Section 26E of the SARFAESI Act establishes that secured creditors have priority over State revenue claims, reinforcing the enforceability of secured debts post-registration.

JUDGMENT :

(Vaibhavi D. Nanavati, J.) :

1. Issue Rule, returnable forthwith. Ms. Pooja K. Ashar, learned AGP waives service of notice of rule for and on behalf of the respondent Nos.1 to 3 and Mr. Manish S. Shah, learned advocate waives service of notice for and on behalf of the respondent No.4.

2. Heard Mr. B.C. Thakkar, learned advocate with Ms. Noopur K. Dalal, learned advocate appearing for the petitioner, Ms. Pooja K. Ashar, learned AGP appearing for the respondent Nos.1 to 3 and Mr. Manish S. Shah, learned advocate appearing for the respondent No.4.

3. By way of present petition, the petitioner herein has prayed for quashing of the impugned charge or mortgage on the property being non-agriculture land with factory, land and building bearing survey No. R.S. No.423/paiki 6, Vaghel Road, PO. Harij, Taluka-Harij, District: Patan, admeasuring about 4755 Sq. Mtrs. in the name of Tirupati Cotton Ginning Partners and the property being non-agriculture land with factory, land and building bearing Survey No. at R.S. No.423/paiki1/P, Vaghel Road, PO.Harij, Taluka-Harij, District : Patan, admeasuring about 6171 Sq. Mtrs. in the name of Bhagwanbhai Parsottambhai Patel, in the registration, Sub-Registrar Office at Harij, Patan, by the Department of State/Central Sales Tax.

4. The petitioner herein purchased the aforesaid property by way of E-Auction sale process undertaken by the respondent No.4 – Bank under the provisions of the SARFAESI Act, 2002. The respondent No.4 is a Scheduled Public Sector Bank registered with the Reserve Bank of India and protected under the SARFAESI Act, 2002, in case of any charge created on any of the property against loan provided.

4.1 The property-in-question being sold through E-Auction sale by the respondent No.4 – Bank, wherein, the petitioner bidded for the said property by depositing Earnest Money Deposit (EMD) of Rs.8,74,000/- on e-B kray and deposited Rs.78,76,000/- in the no lien account of the Bank on 07.04.2023; duly produced at Annexure – C and Annexure – D respectively. Upon receipt of the bid, EMD and lien amount submitted by the petitioner, the respondent No.4 – Bank sent an E-mail to the petitioner accepting the Bid submitted by the petitioner for the purchase of the property on 24.03.2023 and further, instructed the petitioner to deposit the remaining Bid amount by 08.04.2023. The said amount was also deposited by the petitioner herein in terms of the auction. The sale certificate came to be issued by the respondent No.4 – Bank on 11.04.2023 and sale deed for the purchase of the property also came to be executed by Sale Deed No.968/2023 on 01.07.2023 at Sub-Registrar, Harij, Patan. When the petitioner approached the Sub-Registrar, Harij, Patan, for releasing the registered sale deed of the said property, the petitioner was informed that the Department of Sales Tax, Office of Commissioner of State Tax, had registered a charge against the said property before the Sub-Registrar, Harij, Patan. Subsequently, Talati of Harij also informed the petitioner through communication dated 18.07.2023.

4.2 The petitioner issued notice through Advocate on 10.08.2023 to the respondent Department of Sales Tax to cancel/withdraw the charge and mortgaged created by the said Department along with the extract of provision of Section 2 6E of the SARFAESI Act, 2002. The said notice was n