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TMI Blog2010 (8) TMI 823X X X X Extracts X X X X X X X X Extracts X X X X ..... de. Accordingly it is set aside. The writ petition is allowed. - W.P. (MD) No. 1829 of 2007 - - - Dated:- 12-8-2010 - MANIKUMAR S. , J. ORDER:- S. MANIKUMAR J. Auction notice, dated February 7, 2007, issued by the Assistant Commercial Tax Officer, Thiruppathur, Karaikudi has been challenged, inter alia, on the ground that the Central Bank of India, Karaikudi Branch, the petitioner herein has sanctioned loan to the second respondent to construct a factory and purchase of new and second hand machineries besides meeting out their working capital requirements. According to the petitioner, loan was sanctioned on various dates and as on May 17, 2001, the outstanding amount due and payable by the second respondent was Rs. 1,83,48 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contention of the petitioner that the commercial tax authority has not initiated any assessment proceeding prior to the mortgage and therefore, the first respondent cannot claim any charge over the property unless a valid assessment has been made for the relevant period of time. In support of the contention that bank debts will have charge, over crown debt, learned counsel for the petitioner relied upon the decisions of the Division Bench of this court in Indian Bank, rep. by Authorised Officer, Vellore Circle Office v. Commercial Tax Officer, Office of CTO, Navalpur, Ranipet reported in [2009] 25 VST 187; [2009] 6 MLJ 659 and in M. Nagarajan v. Deputy Commercial Tax Officer and State of Tamil Nadu rep. by Secretary, Commercial Taxes De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Comp Cas 531 (SC); JT [2009] 1 SC 87 and in M. Nagarajan v. Deputy Commercial Tax Officer and State of Tamil Nadu rep. by Secretary, Commercial Taxes Department reported in [2009] 25 VST 175 (Mad) and at paragraph Nos. 16, 17, 18 and 19 of MLJ (paragraphs 18 to 21 of 25 VST 187) of this court held as follows: 16. It is not in dispute that the bank is a 'secured creditor' within the meaning of section 2(zd) of the SARFAESI Act, 2002. It has 'secured interest' over the secured asset. Section 2(zc) defines 'secured asset' as property on which security interest is created. Security interest is defined under section 2(zf), as right, title and interest of any kind whatsoever upon property, created in favour of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of article 372 of the Constitution of India, then only the State can claim priority over an unsecured debt.' 19.. This apart, the assets being secured assets with the bank, having its secured interest over the property, the bank being a secured creditor and its debt being a secured debt, we hold that the principle of first charge/priority of State over the property will not be applicable in the present case. . . In this context, useful reference can be made to the decision of the Full Bench of this court in UTI Bank Ltd. v. Deputy Commissioner of Central Excise, Chennai 2 reported in [2007] 1 LW 50 wherein it has been held as follows: 26. In the light of the above discussion, we conclude, '(i) Generally, the dues t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Constitution of India. (iii) The doctrine will not apply if first charge by way of priority is not claimed under the statute. (iv) The doctrine of first charge/priority of the State over the property will prevail over the private debts, which is an unsecured debt, but such doctrine of first charge/priority over the property cannot prevail over secured debts of a person. If the statute permits to have first charge/priority over the property having regard to the plain meaning of article 372 of the Constitution of India, then only the State can claim priority over an unsecured debt'. It is seen from the order dated February 11, 2010 made in S.L.P. Nos. 1838 and 1908 of 2010 both the Division Bench judgments cited supra were taken ..... X X X X Extracts X X X X X X X X Extracts X X X X
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