Bombay High Court
Tjsb Sahakri Bank Limited Thr. Deputy ... vs State Of Maharashtra Thr. Deputy ... on 9 September, 2024
Author: A. S. Chandurkar
Bench: A.S. Chandurkar
2024:BHC-AS:36335-DB
30-WP-2005-23.doc Rameshwar Dilwale
RAMESHWAR IN THE HIGH COURT OF JUDICATURE AT BOMBAY
LAXMAN CIVIL APPELLATE JURISDICTION
DILWALE
Digitally signed by WRIT PETITION NO.2005 OF 2023
RAMESHWAR
LAXMAN DILWALE
Date: 2024.09.10 TJSB Sahakari Bank Limited }
14:21:26 +0530
A Multi-State Co-operative Bank }
duly incorporated under the provisions }
of The Multi-State Co-operative Societies }
Act, 2002 having its registered office at }
Madhukar Bhawan, Road No.16, }
Wagle Estate, Thane 400 604. }
Through its Deputy General Manager }
Shri. Makrand Pandurang Godese, }
Aged Adult, Indian Inhabitant. } .. Petitioner
Vs.
1. State of Maharashtra }
Through the office the }
Deputy Commissioner of Sales Tax (E-901), }
Cabin No.356, 3rd Floor, Business Audit, }
Vikrikar Bhavan, Yerwada Pune 411 006 }
2. M/S Anish Engineers }
A partnership firm duly registered under }
the provisions of the Indian Partnership Act }
and having its principal place of business at }
Gat No.1532/1537, Sonawne Wasti, }
Jyotiba Nagar, Village Chikali, }
Taluka : Haveli, District: Pune, 412 114 }
Through its partners }
2.1 Shirish Shripad Kulkani }
Age: 49 Years, Residing at B-401, }
Subhashree Residency Phase-2, }
Near Jai Ganesh Vision Akurdi, Pune City, }
Pune: 411 035 }
2.2 Santosh Baburao Kad }
Age: 47 years, Residing at Flat No.1001, }
D-1, Ganga Skype, Vallabh Nagar, Pimpri, }
Pune :411 018. } . Respondents
...
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30-WP-2005-23.doc Rameshwar Dilwale
Mr. Aadesh M. Patil, Advocate for the petitioners.
Mr. N. C. Walimbe, Addl. GP with Mr. S. P. Kamble, AGP for the
respondent-State.
...
CORAM : A.S. CHANDURKAR &
RAJESH S. PATIL, JJ
DATE : 9th SEPTEMBER, 2024.
JUDGMENT :
(PER : A. S. CHANDURKAR, J)
1. Rule. Rule made returnable forthwith and heard learned
counsel for the parties. The petitioner, a Multi State Co-operative
Bank had approached this Court challenging the order of
attachment dated 27/06/2016 issued by the first respondent-
Deputy Commissioner of Sales Tax under Section 34 of the
Maharashtra Value Added Tax Act, 2002 (for short, "the Act of
2002") alongwith a notice dated 19/07/2016 issued in that
regard. The principal contention of the petitioner is that in view of
provisions of Section 26(E) of the Securitization and
Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 it has prior charge over the secured asset
especially in view of the fact that such interest has been created in
favour of the Co-operative Bank pursuant to mortgage deed dated
27/11/2012 executed in its favour. To recover its dues, the Co-
operative Bank issued notice under Section 13(2) of the Act of
2002 on 26/12/2014. The order of attachment had been issued
subsequently on 27/06/2016 and it is in that backdrop that the
30-WP-2005-23.doc Rameshwar Dilwale
petitioner claims priority over the Sales Tax Department for
recovery of its dues.
2. The learned counsel for the petitioner seeks to place reliance
on the decision of the Full Bench in Jalgaon Janta Sahakari Bank
Ltd and another Vs. Joint Commissioner of Sales Tax Nodal 9,
Mumbai and another, 2022(5) Mh.L.J. 691 and submits that the
subsequent action of attachment dated 27/06/2016 would not
result in the Sales Tax Department claiming priority over the dues
of the Co-operative Bank.
3. The learned Additional Government Pleader relied upon the
affidavit in reply filed by the Joint Commissioner of Sales Tax
wherein it had been stated that since the order of attachment was
dated 27/06/2016, it had priority over the Co-operative Bank
especially when the provisions of Section 26(E) of the Act of 2002
as amended came into force on 24/01/2020.
4. The issue raised is no longer res integra. The Full Bench in
Jalgaon Janta Sahakari Bank Ltd and another (supra) has
considered this very issue in paragraphs 153 and 154 of the said
decision and it has been observed as under:-
153. In these proceedings we are as much concerned
with proclamation itself as much with attachment.
Insofar as recovery pursuant to the MLR Code is
concerned, not only the provisions contained therein but
30-WP-2005-23.doc Rameshwar Dilwale
also the provisions contained in the 1967 Rules are to
be complied with. Simply ordering an attachment is not
enough; a proclamation has to be issued in the
prescribed form and such proclamation must be made
public by beating of drum and such other mode as
specified in section 192 of the MLR Code and rule 11(2)
of the 1967 Rules before the property attached is sold.
154. We are of the considered opinion, on facts and in
the circumstances, that unless attachment of the
defaulter's immovable property is ordered in the
manner ordained by the MLR Code and as prescribed
by the MRLR Rules and due proclamation thereof is
made, even the creation of charge on such immovable
property may not be of any real significance, not to
speak of demonstrating with reference to evidence that
the transferee had actual or constructive notice of such
charge. If there has been an attachment and a
proclamation thereof has been made according to law
prior to 24th January, 2020 or 1st September, 2016,
i.e., the dates on which Chapter IV-A of the SARFAESI
Act and section 31-B of the RDDB Act, respectively,
were enforced, the department may claim that its dues
be paid first notwithstanding the secured dues of the
secured creditors; but in the absence of an order of
attachment being made public in a manner known to
law, i.e., by a proclamation, once Chapter IV-A of the
SARFAESI Act or section 31-B, as the case may be, has
been enforced, the dues of the secured creditor surely
would have 'priority'. In other words, if the immovable
property of the defaulter is shown to have been
attached in accordance with law prior to Chapter IV-A
of the SARFAESI Act, or for that matter section 31-B of
the RDDB Act, being enforced, and such attachment is
followed by a proclamation according to law, the
'priority' accorded by section 26-E of the former and
section 31-B of the latter would not get attracted.
30-WP-2005-23.doc Rameshwar Dilwale
5. There is no material placed on record by the Sales Tax
Department that the attachment of the secured asset was made in
accordance with the provisions of the Maharashtra Land Revenue
Code, 1966 and the Rules framed thereunder. As held by the Full
Bench, an attachment made under the Code should be followed by
a proclamation as required by the Rules framed thereunder. If the
said procedure has not been followed, then the Sales Tax
Department would not be in a position to claim priority
notwithstanding the fact that the order of attachment was passed
prior to 24/01/2020. The affidavit filed on behalf of the Sales Tax
Department is silent in that regard.
6. In that view of the matter, we find that the petitioner is
entitled to succeed. Accordingly, the writ petition is allowed in
terms of prayer clause (a) which reads as under:-
(a) That the Hon'ble Court be pleased, upon
considering its propriety and validity, to quash and set
aside order of attachment dated 27.06.2016 issued, by
the Respondent the Deputy Commissioner of Sales Tax,
(E-901) I.B.A, Pune, under section 34 of the
Maharashtra Value Added Tax Act, 2002 and notice
dated 19.07.2016 issued to the Petitioner by the said
authority.
7. Rule is made absolute in aforesaid terms with no
order as to costs.
[ RAJESH S. PATIL, J. ] [ A.S. CHANDURKAR, J. ]
