The rights of secured creditors take precedence over statutory authorities in recovery proceedings, as established in the provisions of Section 26E of the SARFAESI Act.

1. By consent of the parties both the writ petitions are taken up together for consideration.

2. The writ petition being WPA 3564 of 2025 has been filed by the CFM Asset Reconstruction Pvt. Ltd. (hereinafter referred to as the “secured creditor”) while the writ petition being WPA 26115 of 2024 has been filed by private parties, amongst whom the petitioner no.1 in such petition appear to be the principal borrower who claims to be a lessee in respect of certain properties which form subject matter of the writ petition which has also been secured by way of mortgage with the secured creditor.

3. The secured creditor claims to be registered with the Reserve Bank of India under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the “SARFAESI Act”) and also claims to be engaged in the business of acquiring non-performing assets from banks/financial institutions. The respondent no. 5 in the second writ petition being WPA 3564 of 2025 is the principal borrower, and is also the petitioner no.1 in WPA

26115 of 2024.

4. It is the case of the secured creditor that in usual course of business dealings and transactions, the respondent nos. 5 and 6 had approached the IDBI Bank Limited (hereinafter referred to as the “assignor bank no.1”) for sanction of credit facilities in its favour. The said assignor bank no.1 has granted financial assistance towards working capital with a cash credit limit of Rs.1000 lakhs, subject to the terms and conditions in respect of the sanction letter dated 13th March, 2009. The sanction of such credit facilities were subsequently renewed on 24th August, 2010 with a sub-limit of Rs. 100 lakhs for LC/BG, on certain terms and conditions and as morefully indicated in such letter. The assignor bank no.1 in order to secure credit facilities sanctioned by it had issued a letter of intent dated 24th August, 2010. Records would reveal that the respondent no.5, the principal borrower had since approached the State Bank of India (hereinafter referred to as the “assignor bank no.2”) and had availed and enjoyed certain credit facilities. In course thereof, the respondent nos. 5 and 6, in the second writ petition, inter alia, executed and entered into certain number of documents for the purpose of availing loan facilities.

5. Records would further reveal that in order to secure repayment of the credit facilities sanctioned by the assignor bank no. 1, the assignor bank no. 1 had issued a letter dated 4th February, 2010 ceding pari-pasu charge in favour of the assignor bank no. 2. The principal borrower had since made available a no-objection certificate dated 2nd March, 2010 issued by the assignor bank no. 2 in terms whereof, the assignor bank no. 2 agreed to cede charge on pari-pasu basis in favour of the assignor bank no. 1.

6. The principal borrower in terms of the memorandum of deposit of title deed dated 6th December, 2010 deposited the original ‘Indenture of Lease’ dated 23rd August, 2022 in respect of all that piece and parcel of land measuring about 8.20 acre (approx. 25 bighas) along with factory shed/office/Plant & machinery and other installations lying and situated at Kanjilal Avenue, Durgapur- 713210 leased for the period of 60 years w.e.f. 1st January, 2002 to 31st December, 2016 (in short the “subject property”).

7. Subsequently, the principal borrower having failed to make payment of its obligation as stipulated with the assignor bank no. 1, the accounts of the principal borrower was declared to be a non-performing asset on 29th June 2012 in the books of the assignor bank no. 1 and on 19th Sep