The main legal point established is the priority of secured creditors over State tax dues as per Section 31B of the RDDBI Act.

JUDGMENT :

SANDEEP N. BHATT, J.

1. The petitioner is before this Court seeking quashment of the attachment in revenue record by respondent No. 4 vide Revenue Entry No. 6209 dated 20.09.2018, which is certified on 25.10.2018 and further seeking direction by holding that the petitioner is an absolute owner of the property in question with legal and valid title as once purchased under the public auction.

2. The brief facts of the case are epitomized as under:

2.1 The property in question, being a ‘secured asset’ was put for the public e-auction on 27.04.2022 by the respondent no. 1-The Recovery Officer-I, DEBT Recovery Tribunal-II, Ahmedabad due to the default committed by the borrower/mortgagor, after taking the possession of the property, under the Recovery of debts due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as “RDDBI Act”) Act.

2.2 The petitioner purchased the said property in the said public e-auction conducted by respondent no. 1 for a sale consideration of Rs. 13,75,00,000/- and the respondent no. 1 issued a sale certificate in favour of the petitioner.

2.3 The petitioner was made aware by respondents No. 1 and 2 that the claim of the banks dues are prior to the State dues as per Section 31-B of the RDDBI Act.

2.4 Thereafter, on 31.05.2022, respondent No. 1 issued sale certificate.

2.5 There is a revenue entry being Entry No. 6209 of the year 2018 which pertains to the charge created by the State Tax Department qua the land in question.

2.6 The petitioner therefore requested respondent No. 1-Recovery Officer of the Debt Recovery Tribunal for deciding the priority of charge between the bank and the VAT Department which was incorporated vide Entry No. 6209.

2.7 Respondent No. 1 had passed order dated 31.05.2022, clarifying that the bank had got priority.

2.8 The Sub-Registrar office refused to execute the sale deed duly to State liability duly registered with it.

2.9 Therefore, the petitioner, by way of this petition, seeks to hold that the petitioner is a absolute owner of the property in question with legal and valid title.

3. Heard learned advocate Mr. Vijay H. Patel for the petitioner, learned Bhaskar Sharma for respondent No. 2-Bank of Baroda and learned AGP Mr. Trupesh Kathiriya for respondents No. 3 and 4.

4.1 Learned advocate Mr. Patel for the petitioner has submitted that the petitioner has purchased the subject property in public e-auction conducted by respondent no. 1- Recovery Officer of the Debt Recovery Tribunal. He has submitted the charge of respondent no. 4-State Tax Department is subsequent of the creation of mortgage by respondent No. 2-Bank. He has submitted that the erstwhile owner/mortgagor had created security interest over the property in question and therefore, the entry registered before the revenue records are nullity. He has further submitted that the petitioner has asked for clarification about the charge of the State Tax Department and the Authority concerned has clarified the same and stated that the Bank has first right over the property in question as per the statue. He has submitted that irrespective of any charge, the bank being a secured creditor has first right over the property/mortgaged property and the bank can recover its dues by selling the same.

4.2 He has further submitted that the petitioner is the absolute owner of the property once purchased under public auction and cannot be held liable for any unpaid dues of either parties. He has submitted that there is a priority under Section 31-B of the RDDBI Act, which suggests that the secured creditor-in the present case, the Bank-shall have priority and shall be paid in priority over all other debts and Government dues including revenues, taxes, cesses and rates due to Central Government, State Government or local authority. He has submitted that the priority has been given for the recovery of bank dues by way of en