Madhya Pradesh High Court
Small Industries Development Bank Of ... vs Commercial Taxes Department on 3 July, 2017
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W P Nos. 4441/2015 and 4600/2015
03/07/2017
Parties through their counsel.
Regard being had to the similitude in the
controversy involved in the present cases, the writ
petitions were analogously heard and by a common order,
they are being disposed of by this Court. Facts of Writ
Petition No. 4441/2015 are narrated hereunder.
The present Writ Petition is of the year 2015 and
inspite of 10 opportunities, no reply has been filed by the
State Government and, therefore, the matter is being
disposed of in the light of the judgment delivered by this
Court in an identical case.
The present Writ Petition has been filed challenging
the auction notice dated 27/6/2015 and as per the relief
clause it has been stated that respondent No.2
Commercial Tax Officer has not done proper valuation of the property in question. However, learned counsel for the petitioner, at the outset, has argued before this Court that on account of amendment dated 16/8/2016 the Bank is having first charge over the property and not the State Government.
This Court has dealt with a similar controversy in the case of Bank of Baroda Vs. Commissioner of Sales
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Tax and another (W.P.No. 5909/2016, decided on 16/11/2016). The order passed by this Court dt. 16/11/2016 reads as under :
WP-2151-2016 (PUNJAB NATIONAL BANK Vs THE STATE OF MADHYA PRADESH) 16-11-2016 Parties through their counsel.
Petitioner before this Court, Punjab National Bank, has filed this present petition against the attachment order dated 06.02.2016 issued by the Additional Tehsildar and Commercial Tax Officer by which property in question has been attached by the respondent No.2 in order to recover the commercial tax dues.
Learned counsel for the petitioner has vehementally argued before this Court that Bank is having first charge over the property in question and, therefore, the property cannot be attached by the State Government nor by the Commissioner, Commercial Tax Department nor by the Commercial Tax Officer.
He has drawn attention of this Court towards the notification published in the Gazette of India on 16.08.2016 in respect of Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016. Section 41 of the aforesaid amendment reads as under:-
41. In the principal Act, after section 31A, the following section shall be inserted, namely:-
31B.Notwithstanding anything contained in any other law for the time being in force, the rights of secured creditors to realise secured debts due and payable to them by sale of assets over which security interest is created, shall have priority and shall be paid in priority over all other debts and Government dues including revenues, taxes, cesses and rates due to the Central Government, State Government or local authority.
Explanation : For the purposes of this section, it is hereby clarified that on or after the commencement of the Insolvency and Bankruptcy Code, 2016, in cases where insolvency or bankruptcy proceedings are pending in respect of secured assets of the borrower, priority to secured creditors in payment of debt shall be subject to the provisions of that Code. The aforesaid amendment makes it clear that the
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Bank is having first charge over the property in question.
In light of the aforesaid insertion of 31B in the Act, no further orders are required to be passed in the matter. Petitioner-bank is having first charge over the property in question. Resultantly, the impugned notice is hereby set aside. Petitioner bank shall be free to proceed further in the matter.
In other connected matters also, in light of the amendment, the notice issued by the Commercial Tax Officer/attachment order issued by the respondents/ Commissioner of Sales Tax/State Government are set aside and the petitioner-Bank shall be free to proceed ahead with the auction process to recover the dues.
In the light of the aforesaid order passed by this Court, the present Writ Petition also stands allowed. The petitioner - Bank shall be free to proceed ahead in the matter keeping in view the statutory provision as contained under the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016. The auction notice dated 27/6/2015 issued by the respondent No.2 is quashed.
A copy of this order be kept in the record of Writ Petition No. 4600/2015.
(S. C. SHARMA) JUDGE KR