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TMI Blog2024 (8) TMI 1271X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Full Bench of this Court in Jalgaon Janta Sahakari Bank Ltd. and Anr. [ 2022 (9) TMI 163 - BOMBAY HIGH COURT] . After considering the provisions of the Code as well as the Rules of 1967 along with other relevant provisions, it was held that ' if the immovable property of the defaulter is shown to have been attached in accordance with law prior to Chapter IV-A of the SARFAESI Act, or for that matter Section 31B of the RDDB Act, being enforced, and such attachment is followed by a proclamation according to law, the priority accorded by Section 26E of the former and Section 31B of the latter would not get attracted.' In the light of the aforesaid law it would be necessary to consider as to whether the Sales Tax Department has undertaken the attachment of the secured assets in the manner prescribed by the Code and the Rules of 1967. In the affidavit-in-reply filed on behalf of the Sales Tax Department it has stated that notices under Section 38 of the Act of 2002 came to be issued on 22nd July 2013 - Since the steps for attachment were taken prior to the provisions of Section 26E being brought on the statute book, the Sales Tax Department had the necessary priority t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -Official Liquidator. In the meanwhile on 7th September 2013, the 2nd respondent Sales Tax Department issued a communication to the Talathi, Asangaon, Taluka Shahapur, District Thane stating therein that the Department proposed to take steps for recovering its dues from the borrower. Hence, a request was made that without obtaining the no objection of the Sales Tax Department, sale of the properties may not be permitted. Since the creditor faced difficulties in recovery of its dues, it issued communications dated 26th July 2017 and 2nd August 2017 to the Tahsildar and Sales Tax Officer respectively calling upon them to withdraw the communication dated 7th September 2013. There being no response to the said request, the creditor has filed this writ petition under Article 226 of the Constitution of India praying that the attachment / prohibition imposed on the said properties at the behest of the Sales Tax Department to be raised / set aside. 3. Mr. O.A. Das, the learned counsel appearing for the creditor submitted that the communication dated 7th September 2013 issued by the Sales Tax Department merely made a request to the Talathi not to permit sale of the secured assets which comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d notices were issued to the borrower for recovery of sales tax dues for the financial years 2005-06 to 2010-11. It is in that context that communication dated 7th September 2013 came to be issued by the Assistant Commissioner of Sales Tax to the Talathi, Asangaon, Taluka Shahapur, District Thane in which it was stated that the Sales Tax Department had initiated proceedings for recovery of its arrears. The Sales Tax Department intended to attach the properties of the borrower after the liability in that regard was fixed. Hence, it was directed that without obtaining the No Objection Certificate of the Sales Tax Department, no transaction seeking to transfer title be accepted. It was submitted that besides aforesaid communication, the Sales Tax Department also addressed communications to the Tahsildar as well as the Official Liquidator in that regard. Reference was made to the provisions of Sections 33 and 34 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act of 2002 ( Securitization Act ). The learned counsel further submitted that Section 26E of the Securitization Act was brought into force from 1st September 2016 which was after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es before the property attached is sold. 154. We are of the considered opinion, on facts and in the circumstances, that unless attachment of the defaulter s immovable property is ordered in the manner ordained by the MLR Code and as prescribed by the MRLR Rules and due proclamation thereof is made, even the creation of charge on such immovable property may not be of any real significance, not to speak of demonstrating with reference to evidence that the transferee had actual or constructive notice of such charge. If there has been an attachment and a proclamation thereof has been made according to law prior to 24th January 2020 or 1st September 2016 i.e. the dates on which Chapter IV-A of the SARFAESI Act and Section 31B of the RDDB Act, respectively, were enforced, the department may claim that its dues be paid first notwithstanding the secured dues of the secured creditors; but in the absence of an order of attachment being made public in a manner known to law i.e. by a proclamation, once Chapter IV-A of the SARFAESI Act or Section 31B, as the case may be, has been enforced, the dues of the secured creditor surely would have priority . In other words, if the immovable property of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d creditors in view of Section 26E of the Securitization Act. Mere issuance of communication to the Talathi not to permit sale of a secured assets would be of no consequence as the law requires passing of a valid order of attachment and issuance of a proclamation in accordance with the Rules of 1967 to claim priority. We therefore find that the communication dated 7th September 2013 issued by the Sales Tax Department to the Talathi would not come to its aid for seeking preference with regard to the secured assets. In view of what has been laid down in paragraphs 153 and 154 of Jalgaon Janta Sahakari Bank Ltd. and Anr. (supra), the secured creditor is entitled to succeed. 8. It may be noted that during pendency of the present proceedings, Interim Application (Stamp) No.92490 of 2020 was moved by the Bank seeking permission to withdraw the amount of Rs. 2,20,10,000/- with accrued interest in view of the sale of secured assets that was undertaken pursuant to the order dated 25th April 2018 passed in the writ petition. By the said order the Bank was directed to deposit the sale proceeds in this Court. The aforesaid amount has accordingly been deposited. Since it is found that the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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