Kerala High Court
State Of Kerala vs Bank Of Baroda on 3 January, 2022
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR
&
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
Monday, the 3rd day of January 2022 / 13th Pousha, 1943
WA NO. 616 OF 2021
AGAINST JUDGMENT DATED 15.12.2020 IN WP(C) 35082/2019 OF THIS COURT.
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APPELLANTS/RESPONDENTS 1 TO 3 IN WP(C):
1.STATE OF KERALA,REPRESENTED BY ITS SECRETARY TO GOVERNMENT,
DEPARTMENT OF TAXES,SECRETARIAT,THIRUVANANTHAPURAM.
2.DISTRICT COLLECTOR,COLLECTORATE,CIVIL STATION,
ALAPPUZHA, PIN-688 001.
3.THASILDAR (REVENUE RECOVERY), AMBALAPUZHA,
KIDANGAMPARAMP, ALAPPUZHA-688 013.
BY SENIOR GOVERNMENT PLEADER SRI.K.P.HARISH
RESPONDENT/PETITIONER IN WP(C):
BANK OF BARODA, ROSARB,ERNAKULAM, PALLIMUKKU, M.G.ROAD,
ERNAKULAM, REPRESENTED BY ITS CHIEF MANAGER.
BY ADV.SRI.K.M.ANEESH
Prayer for interim relief in the Writ Appeal stating that in the
circumstances stated in the appeal memorandum, the High Court be pleased
to stay the operation and implementation of common judgment dated
31.12.2020 in WP(C) No.35082/2019, pending disposal of the Writ Appeal.
This Writ Appeal coming on for admission on 03/01/2022 upon perusing
the appeal memorandum, the court on the same day passed the following:
P.T.O.
S.Manikumar, C.J.
&
Shaji P.Chaly, J.
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W.A.No.616 of 2021
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Dated this the 3rd day of January, 2022
ORDER
S.Manikumar, C.J.
Being aggrieved by the judgment in W.P.(C)No.35082 of
2019 dated 15.12.2020, on the following findings and
directions issued, instant writ appeal is filed:
"7. It is seen from records that subject property was taken
possession under the SARFAESI Act by the petitioner as the loan
account became Non Performing Asset. On the very same
property, the respondent/State is contending that it has first
charge for recovery of dues of the sale tax. The 3 rd respondent
had issued a communication dated 25.11.2019 to the effect that
the property is attached by the State and the petitioner bank
should provide access to the property. Similar is the notice at
Ext.P3 issued by the District Collector, asking the petitioner to
open the gate and door of the property of which the possession is
taken by the petitioner under the SARFAESI Act.
8.The question which falls for consideration is whether the
State has better right over the secured assets for recovery of its
dues. This question is no more res integra. The petitioner has
rightly relied on the judgments of this Court in Travancore
W.A.No.616 of 2021
Devaswom Board V. Local Fund Audit reported in 2020(3)
KLT 296 and State Bank of India V. State of Kerala reported
in 2019(4) KLT 521. Perusal of the rulings cited by the learned
Standing Counsel appearing for the petitioner makes it clear that
Section 26E of the SARFAESI Act and Section 31B of the RDB Act
create a 'First Charge' by way of a priority to the Banks/Financial
Institutions to recover and satisfy their debts, notwithstanding
any statutory 'First Charge' in favour of the Revenue.
9. In the light of law laid down by this Court in the above
mentioned rulings, the petition deserves to be allowed and the
same is allowed by quashing and setting aside Exts.P1 and P3
communications issued by respondents and quashing the
attachment of the secured assets by the respondents.
The writ petition is accordingly, allowed. "
2. On the basis of the grounds and inviting the
attention of this court to a Division Bench judgment of the
Madras High Court in Sridhar V. v. Authorized Officer
Indian Bank, Guindy Branch, Chennai reported in 2018
KHC 2927, Mr.K.P..Harish, learned Senior Government
Pleader, submitted that the writ court has failed to consider
that the Bank cannot bring the subject property for auction
W.A.No.616 of 2021
without disclosing the encumbrances attached to the
properties as well as the litigation.
3. Judicial notice is also taken that there are several
writ appeals pending on the file of this court on the issue as
to whether, the State or the Bank would have the first
charge on the property, where revenue recovery proceedings
have already been initiated or finalised, as the case may be.
Giving due consideration to the rival submissions, we are
inclined to entertain the writ appeal. Accordingly, writ appeal
is admitted.
4. As regards interim relief, though it is the contention
of Mr.K.M.Aneesh, learned counsel for the respondents/writ
petitioners, that there need not be any stay of the impugned
judgment, ii is admitted that a contempt application is
pending before the learned Single Judge with regard to the
non-compliance of the directions contained in the judgment.
That apart, a larger issue, as stated supra, is also pending on
the file of this court in a batch of writ appeals.
W.A.No.616 of 2021
In the light of the above, there shall be an interim stay
of the directions issued by the writ court in W.P.(C)No.35082
of 2019 dated 15.12.2020.
Sd/-
S.Manikumar
Chief Justice
Sd/-
Shaji P.Chaly
Judge
smv
03-01-2022 /True Copy/ Assistant Registrar
