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A. MUHAMED MUSTAQUE, S. MANU
Dhanlaxmi Bank Ltd. , Represented By Its Manager (Legal) – Appellant
Versus
Securities And Exchange Board Of India, rep. By its Chairman – Respondent
JUDGMENT :
(A. Muhamed Mustaque, J.) :
This appeal filed by Dhanlaxmi Bank raises an important question of law. The question of law is about the overriding effect of Section 26E of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act), 2002 over the provisions of Section 11, 11-A, 11-B and Section 28-A(3) of the Securities Exchange Board of India Act (SEBI Act), 1992.
2. The appellant/bank claims that on the introduction of Chapter IV A in the SARFAESI Act, with effect from 24/01/2020, the secured creditor, who had registered secured interest with the Central Registry will have priority right over all other debts and all revenues, taxes and other rates payable to Central Government or State Government or local authority. This is a primary question to be decided. There are two more questions to be answered in this appeal regarding the registration of secured assets with the Central Registry and also defining what are the priority rights of the secured creditor under Section 26E of the SARFAESI Act. This contention arises in the context of a claim made by the SEBI that the amount due to SEBI recoverable under Section 11-B of
Section 26E of the SARFAESI Act grants secured creditors priority over all debts, including those recoverable by SEBI, thus affirming the bank's claim.
Point of law: It would be seen that so far as clause (1) of Article 254 is concerned it clearly lays down that where there is a direct collision between a provision of a law made by the State and tha....
Secured creditors' rights under Section 26E of the SARFAESI Act take precedence over state tax claims, confirming the principle of priority for registered interests.
Secured creditors have priority over State debts under Section 26E of the SARFAESI Act, 2002, invalidating conflicting State charges on mortgaged assets.
The provisions of Section 26E of the SARFAESI Act 2002 and Section 31B of the Recovery of Debts and Bankruptcy Act, 1993 create "First Charge" by way of priority in favour of the Banks and Financial ....
Secured creditors' debts take precedence over state tax claims, as established by Section 26E of the SARFAESI Act.
Section 26E of the SARFAESI Act establishes that secured creditors have priority over State revenue claims, reinforcing the enforceability of secured debts post-registration.
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