The main legal point established in the judgment is the priority of the secured creditor's dues over other creditors' claims, as determined by the SARFAESI Act and relevant case law.

JUDGMENT :

B.P. COLABAWALLA, J.

1. Leave granted to the Petitioner to correct the typographical mistake in prayer clause (b) of the Petition. In place of Respondent No. 6, it should be “Respondent No. 4.” The correction shall be carried out forthwith in front of the Associate. Re-verification is dispensed with.

2. Rule. With the consent of contesting parties, rule made returnable forthwith and heard finally.

3. The Petitioner has filed the present Writ Petition seeking a direction inter alia to remove the lien/charge/encumbrance/mutation entry of Respondent No. 1 and 2 from the records of Respondent No. 4 and 5 in respect of the immovable property bearing Survey No. 366/5 admeasuring 1200 sq.mtrs Plot No. 16, and Survey No. 366/6 admeasuring 1200 sq.mtrs Plot No. 17, totally admeasuring 2400 sq.mtrs and structures thereon along with plant and machinery lying at the Premier Industrial Estate, Kachigam, within the village panchayat jurisdiction of Kachigam, Taluka Daman, sub-district and district of Daman pin code 396 215 (for short the ‘Secured Asset’) and to direct Respondent No. 4 to accept and register the document of sale/sale certificate issued by Respondent No. 3 in favour of the Petitioner.

4. It is the case of the Petitioner that the Petitioner came to know about the said Secured Asset through the Free Press Journal newspaper wherein a Sale Notice [dated 27th June 2022] was published for sale of the Secured Asset under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the “SARFAESI Act”) r/w The Enforcement of Security Interest Rules, 2002 (for short the “said Rules”) at a reserve price of Rs. 3.59 crores. The Petitioner took inspection of the Secured Asset on 14th July 2022 along with the officers of Respondent No. 3 and subsequently participated in the e-auction held on 8th August 2022.

5. The learned counsel for the Petitioner submitted that prior to participating in the said e-auction, the Petitioner was not informed about any charges/lien/encumbrances of Respondent No. 1 and 2 on the said Secured Asset. She also submitted that the Petitioner had taken inspection of the records of Respondent No. 3 before participating in the said e-auction. However, the Petitioner did not notice any encumbrances/lien/charges of Respondent No. 1 and 2.

6. Be that as it may, in the said e-auction held on 8th August 2022, the Petitioner was declared as the highest and successful bidder at a price of Rs. 4.55 crores and thus the Petitioner deposited the required 25% of the bid amount [i.e. Rs. 1,13,75,000/-] with Respondent No. 3 by 10th August 2022. The Petitioner was required to deposit the balance 75% of the bid amount within 15 days from the date of the auction as per the provisions of the SARFAESI Act. Since the Petitioner had applied for a loan with Yes Bank Ltd. [for making payment of the balance 75% of the bid amount to Respondent No. 3], it intimated Respondent No. 3 that Yes Bank Ltd. required certain clarifications from Respondent No. 3 for sanctioning the loan. One of the clarifications that Yes Bank Ltd. needed from Respondent No. 3 was whether the Secured Asset was free from encumbrances and that there were no statutory dues pending against the said Secured Asset. In response to the query raised by Yes Bank Ltd., Respondent No. 3, vide email dated 21st September 2022, confirmed that there were no encumbrances and neither were there any pending statutory dues against the Secured Asset. Based on Respondent No. 3’s confirmation, Yes Bank Ltd. disbursed a loan of Rs. 3 crores to the Petitioner on 22nd September 2022 and accordingly the Petitioner remitted the balance 75% of the bid amount of Rs. 3,41,25,000/- on 22nd September 2022 to Respondent No. 3. Respondent No. 3 has confirmed receipt of 100% of the bid amount and has also issued a Sale Certificate to the Petitioner on 27th September 2022. Thereafter, the Petitioner has collected the original do