, even though obedience to each of them is possible without disobeying the other, if the competent Legislature of superior efficacy, expressly or impliedly evinces by the legislation, a clear intention to cover the whole field - it can safely be concluded that the provisions of SARFAESI Act and RDB Act (as amended) containing provisions commencing with non-obstante clauses and giving specific priority to secured creditors even over the taxes due from the Governments, will prevail over the KVAT Act. The sale carried out either under the SARFAESI Act or under the RDB Act takes precedence over the statutory charges due to the Government created under KVAT Act or under other State Enactments after the Amendment Act of 2016. A secured creditor in whose favour a security interest has been created thus has priority in sale and payment over all other statutory charge holders. The 2nd respondent Sub Registrar, Kottarakkara is directed to register the original of Annexure-A4 sale certificate as and when the same is presented for registration - Application allowed.
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