Gujarat High Court
State Of Gujarat vs Central Bank Of India on 11 December, 2025
Author: Sunita Agarwal
Bench: Sunita Agarwal
NEUTRAL CITATION
C/CA/5871/2025 ORDER DATED: 11/12/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CIVIL APPLICATION (FOR CONDONATION OF DELAY) NO. 5871 of
2025
In
F/LETTERS PATENT APPEAL NO. 35738 of 2025
With
F/LETTERS PATENT APPEAL NO. 35738 of 2025
In
R/SPECIAL CIVIL APPLICATION NO. 13768 of 2023
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2025 In F/LETTERS PATENT
APPEAL NO. 35738 of 2025
In
R/SPECIAL CIVIL APPLICATION NO. 13768 of 2023
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STATE OF GUJARAT & ANR.
Versus
CENTRAL BANK OF INDIA & ORS.
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Appearance:
MS.HETAL PATEL, AGP for the Applicant(s) No. 1,2
MR. SANDIP C BHATT(6324) for the Respondent(s) No. 1
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CORAM:HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE
SUNITA AGARWAL
and
HONOURABLE MR.JUSTICE D.N.RAY
Date : 11/12/2025
ORAL ORDER
(PER : HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL)
1. Having heard Ms.Hetal Patel, learned Assistant Government Pleader appearing for the State Appellants and perused the record, pertinent is to note that the present intra- court appeal is delayed by 393 days, of which no proper explanation could be furnished in the application seeking condonation of delay.
2. Besides that, since the learned counsel for the appellants has argued on the merits of the case, we may note that the Page 1 of 5 Uploaded by BINA SHAH(HC00353) on Mon Dec 15 2025 Downloaded on : Wed Dec 17 21:43:00 IST 2025 NEUTRAL CITATION C/CA/5871/2025 ORDER DATED: 11/12/2025 undefined writ petition, out of which the present appeal has arisen, was filed by the bank which was subject matter of the auction proceedings through e-auction held in the year 2023. The original petitioners/auction purchasers had deposited the entire sale consideration and the sale certificate dated 25.05.2023 was issued in his favour by the respondent - Bank.
3. The Writ Court vide judgment and order dated 24.09.2024 on reading of the Rule 26 E of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short referred as "SARFAESI Act, 2002") and the decision of the Apex Court, interpreting the provisions of Section 26 E, has held that the charge of the secured creditor shall precede over the charge of unsecured creditor, namely the Department of Sales Tax. It was noted by the learned Single Judge that the petitioner is an auction purchaser who has purchased the property in an auction proceedings conducted by the respondent - Bank and the respondent Bank being the Secured Creditor shall have priority over all the debts, revenues, taxes, cesses, and other rates payable to the Central or State Government or local authority.
4. It was, thus, directed that the revenue authorities are required to mutate the name of the petitioner in the revenue records by setting aside the entry of attachment or charge over the property in question created by the Sales Tax Department.
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5. Pertinent is to note that though the Sales Tax Department has filed the present appeal challenging the order of passed by the learned Single Judge without filing its response before the Writ Court, but even in the present appeal, there is no disclosure as to how and when the charge was created by the Sales Tax Department over the property in question. There is a complete silence in the memo of appeal as to the proceedings, if any, initiated by the appellant, namely Sales Tax Department under the Gujarat Value Added Tax, 2003 with respect to the property in question.
6. On a query made by the Court, Ms.Hetal Patel, learned Assistant Government Pleader appearing for the State appellant would invite the attention of the Court to Page No. '40' of the paper-book which is the copy of Village Form No.2, wherein an entry of the charge of Sales Tax Department over the property in question has been made. Reliance is placed on Section 48 of the Gujarat Value Added Tax, 2003 to submit that the amount payable by any person on account of tax, interest or penalty shall be the first charge on the property of such person.
7. However, pertinent is to note that for creation of charge under Section 48, proceedings under Section 44, 45 or 46 of the Gujarat Value Added Tax, 2003 were to be initiated. In absence of any disclosure about the initiation of any proceeding under the Gujarat Value Added Tax, 2003, prior in point of time than the recovery proceedings initiated under the SARFAESI Act, 2002 for registration and attachment of the secured assets, so as to create a charge over the property Page 3 of 5 Uploaded by BINA SHAH(HC00353) on Mon Dec 15 2025 Downloaded on : Wed Dec 17 21:43:00 IST 2025 NEUTRAL CITATION C/CA/5871/2025 ORDER DATED: 11/12/2025 undefined in question by the Bank, it is not possible for us to appreciate the submissions made by the learned Assistant Government Pleader placing reliance upon the provisions of Section 48 of the Gujarat Value Added Tax, 2003.
8. Further, the learned counsel for the respondent namely the original petitioner by placing the entries at Page No.'40' of the paper-book, which is Village Form No.2 would demonstrate that the entry of the charge created by the Bank is prior in point of time than the entry of the charge created by the Sales Tax Department therein.
9. As the appellants have not placed any material before the Writ Court by filing their reply and further there is a complete silence in the present appeal filed by the Sales Tax Department, the submissions made about the overriding effect of Section 48 of the Gujarat Value Added Tax, 2003, being a subsequent legislation than the SARFAESI Act, 2002, cannot be appreciated, in absence of the factual details.
10. For the facts appreciated by the learned Single Judge, we do not find any error in the judgment impugned, which cannot be said to be passed on any incorrect interpretation of Section 26-E of the SARFAESI Act, 2002.
11. As no foundation has been laid to assert that the charge over the property in question was created by the Sales Tax Department under the Gujarat Value Added Tax, 2003, prior in point of time, than the charge created by the respondent Bank, the precedence given by the learned Single Judge to the Page 4 of 5 Uploaded by BINA SHAH(HC00353) on Mon Dec 15 2025 Downloaded on : Wed Dec 17 21:43:00 IST 2025 NEUTRAL CITATION C/CA/5871/2025 ORDER DATED: 11/12/2025 undefined provisions of Section 26-E of SARFAESI Act, 2002, cannot be said to suffer from any error of law.
12. For the above, we do not find any good ground to interfere. The appeal stands dismissed, both on the grounds of delay as well as on merits. Pending Civil Application is also disposed of.
(SUNITA AGARWAL, CJ ) (D.N.RAY,J) BINA SHAH Page 5 of 5 Uploaded by BINA SHAH(HC00353) on Mon Dec 15 2025 Downloaded on : Wed Dec 17 21:43:00 IST 2025