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TMI Blog2021 (6) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... deration by the Full Bench in the case of Assistant Commissioner (CT), Anna Salai-III Assessment Circle Vs. Indian Overseas Bank [ 2016 (12) TMI 373 - MADRAS HIGH COURT] and it was held that the secured creditor namely the Bank will have precedence over the dues payable to the Commercial Tax Department. The Sub Registrar has to necessarily delete the schedule mentioned property attachment reflected in the encumbrance certificate at the instance of the commercial tax department. In the result, the writ petition is allowed. It is made clear that though the attachment at the instance of the first respondent Commercial Tax Department has been directed to be deleted, it will not in any manner affect the department's right to collect the dues from the default assessee by proceeding in accordance with law - Petition allowed. - W.P.(MD)No.12643 of 2020 And W.M.P(MD)No.10773 of 2020 - - - Dated:- 15-4-2021 - THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM AND THE HONOURABLE MRS.JUSTICE S.ANANTHI For Petitioner: Mr.N.Dilip Kumar For Respondent: Mr.K.P.Krishnadass, Special Government Pleader, Mr.K.Sathiya Singh, Additional Government Pleader And Mr.D.Stanley David OR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .~627, in the case of D.Senthil Kumar and others v. Commercial Tax Officer, Brough Road, Erode and another; ix) (2007) 1 MLJ 1, in the case of UTI Bank Ltd., Chennai v. Deputy Commissioner of Central Excise, Chennai II Division, Chennai and another; x) (2016) 6 CTC 769, in the case of Assistant Commissioner (CT), Anna Salai III Assessment Circle v. Indian Overseas Bank, Central Office and another; xi) 2016 SCC OnLine Mad 18565, in the case of Ansari v. Commercial Tax Officer, Koyambedu Assessment Circle, Chennai and another; and xii) 2016 SCC OnLine Mad 33329, in the case of State Bank of India v. Assistant Commissioner (CT), Puraswalkam Assessment Circle, Chennai. 6.Mr.H.Velavadhas, learned Counsel appearing for the 9th respondent in W.P. (MD)No.6976 of 2020, who is arrayed as 8th respondent in W.P.(MD)No.1101 of 2021, submitted that the writ petition is not maintainable. The petitioner Bank indirectly seeks to set aside the interim order passed by the Arbitration Tribunal. There is a non~compliance of the mandate and the only remedy open to the petitioner is to challenge the interim order passed by the Arbitration Tribunal in the manner known to law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered, then the very act of recording the said interim order of attachment passed by the Tribunal itself ought not to have been done, as there was a subsisting mortgage on that date. 11.The learned Counsel appearing for the 9th respondent in W.P.(MD)No.6976 of 2020 / 8th respondent in W.P.(MD)No.1101 of 2021 submitted that there is a procedure violation. We are not concerned with the said issue. The question for consideration is as to whether the earlier mortgage would prevail as against the subsequent interim attachment. The question of procedural violation can only be raised by the borrower, who did not do so. Therefore, the said contention has got no relevance to the case on hand. 12.The submission made on the maintainability of the writ petitions is also rejected. We are not on the merits of the order passed by the Arbitration Tribunal, which is by way of an interim measure. The question is with regard to the upholding of one-s own existing right, which is prior to the loan given by the 9th respondent in W.P.(MD)No.6976 of 2020 / 8th respondent in W.P.(MD)No.1101 of 2021, in favour of the borrowers. Certainly, a mortgage deed creates right over the properties mention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urity Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016, Section 41 of the same seeking to introduce Section 31B in the Principal Act, which reads as under:- ''31B.Notwithstanding anything contained in any other law for the time being in force, the rights of secured creditors to realise secured debts due and payable to them by sale of assets over which security interest is created, shall have priority and shall be paid in priority over all other debts and Government dues including revenues, taxes, cesses and rates due to the Central Government, State Government or local authority. Explanation. - For the purposes of this section, it is hereby clarified that on or after the commencement of the Insolvency and Bankruptcy Code, 2016, in cases where insolvency or bankruptcy proceedings are pending in respect of secured assets of the borrower, priority to secured creditors in payment of debt shall be subject to the provisions of that Code.'' 3.There is, thus, no doubt that the rights of a secured creditor to realise secured debts due and payable by sale of assets over which security interest is created, would have prio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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