ORDER:

Heard Sri.Vedulu Venkataramana, learned senior counsel appearing for the petitioners and Learned Government Pleader for Stamps and Registration appearing for respondent Nos.1 to 3. With their consent the writ petition is being taken up for disposal at the admission stage itself.

2. This writ petition is filed seeking following prayer:-

“to declare the action of the registration authorities (respondents 2 and 3) in not registering the sale certificates of the petitioners issued by the 4th respondent-Asset Reconstruction company under the provisions of the SARFAESI Act on account of the letter of the Assistant Commissioner(GST) Begumpet-II Circle, Hyderabad, which contains a demand for payment of GST amount and penalty against the debtor company i.e., M/s.Arlen Trading Private Limited, is arbitrary, illegal and violative of Section 26E and 35 of the SARFAESI Act in addition to Section 22A (i) (e) of the Registration Act and resultantly direct the registration authorities to entertain and register the five sale certificates of the petitioners relating to the commercial property bearing H.No.16-2-741/C/8/E, 16-2-741/C/8/E/1, 16-2-741/C/8/E/2, 16-2- 741/C/8/E/3 and extension of 16-2-741/C/8/E/3 consisting of ground plus four floors having total built up area of 12,300 sft land admeasuring of 297 sq.yards Sy No.318/1, situated at Moosarambagh, Malakpet, Hyderabad which was purchased by the petitioners in a SARFAESI auction from the 4th respondent-Asset Reconstruction company without being influenced by the alleged demand relating to GST directed against the original borrower i.e., M/s.Arlen Trading Private Limited and release the registered sale certificates to the petitioners.”

3. The brief facts of the case are that M/s.Arlen Trading Private Limited, had borrowed loan from the erstwhile Lakshmi Vilas Bank and when the said borrower has defaulted in payment of the credit facilities, the bank initiated the proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, the SARFAESI Act) and assigned the debt to the respondent No.4.- Asset Reconstruction Company India Limited. Thereafter, respondent No.4 by following due procedure contemplated under the SARFAESI Act 2002, notified the commercial property bearing H.No.16-2-741/C/8/E, 16-2-741/C/8/E/1, 16-2- 741/C/8/E/2, 16-2-741/C/8/E/3 and extension of 16-2-741/C/8/E/, consisting of ground plus four floors, having total built up area of 12,300 sft, with undivided share of land admeasuring of 297 sq.yards, in Sy No.318/1, Ward.16, Block No.2, situated at Moosarambagh, Malakpet, Hyderabad, for auction to be conducted on 28.12.2023. The petitioners have participated in the said auction and came out as highest bidders with a total bid amount of Rs.5,23,50,000/-.

4. Learned senior counsel appearing for the petitioners would submit that petitioners have paid the entire bid amount and thereafter respondent No.4 issued five sale certificates dated 11.04.2024 with respect to the subject property. Later, when the Petitioners approached respondent No.2 for registration of sale certificates dated 11.04.2024, the same was orally refused to register on the ground that letter dated 23.01.2024, issued by the Assistant Commissioner (GST) Begumpet-II Circle, Hyderabad, with a request to hold the subject property and not to allow any sale/purchase of the same till the payment of due amount of Rs.2,50,34,040/- and penalty of Rs.25,03,400/- is paid by the tax payer namely M/s.Arlen Trading Private Limited.

5. Learned senior counsel has drawn attention of this Court to the Section

26E and 35 of the SARFAESI Act 2002, which reads as under:-

26E. Priority to secured creditors.—Notwithstanding anything contained in any other law for the time being in force, after the registration of security interest, the debts due to any secured creditor shall be paid in priority over all other debts and all revenues, taxes, cesses and other rates payabl