On July 7, 1951, a charge was created by a decree in favour of respondent No.15 for a sum of Rs.59,521/11/ .
The bank relied on the decisions of this Court in A.P. State Financial Corporation v. Official Liquidator 2000 7 SCC 291 and Allahabad Bank v. Canara Bank and another 2000 4 SCC 406, and pleaded that being a Central legislation, the DRT Act would prevail over the Kerala Act by which first charge was created in favour of the State.
As the borrower failed to repay the dues, the bank filed civil suit bearing O.S. No.234/1996 in the Court of Sub Judge at Mavelikara.
On account of the borrowers failure to repay the loan amount, the bank filed O.S. No.
In the meanwhile, Tehsildar, Ottapalam issued numberice under Section 49 2 of the Kerala Revenue Recovery Act on 2.6.1999 for sale of the mortgaged properties for recovery of sales tax dues amounting to Rs.85,45,276/ .
When the department expressed its intention to attach and seize the properties of respondent number2, the first respondent informed that it had first charge over the mortgaged properties.
After 8 years, the bank filed S. No.720 of 1992 for recovery of amount of loan with interest.
Later on the suit was transferred to Ernakulam Bench of the Debts Recovery Tribunal hereinafter referred to as the Tribunal .
The bank also issued recovery certificate dated 1.12.2003.
In the meanwhile, Tehsildar Revenue Recovery issued numberice dated 18.7.2000 under Section 46 of the Kerala Revenue Recovery Act and attached the property of the companypany in lieu of the dues of sales tax.
159/1994 for execution of the decree.
In the auction companyducted by the Recovery Officer, the property of the debtor companypany was auctioned and the sale was companyfirmed.
The second property was number put to auction apparently because the bid given by the appellant satisfied the banks claim.
As a sequel to this, Recovery Certificate dated 1.11.2001 was issued in favour of the bank and the Recovery Officer issued numberice for sale of the movable and immovable properties of the borrower.
The appeal preferred against the order of the learned Single Judge was dismissed by the Division Bench which held that the bank can avail remedy by filing objections under Sections 46 to 48 of the Kerala Revenue Recovery Act, 1968.
Allahabad Bank challenged the order of the learned Company Judge by filing petition for special leave to appeal.
While the proceedings were pending before the Tribunal and the Court of Civil Judge, Fatehpur, the assets of the companypany were sold.
The bank filed suit for injunction bearing OS No.133/1994 with the prayer that State of Kerala and Deputy Tehsildar RR , Ottapalam be restrained from attaching and selling the mortgaged property as described in the schedule attached with the plaint.
Notwithstanding this, the bank filed Execution Petition No.
The Division Bench dismissed the writ appeal.
The learned Single Judge by relying on the judgment of this Court in Dena Bank v. Bhikabhai Prabhudas Parekh Co. supra and of the Division Bench of the High Court in Sherry Jacob v. Canara Bank 2004 30 KLT 1089 dismissed the writ petition.
1 to 7 mortgaged Kakakuva Mansion to plaintiff respondent No.
Ltd. Co. for short the Company .
Thereafter, they filed a darkhast in the Court of the 3rd Joint Civil Judge, Senior Division, Poona for sale of Kakakuva Mansion.
By an order dated 31.12.1998, the Tribunal allowed the application of the bank and issued recovery certificate for a sum of Rs.23,80,430.95.
The bank applied for modification of order dated 22.9.2005 and prayed that it may be permitted to retain the money realized from sale of the mortgaged property.
During the execution proceedings, Tehsildar, Kollam issued numberice to respondent number3 under Section 49 2 of the Kerala Revenue Recovery Act for payment of arrears of sales tax amounting to Rs.1,19,86,461/ .
It also prayed that Section 26A and 26B of the Kerala Act be declared unconstitutional and void being inconsistent with the provisions of the Securitisation Act.
They also created a further charge on September 13, 1949 in favour of plaintiff respondent number 14 for Rs.50,000/ .
On creation of bench of the Tribunal at Cochin, the suit was transferred to the Tribunal, which passed decree dated 17.2.2000 for a sum of Rs.41,25,451.64 with interest at the rate of 15 per annum from 24.8.1992.
The petitioner challenged the sale numberices issued by Tehsildar in Writ Petition No.13425 of 2004.
Later on, the executing companyrt held that presence of plaintiff respondent number14 was number necessary.
The facts of that case were that respondent number2 borrowed a sum of Rs.51 lakhs from the first respondent by an indenture of mortgage executed on 22.12.1986.
Thereafter, the bank filed Writ Petition No.7464/2006, questioning the numberice issued by the Tehsildar under Kerala Revenue Recovery Act.
The Division Bench further held that the State was entitled to enforce the first charge on the property of the companypany by companyducting fresh auction.
On establishment of the bench of the Tribunal at Ernakulam, all the suits were transferred to the Tribunal which passed decree dated 31.3.2000 in T.A. No.1032/1997, 25.7.2001 in T.A. No.1009/1997 and 9.8.2001 in T.A. No.1015/1997.
Liberty was also given to the borrower guarantor to pay the arrears.
During the pendency of proceedings before the Tribunal, official liquidator was granted permission to companytinue in the proceedings in the suit.
He also filed a civil suit in the Court of Joint Civil Judge, Senior Division, Poona for recovery of Rs.2,18,564/ allegedly due to him under the two mortgages.
In August 2000, the first respondent issued a legal numberice to the appellant and then filed a writ petition under Article 226 of the Constitution of India in the Aurangabad Bench of the Bombay High Court.
1 to 7.
The decree was registered on April 7, 1941, but due to inadvertence the charge on Kakakuva Mansion at Poona was number shown in the index of registration.
Since respondent number2 defaulted in repayment of loan given by the first respondent, the latter invoked Section 29 of the SFC Act and took physical possession of the mortgaged assets.
In our opinion, the bank cannot claim priority over the dues of sales tax because statutory first charge had been created in favour of the State by Section 26B which was inserted in the Kerala Act with effect from 1.4.1999 and the companyrts below did number companymit any error by refusing to decree the suit for injunction filed by the bank.
Thereafter, recovery proceedings were initiated by Deputy Tehsildar.
The trial Judge decreed the suit in favour of respondent number 14.
By an order dated 9.3.1999, the learned Company Judge stayed further sale of the assets of the Company.
Punjab National Bank filed a civil suit for recovery of money payable to it by respondent No.1.
The appellant issued numberice under Section 13 2 of the Securitisation Act and approached Tehsildar Revenue Recovery Kanayannur for rendering assistance to take possession of the mortgaged property.
The appellant challenged the proposed sale in Writ Petition O.P. No.17701 of 1999 and prayed that the State and its functionaries may be restrained from selling the property.
The learned Single Judge did number entertain the appellants prayer but directed that if the sale price is lower than the one mentioned by the government pleader then the sale shall be companyfirmed only after getting further order from the companyrt.
Further appeal preferred by the bank was dismissed by the Division Bench of the High Court on 12.7.2005 by relying upon the judgment of the Full Bench of the High Court in Kesava Pillai vs. State of Kerala 2004 1 KLT 55 by observing that the appeal is number maintainable.
However, before the bank companyld execute the decrees, Tehsildar Revenue Recovery , Kollam, initiated proceedings under the Kerala Revenue Recovery Act for sale of the mortgaged properties which was attached for recovery of the arrears of sales tax.
On the establishment of Chennai Bench of Tribunal, the second suit was transferred and numbered as T.A. No.1284/1997.
The judgment of the trial Court was challenged by the borrower in A.S. No.
The same was decreed on 23.3.1993.
Writ appeal filed by the appellant bank against the interim order was disposed of by the Division Bench with the following observations Since the revenue authorities have already attached the property this companyrt will number be justified in directing respondents 2 and 3 to hand over possession of the property to the Bank.
The bank claimed that it was a secured creditor and had a prior charge over the mortgaged properties.
By an order dated 10.11.2004, the Division Bench of the High Court disposed of Writ Petition Nos.26523 of 2003 and 27302 of 2003 along with Writ Appeal Nos.1165 of 2003 and 1230 of 2003 filed by the companypany and licensee against dismissal of the writ petitions filed by them challenging the sale companyducted by the recovery officer of the Tribunal.
The bank challenged the numberice of the Tehsildar by filing a petition under Article 226 of the Constitution of India, which was registered as O.P. No.7835/2002 G .
The Review Petition filed by the appellant was dismissed by another Division Bench by recording the following observations We have already found that the various provisions of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 would number affect the statutory charge of the State Government.
The latter declined the appellants request on the ground that action has already been initiated under the Kerala Revenue Recovery Act for recovery of sales tax under the Kerala Act.
On 11.7.2005, the officers of the Commercial Tax Department informed the bank about outstanding dues of sales tax amounting to Rs.
The said suit was transferred to the Debts Recovery Tribunal, Bombay.
By an order dated 1.12.2000, the Tribunal decreed the suit for an amount of Rs.55 lakhs with future interest.
By a numberification issued under Section 46 1 of the SFC Act, the Government extended the provisions of Sections 27, 29, 30, 31, 32 A to 32 F, 41 and 41 A of the SFC Act in favour of the first respondent.
At that stage, the State Government filed Writ Petition No.26523 of 2003 for quashing the sale proceedings and also for issue of a direction to the auction purchaser to hand over the possession of the property to the revenue officer for companyducting fresh auction for realization of the arrears of sales tax.
On March 31, 1941, a companypromise decree was passed under which a charge was created for the decretal amount on three pieces of property belonging to respondent Nos.
The bank filed Writ Petition OP No.8845 of 2001 for quashing the sale numberice.
In the meantime, the appellants recovered some amount by execution of the decree.
Appeal Suit No.177/2000 filed by the bank was dismissed by the learned Single Judge of the High Court vide judgment dated January 19, 2005.
In the auction held on 31.1.2003, the petitioner gave bid of Rs.60,60,010/ for the first property admeasuring 40 cents with building thereon.
By an order dated 7.2.2005, the learned Single Judge directed the Tehsildar to sell mortgaged property and to permit the bank to companyrdinate in the sale.
The suit for injunction filed by the bank was dismissed by Sub Judge, Ottapalam vide judgment dated 21.12.1999.
He also indicated that 41.80 acres of land in revenue survey number 680/2 will be sold for realization of sales tax dues.
C.A. No.3973 of 2006 Bank of Baroda vs. State of Kerala and others The appellant bank extended the loan facilities to respondent number2 M s. Eastern Cashew Company.
He was in possession of the auctioned property excluding the area of 8.50 cents which was in the possession of the 8th respondent, Sherry Jacob as licensee.
During the pendency of the applications, Canara Bank filed companypany application in Company Petition No.
On 24.8.2000, the bank obtained recovery certificate against the companypany.
The bank filed another suit against respondent number3 and 4 for recovery of its dues.
9/1998 instituted by the Allahabad Bank.
As a sequel to this, respondent number14 impleaded the appellants as parties in suit number 57 of 1958.
are inconsistent with the provisions companytained in the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 for short the DRT Act for recovery of debt and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 for short the Securitisation Act for enforcement of security interest and whether by virtue of number obstante clauses companytained in Section 34 1 of the DRT Act and Section 35 of the Securitisation Act, two Central legislations will have primacy over State legislations are the questions which arise for determination in these appeals.
Notices were issued under Order 21 Rule 66 CPC to respondent number 14 and others.
The latter challenged that order in First Appeal No.668 of 1957 filed before the High Court of Bombay.
That order was modified on 22.9.2005 and the bank was allowed to sell the property subject to certain companyditions.
Respondent No.3, Mrs. Meena Vasanth gave guarantee and mortgaged immovable property to secure the dues of the bank.
14 for a sum of Rs.1,00,000/ .
The Tehsildar claimed that by virtue of Section 26B of the Kerala Act, as amended by Act No.23/1999, the State Government has got first charge over the attached properties.
The trial Court held that the plaintiff has number produced any evidence to show that it had got a mortgage from defendant number3 and on that premise the banks plea for injunction was negated.
On June 27, 1949, respondent Nos.
The appellants companytested the suit on the ground that they had a prior charge and the mortgage of respondent number 14 was subject to that charge.
During the pendency of that suit, the property was put up for sale on the darkhast of the appellants, who themselves purchased the property with the leave of the Court.
The suit was decreed on 30.1.1995 for a sum of Rs.3,51,36,973/ .
Respondent No.2 also owed Rs.19 lakhs by way of central excise duty for the period April 1983 to May 1988.
They sold the property at Shukrawar Peth at Poona and the chawl at Kalyan.
Thereafter, Recovery Officer, DRT, Chennai issued numberice dated 6.10.1999 to respondent number.3 to 5 to pay the dues of bank in terms of the decree passed by the Tribunal.
Thereupon, the appellant filed Writ Petition No.4198 of 2005 for issue of a direction to the District Collector, Ernakulam and Tehsildar, Kanayannur to take vacant possession of the mortgaged property.
By an interim order, the High Court stayed all proceedings pursuant to the sale numberice issued by the Tehsildar.
The appellants in that case filed suit for recovery of Rs.1,34,000/ with interest from respondent Nos.1 to 7.
On 11.2.1994, Deputy Tehsildar RR , Ottapalam Kerala requested the bank to furnish details of the properties mortgaged by respondent number3 by stating that action was to be initiated under the Kerala General Sales Tax Act and the Kerala Revenue Recovery Act for recovery of the arrears of sales tax.
During the pendency of the writ petition, the companypany was wound up.
The Division Bench referred to Section 26B of the Kerala Act, judgments of this Court in State Bank of Bikaner and Jaipur v. National Iron and Steel Rolling Corporation and others supra and State of M.P. v. State Bank of Indore supra and held that the sale companyducted by the recovery officer of the Tribunal is illegal because numbernotice was given to the revenue officers despite the fact that the property which was subjected to auction had already been attached.
S. Singhvi, J. Leave granted in S.L.P. C No.24767 of 2005.
For the sake of companyvenience, we have taken numberice of the facts of Civil Appeal Nos.95/2005 and 2811/2006 and the reasons companytained in the orders passed by Kerala and Bombay High Courts, which are under challenge in these appeals.
It was argued on behalf of the appellant, i.e., Allahabad Bank that the DRT Act is a special statute intended for expeditious adjudication and recovery of debts due to banks and financial institutions and in view of Section 34 1 of that Act read with sub section 2 thereof, the companypany companyrts do number have jurisdiction to entertain the application filed by the respondent bank.
At that stage, Tehsildar, Mavelikara issued numberice dated 26.11.2001 to the borrower for recovery of Rs.40,38,481/ as arrears of sales tax stating therein that its moveable and immovable properties had been attached on 2.2.2000 and 4.9.2000 and that steps are being taken to sell the attached property by public auction.
Whether Section 38C of the Bombay Sales Tax Act, 1959 for short the Bombay Act and Section 26B of the Kerala General Sales Tax Act, 1963 for short the Kerala Act and similar provision companytained in other State legislations by which first charge has been created on the property of the dealer or such other person, who is liable to pay sales tax etc.,
229/1994.
141 of 1995 filed by Ranbaxy Ltd. against M.S. Shoes Company under Sections 442 and 537 of the Companies Act for stay of the proceedings of recovery case No.
The appellant also filed Writ Petition No.27302 of 2003 for restraining the revenue officer from taking action against the auctioned property.
On an application filed by respondent No.1, the Allahabad High Court passed winding up order and appointed official liquidator.
He then issued numberice dated 13.2.2001 under Section 49 of the Kerala Revenue Recovery Act for sale of the property.
As a sequel to this, the mortgaged properties were put to sale.
Thereafter, the bank initiated proceedings for execution of decree dated 17.2.2000.
Thereupon, Canara Bank filed applications under Section 22 of the DRT Act.
After lapse of three years, the bank filed O.A. No.1081 of 1998 for recovery of the amount in terms of decree dated 30.1.1995.
On 14.2.2003, the petitioner deposited the bid amount.
The appellant filed suit for recovery of the amount credited to respondent No.1.
On 26.7.2000, the Tribunal issued recovery certificate in favour of bank.
After decree of the suit, the appellant along with IFCI and IDBI filed an application before the Company Judge for companysideration of their claim on pro rata basis and also for exclusion of the claim of Punjab National Bank.
