The enforcement of the first charge on the property is premature until the property is sold for recovery of the Central Excise dues.

ORDER :

1. We have heard learned counsels for the parties.

2. One Sabhyata Plastics Pvt Ltd. was financed by Rajasthan Financial Corporation for carrying out its business. A default having occurred, the Corporation acted under Section 29 of the State Financial Corporation Act, 1951 and sold the hypothecated property to one Subramaniam Shastri. The sale was approved by the Board of the Corporation; possession was handed over to the buyer and a conditional conveyance deed was also executed by reserving the first charge on the property until payment of all dues. In the meantime, on account of certain alleged Central Excise dues payable by the erstwhile owner-Sabhyata Plastics Pvt. Ltd., the department had attached the property leading to the institution of the writ petition, out of which this appeal arises.

3. The writ petition was dismissed by the High Court primarily on the ground that Rajasthan Financial Corporation having sold the property in public auction the person aggrieved would have been the auction purchaser and not the Corporation. The claim of the Corporation with regard the first charge on the property was answered by the High Court by holding that the stage for enforcement of the charge would come only when the property is sold for recovery of the Central Excise dues and therefore, the issue raised with regard to the first charge on the property is pre-mature.

4. Having heard the learned counsels for the parties and on consideration of the conditional conveyance deed, we are of the view that the High Court was perfectly justified in coming to the impugned conclusion. The stage at which the remedy of the Financial Corporation may be invoked, as pointed out by the High Court, adequately takes care of the grievance of the appellant.

5. We, therefore, decline to interfere with the order passed by the High Court and consequently dismiss the present appeal.