Secured creditors under the SARFAESI Act have priority over state tax dues, as established by Section 26E, which overrides conflicting state laws.

ORAL JUDGMENT

1. Issue Rule, returnable forthwith. Ms. Nidhi Vyas, learned AGP waives service of notice of rule for and on behalf of the respondent Nos.1 and 2. Notice is unserved to the respondent No.3 as the company is closed. Notice has been served to respondent No.4 to 6, but they have chosen not to appear.

2. Heard Mr. Sandip Bhatt, learned advocate appearing for the writ applicant and Ms. Nidhi Vyas, learned AGP appearing for the respondent No.1 and 2.

3. Brief facts of the present case are as under:-

3.1 Petitioner bank is a secured creditor and has granted various facilities to the respondent No.3 and for securing the same, the property situated at Gondal Revenue Survey No.416/1 paikiee, Binkheti Land A. 3-33 G. Known as Shstri Nagar Paikee, Binkheti Plot No.29, Paikee Residential House on land Sq. Yrds., 120-3 sq. mtrs., 100.65 of Gondal City Survey Ward No.2, Sheet No.150, City Survey No.2967/23 Street No.2 Shashtri Nagar, Off Yogiraj Pan main Road, Jetpur Road, Gondal Tal. Gondal Dist. Rajkot came to be mortgaged by the petitioner bank, the copy of the said mortgage deed is duly produced at Annexure-A.

3.2 As the respondent No.3 defaulted in repaying the aforesaid credit facility, the applicant bank classified the said account as NPA (Non-Performing Asset) on 30.03.2018, in accordance with the Reserve Bank of India directives and guidelines.

3.3 In spite of the bank’s repeated requests and reminders, the borrower did not repay the dues of the petitioner bank and in view thereof, the petitioner bank issued notice under Section 13(2) of the SARFAESI Act, 2002 to the Borrowers/Mortgagers/Guarantor and thereby demanded an amount of Rs.2,80,86,457/-. The possession of the property was taken over by the petitioner bank under the provision of SARFAESI Act, 2002 on 14.06.2018.

3.4 As the respondent No.3 did not make the payment even after issuance of the possession notice, in view thereof, the sale notice came to be issued by the petitioner bank from time to time and thereafter, property was sold on 25.05.2023 for an amount of Rs.42,12,500/- and the sale certificate under Rule 9(6) of Security Interest Enforcement Rules, 2002 came to be issued by the petitioner bank in favour of auction purchasers, namely, Pushpaben Jentilal Ramani, Sarojben Arvindbhai Ramani and Alpaben Chandubhai Bhuva. As per the request made by the auction purchaser, the necessary registered conveyance was required to be executed by the petitioner bank in their favour, wherein upon verification of the revenue record by the auction purchaser, it was found that the charge and emcumbrances of the State Tax Officer had been recorded in the revenue record to the tune of Rs.29,30,527/-. Therefore, auction purchaser and official of the petitioner bank had informed the respondent No.2 to remove the said encumbrances from the property, as the same was already sold by the petitioner bank under SARFAESI Act and it was submitted that the secured creditor has priority in view of Section 26-E of the Act. The respondent No.2 had not removed the attachment from the property. Not only that, since the attachment was not removed by department, the Sub-registrar Office is not ready to register the conveyance deed in favour of auction purchaser.

3.5 In view of aforesaid, the petitioner herein is constrained to approach to this Court and has prayed for, following reliefs:-

“(A)This Hon'ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction by quashing and setting aside the impugned attachment order and charge recorded in the revenue record vide Entry no. 1749 by the respondent no.2 at ANNEXURE-"F", for the reasons stated in the Memo of Petition and in the interest of justice;

(B) This Hon'ble Court may be ple