The main legal point established in the judgment is that under the SARFAESI Act, the petitioner was not liable to pay any additional differential premium and the Sales Tax Department could not claim any further amount from the petitioner in respect of dues owed by the Defaulting Company.

JUDGMENT :

1. By the present Writ Petition filed under Article 226 of the Constitution of India, the Petitioner seeks an order and direction to Respondent No.1 [Maharashtra Industrial Development Corporation (MIDC)] to effect transfer of Plot No.H- 13, admeasuring about 15,000 sq.mtrs. lying and being situated at Sangli- Miraj Industrial Area (for short “the suit property”) in favour of the Petitioner by accepting the transfer fee of Rs.10,57,500/- with immediate effect. This relief is sought on the basis that the Petitioner has purchased the leasehold rights in the suit property from Respondent No.2 [Sangli District Central Cooperative Bank Limited] under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short “the SARFAESI Act”). The other relief sought is to quash and set aside the Demand Notice dated 3rd November 2006 issued by Respondent No.3 [the Assistant Commissioner of Sales Tax] to the Petitioner for payment of sales tax dues of one M/s Maha Containers Pvt Ltd, Sangli (for short “the Defaulting Company”).

2. Rule was issued in the above Petition on 17th November 2009, and certain directions were also passed in earlier orders. Now it has come up for hearing and final disposal before us.

3. Before we advert to the arguments canvassed in the above Petition, it would be appropriate to set out some brief facts, which are undisputed. By an Agreement dated 3rd September 1991 entered into between MIDC and one Mr. K. Gopalkrishna Rao, the Chief Promoter of the Defaulting Company, the suit property was leased out to the Defaulting Company. After this lease was created, with the consent of Respondent No.1-MIDC, the Defaulting Company created a mortgage in favour of Respondent No.2 in relation to the suit property. This mortgage was created because the Defaulting Company had availed of certain facilities/loan from the 2nd Respondent-Bank.

4. Since the Defaulting Company failed to repay its dues, the 2nd Respondent-Bank issued a notice under Section 13 (2) of the SARFAESI Act calling upon the Defaulting Company to pay the outstanding dues within 60 days from the date of the said notice. Since the aforesaid notice was not complied with, Respondent No.2, on 16th June 2005, took possession of the suit property under Section 13 (4) of the SARFAESI Act. After taking possession, the 2nd Respondent-Bank, on 4th November 2005, issued a public notice for auction of the suit property, fixing the date of auction on 7th December 2005. The reserve price fixed was at Rs.1,17,11,000/-.

5. In the auction conducted by the 2nd Respondent-Bank, the Petitioner participated and was declared as the highest bidder with a bid of Rs.1,18,10,000/-. On payment of the entire consideration of Rs.1,18,10,000/-, the 2nd Respondent-Bank handed over physical possession of the suit property to the Petitioner on 10th January 2006. Thereafter, on 27th January 2006, the 2nd Respondent-Bank informed Respondent No.1-MIDC about the said auction being conducted successfully. Accordingly, on 28th January 2006, the 2nd Respondent-Bank issued a Sale Certificate in favour of the Petitioner, which too was registered before the concerned Sub-Registrar Miraj, Sangli, on 31st March 2006.

6. After registration of the Sale Certificate, the Petitioner made an application to Respondent No.1-MIDC to transfer the lease of the suit property in its favour. In response thereto, on 18th May 2006, Respondent No.1-MIDC requested the 2nd Respondent- Bank to provide certain documents and also a No-Objection from Respondent No.3 (Sales Tax Authorities). This was the first time the No-Objection from the Sales Tax Department was mentioned, and yet the quantum of the dues allegedly owed to the sales tax department was not informed to the 2nd Respondent-Bank or to the Petitioner.

7. Be that as it may, on 24th May 2006, the 2nd Respondent-Bank replied to the aforesaid letter of Respondent No.1-MIDC and provided the necessary do