2011 (12) TMI 203

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..... arge over the property must be held to prevail over the Crown debt which is an unsecured one. It is not a case of transfer of business or trade, but transfer of property under compulsory sale of the property through auction by the financial institution in exercise of powers under the SARFAESI Act therefore, Proviso to section 11 would not attract. Hence, charge of the Central Excise Department cannot survive and must be ordered to be deleted.
Akil Kureshi, Sonia Gokani, JJ. Bharat T. Rao for the Appellant Y.N. Ravani and S.S. Panesar for the Respondent JUDGEMENT Akil Kureshi: Petitioner has prayed for quashing and setting aside the mutation entry in the revenue records i.e. village form No.7/12, in land bearing survey No.109/3 p .....

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..... he Central Excise Department had entered its charge. It was recorded that the Central Excise Department had to recover certain dues from the erstwhile owner M/s.Shree Sanand Textile Industries Pvt. Ltd. The petitioner has produced a copy of village form which records that Superintendent, Central Excise Range, Sanand-I, as per its letter dated 29.11.05 dues of Central Excise duty is Rs.11,57,000/-. 4. Upon learning about the said charge of the Central Excise Department, the petitioner issued notice to respondent No.1 and 2 on 16.6.07 pointing out that the land in question was mortgaged to Dena Bank. Since the mortgagee did not repay the Bank's dues, under the provisions of the SARFAESI Act, the land was sold by Dena Bank in public auction. .....

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..... rd the learned counsel for the parties and having perused the documents on record, the issue is no longer debatable. In the case of Sicom Limited (supra), the Apex Court held that the debt which is secured or which by reason of the provisions of a statute becomes the first charge over the property must be held to prevail over the Crown debt which is an unsecured one. In the said case, the Apex Court was also concerned with the Central Excise Department over the debt of the State Financial Corporation under the State Financial Corporations Act. 7.1 In the case of Kotak Mahindra Bank (supra), a Division Bench of this Court was concerned with the dues of the Central Excise Department vis-a-vis the debts of the secured creditor being financia .....

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