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TMI Blog2019 (5) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961 - HELD THAT:- The properties which the petitioner bank has sold under the Securitization Act, are that of third party guarantors. If the petitioner bank has sold or attempting to sell the properties of the 5th respondent company, then what the learned Senior Standing Counsel for the Income Tax Department contends may be right. The properties of a company ordered to be wound up under the provisions of the Insolvency and Bankruptcy Code, 2016, cannot be brought to sale by the bank under the Securitization Act. But when the properties sought to be sold are that of third party guarantors, the said impediment cannot stand in the way of the bank. The action of the Sub-Registrars, who are respondents 6 to 10, in refusing to register the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Directorate and the learned Government Pleader appearing for respondents 6 to 10. 3) It appears that the 5th respondent-company availed credit facilities from the petitioner-bank and other banks which formed a consortium, to the extent of about 720 crores during the period from 2006 to 2014. The loan accounts became non-performing assets in August, 2015 and hence measures under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the Securitization Act ) were initiated. 4) A demand notice under Section 13 (2) of the Securitization Act was issued on 24.08.2016 followed by possession notices issued on various dates, both in respect of the proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14-2015. Therefore, the Tax Recovery Officer pitches his claim for priority on the basis of Section 281 of the Income Tax Act, 1961. In other words the claim of the Tax Recovery Officer is that the very creation of the mortgage, during the pendency of the assessment proceedings, is null and void in view of Section 281 of the Income Tax Act, 1961. 9) But the very same issue as to whether a mortgage created during the pendency of the assessment proceedings would automatically become null and void under Section 281 of the Income Tax Act, 1961, came up for consideration before a Bench of this Court to which one of us (VRS, J) was a party. By a judgment dated 04.12.2018 rendered in W.P.No.33417 of 2018, the Bench of this Court he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld are that of third party guarantors, the said impediment cannot stand in the way of the bank. 12) In view of the above, the action of the Sub-Registrars, who are respondents 6 to 10, in refusing to register the sale deeds, in view of the orders of attachment passed by the 2nd respondent Tax Recovery Officer, is not in accordance with law. The properties which belong only to third party guarantors, which do not form part of the proceedings before the National Company Law Tribunal, can always be sold by the bank and the attachment orders which are issued by the 2nd respondent after creation of mortgage cannot bind. 13) Hence, the Writ Petition is disposed of, directing respondents 6 to 10 to proceed with the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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