Secured creditors have priority over other claims, including those from the Income Tax Department, as established under Section 26E of the SARFAESI Act.

ORDER

(Order of the Court was delivered by S.SRIMATHY, J.

The present writ petition is filed for Writ of Mandamus, to direct the respondents 1 and 2 to efface/delete the impugned attachment entry in the encumbrance certificate relating to the property in Re-Survey No.50/4A measuring to an extent of 8.300 cent Aloor B Village, Kalkulam Taluk, Kanyakumari District, registered as Document No.8 of 2021, dated 17.03.2021 and Document No.29 of 2024, dated 24.04.2024, on the file of the 2^nd respondent within reasonable time period fixed by this Court by considering the petitioner's representation, dated 14.06.2024.

2. The brief facts are that the respondent 3 to 5 had availed the below detailed loan facilities from the petitioner bank:

The property in R.S.No.50/4A measuring to an extent of 8.300 cents in Aloor B Village, Kalkulam Taluk, Kanyakumari District belongs to respondents 3 to 5 and they created the valid equitable mortgages for the above said loan facilities and executed Memorandum of Deposit of Title Deeds in Document No. 2892 of 2016, dated 26.07.2016, Document No.5542 of 2019, dated 31.12.2019 and Document No. 4048 of 2020, dated 31.10.2020 which are registered before the 2^nd respondent in favour of the petitioner bank, thereafter it became “secured assets” under Section 2 (zc) of the SARPAESI Act. The respondents 3 to 5 defaulted in repayment, hence the accounts were classified as Non-performing Asset (NPA) on 21.10.2022, then the petitioner bank issued a demand notice on 21.02.2023 under Section 13(2) for Rs. 4,07,55,140/- (Rupees Four Crore Seven Lakh Fifty Five Thousand One Hundred and Forty only) as on 07.02.2023. Thereafter, possession notice, dated 30.05.2023 under Section 13(4) was issued for a sum of Rs. 4,22,44,551/- (Rupees Four Crore Twenty Two Lakhs Forty Four Thousand Five Hundred and Fifty One only) as on 16.05.2023 along with further interest, costs and charges, etc. and took symbolic possession of the property. The petitioner bank has issued a Tender cum Auction Sale Notice, dated 30.03.2024, the 7^th respondent became the successful bidder in the Re-Tender cum Auction conducted on 17.04.2024 and purchased the property for a sum of Rs. 1,10,05,000/- (Rupees One Crore Ten Lakhs and Five Thousand only). The petitioner bank issued a sale confirmation, dated 17.04.2024 and sale certificate on 21.05.2024. While registering the sale certificate it came to the knowledge there are attachment entries in favour of the 6^th respondent namely M/s. Shriram Finance Limited and the same are reflecting in the encumbrance certificate. The petitioner bank verified the encumbrance certificate and found entries of registered Document No. 8 of 2021, dated 17.03.2021 and Document No. 29 of 2024, dated 21.04.2024. Before such entry the petitioner bank was not issued with any communication or notice or opportunity of hearing. The contention of the petitioner bank is that with an intention to defeat the interest of the bank the 6^th respondent had filed Arbitration Case No.4 of 2021 and Arbitration Case No.12 of 2024 and obtained attachment orders in favour of the 6^th respondent in I.A.No.1 of 2021 and I.A.No.1 of 2024 respectively. The said impugned attachment entries are per se illegal, unlawful and arbitrary and are not supported by any statutory provisions. The 7^th respondent submitted a representation, dated 03.06.2024, requesting the bank to clear the above said attachment entries before registering the sale certificate in his favour. Hence the petitioner bank submitted detailed representation, dated 14.06.2024, before the respondents 1 and 2 / authorities to remove the said attachment entries in the encumbrance certificate, wherein it is stated the act of the cre