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TMI Blog2024 (4) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of Security Interest Act, 2002 (SARFAESI Act) as amended from time to time? HELD THAT:- In Central Bank of India s case [ 2009 (2) TMI 451 - SUPREME COURT] , it was held by the Supreme Court that charge created in favour of State under the provisions of General Sales Tax Act in respect of sales tax dues prevailed over the charge created in favour of the Bank in respect of loan taken by a person/Firm/Company and the amendment made in the State operated in respect of charge that were in force on the date of introduction of Section 33-C of Madhya Pradesh General Sales Tax Act, creating first charge in favour of the State. After incorporation of Section 31-B in RDB Act, High Court of Kerala has decided similar issue in a petition State Ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NGH THAKUR, AND HON BLE MR. JUSTICE SANDEEP SHARMA For the Appellants: Mr. Rakesh Sharma, Advocate. For the Respondents: Nemo VIVEK SINGH THAKUR, J. This appeal has been preferred by the State of Himachal Pradesh against judgment dated 11.05.2023 passed in CWP No. 2719 of 2022, titled as Himanshu Prashar vs. Punjab National Bank others, and other connected matters, whereby writ petition preferred by respondent No. 1-petitioner Himanshu Prashar, praying for quashing the entries in revenue record as depicted in Nakal Jamabandi for the year 2016-2017 (Annexure P-5 of CWP No. 2719 of 2022) has been allowed by referring judgment passed in Civil Appeal No. 2169 of 2012 , titled as Punjab National Bank vs. Union Bank of India others, reported in ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Himachal Pradesh Value Added Tax Act, 2005 (hereinafter referred to as H.P. VAT Act, 2005 ) first charge was created in favour of State on the property of M/s Gilvert ISPAT Pvt. Ltd. purchased by respondent No. 1-petitioner Himanshu Prashar, and thus, priority has to be given to the statutory charge over all other charges on the property including mortgage. 4. Perusal of Jamabandi (Annexure P-5) depicts that vide Rapat No. 231, dated 18.03.2015 charge was created in favour of Excise and Taxation Department on the property owned by M/s Gilvert ISPAT Pvt. Ltd., for outstanding arrears of Rs. 50,35,56,792/-. It is also noticeable that prior to that vide Rapat No. 171, dated 29.01.2015 entire property was attached in favour of respondent No. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B. Priority to secured creditors.- 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. 34. Act to have overriding effect. ( 1) Save as provided under sub-section (2), the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hers, WP (C) No. 28316 of 2016 and other connected matters, vide judgment dated 30.07.2019 holding that secured creditor under Section 26E of the SARFAESI Act and Section 31B of the RDB Act, obtains priority over the right claimed by the Revenue both in proceeding against the properties in question or in recovering the secured debt. 11. In Central Bank of India s case, matter was decided by noticing absence of any specific provision in either of the Central enactments containing a similar/parallel provision of a first charge in favour of the bank as was there in State enactments creating first charge in favour of the State. This judgment was passed on the basis of provisions prevailing at that point of time. Now by insertion of Section 31-B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No doubt, in Punjab National Bank s case, issue was decided by holding that in absence of any provision creating any first charge over the property the State debt was not to have priority over the claims of the secured creditors. However, in present case, though there is provision under VAT Act, creating first charge in favour of the State debt, but at the same time there are provisions of Section 26E in SARFAESI Act and Section 31-B in RDB Act and in such a situation provisions of Central Act will prevail entitling the bank to have priority to recover. 17. In similar matters a Coordinate Division Bench of this High Court dismissed the appeals of the State of Himachal Pradesh in LPA No 156 of 2021 alongwith LPAs No. 158, 159, 161, 163, 164 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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