ORDER :

PRAYER : Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Certiorari, calling for the records pertaining to the order proclamation of sale notice dated 27.05.2019 vide No.TBM/RO/PDY/Recy-Cell/Div-I/PC/20/2019 issued by the first respondent herein and quash the same.

The proclamation of sale notice dated 27.05.2019, issued by the first respondent, is under challenge in the present writ petition.

2. The writ petitioner is the UCO Bank.

3. The writ petitioner-Bank states that M/s.Pondicherry Textile Corporation Limited (erstwhile M/s.Anglop French Textiles), the second respondent herein, availed various credit facilities fund based and non-fund based for a total sum of Rs.4,365.69 lakhs from the Puducherry Main Branch of the writ petitioner-Bank and as a security towards repayment of credit facilities, the second respondent has created equitable mortgage of the property situate at Pondicherry by depositing original title documents of the properties.

4. M/s.Pondicherry Textile Corporation committed series of default in repaying the loan dues, the account of the second respondent has become irregular and consequently, the writ petitioner-Bank was constrained to declare the account of the second respondent as Non-Performing Asset (NPA).

5. As a financial creditor as defined under the Insolvency and Bankruptcy Code 2016 and consequently, the writ petitioner-Bank through their Puducherry Branch initiated proceedings under Section 7 of the Insolvency and Bankruptcy Code 2016 before the National Company Law Tribunal, Chennai for corporate resolution of their claim and the same has been numbered as IBA/514/CB/2019 and is pending before the National Company Law Tribunal, Chennai.

6. In the meantime, the first respondent issued an auction notice for conducting by publishing proclamation of sale of the movables viz., machineries vide No.TBM/RO/PDY/Recy-Cell/Div-I/PC/20/2019 of the second respondent-Company for recovering outstanding dues of Rs.3,64,00,534/- as the second respondent committed default in repaying the Provident Fund Contribution of the second respondent by fixing the upset price as Rs.30,60,000/- for three machineries mentioned in the sale notice.

7. On 21.06.2019, the writ petitioner-Bank through their Puducherry Branch wrote a letter to the first respondent informing that they are the leader of Consortium of Banks, who have given various credit facilities to the second respondent-Company and having the first charge over the movables and immovables of the second respondent- Company. In the meantime, the sale supposed to have taken place on 27.06.2019 pursuant to the proclamation of sale notice dated 27.05.2019, was postponed to 10.07.2019.

8. On 27.06.2019, the first respondent wrote a letter to the writ petitioner-Bank stating that they have first charge over the movables even in the case of Companies, which are under liquidation as the Provident Fund Authorities are entitled to sell the mortgage properties as Employees Provident Fund Act, 1952 provides for priority of Provident Fund Contribution over the debts of the industries under liquidation of Sick Unit.

9. On 14.07.2019, the writ petitioner-Bank wrote a letter stating that they are the secured creditor of the both movables and immovable assets of the second respondent-Company and the petition has been filed before the National Company Law Tribunal for resolution of their claim which cannot be construed that the writ petitioner-Bank has given up their right as a secured creditor. In spite of the letter dated 04.07.2019, the first respondent is proceeding with the sale of the hypothecated movables on 10.07.2019 pursuant to the proclamation of sale notice dated 27.05.2019, which is impugned in the present writ petition.

10. Setting out the above facts, the learned counsel for the writ petitioner reiterated that the respondent-Provident Fund Organisation may have a claim and also have priority. However, by virtue of the