Legal Reference Library

In H.P. State Cooperative Bank Ltd. Vs. State of H.P., the Himachal Pradesh High Court held that dues to the State shall have priority. Referring to various judgments, the court said - “126. While enacting the DRT Act and the Securitisation Act, Parliament was aware of the law laid down by this Court wherein priority of the State dues was recognised. If Parliament intended to create first charge in favour of banks, financial institutions or other secured creditors on the property of the borrower, then it would have incorporated a provision like Section 529-A of the Companies Act or Section 11(2) of the EPF Act and ensured that notwithstanding series of judicial pronouncements, dues of banks, financial institutions and other secured creditors should have priority over the State’s statutory first charge in the matter of recovery of the dues of sales tax, etc. However, the fact of the matter is that no such provision has been incorporated in either of these enactments despite conf...

SARFAESI Act; Tom Thomas Vs. State Bank of India Overseas Branch, Willington Island [Kerala High Court, 30-11-2016] Contents Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 128. Surety’s liability 140. Rights of surety on payment or performance 141. Surety’s right to benefit of creditor’s securities Bank of Bihar v. Damodar Prasad, AIR 1969 SC 297 Wright v. Simpson, (1802)6 Ves Jun 714 Union Bank of India v. Manku Narayanan, AIR 1987 SC 1978 State of Bank of India v. M/s. Indexport Registered, AIR 1992 SC 1740 Jagannath Ganeshram Agarwala v. Shivnarayan Bhagirath, AIR 1940 Bom. 247 A.P. State Financial Corporation v. M/s. Gar Re-rolling Mills, AIR 1994 SC 2151 Industrial Investment Bank of India Ltd. v. Biswanath Jhunjhunwala, (2009) 9 SCC 478 United Bank of India v. Satyawati Tondon and Others, (2010) 8 SCC 110 Ram Kishan v. State of U.P., (2012 11 SCC 511 Central Bank of India v. Vimla, (2015) 7 SCC 337 1. Applicat...

In Sonoma Management Partners Pvt. Ltd. Vs. Bank of Maharashtra, the Hon'ble Bombay High Court found that the amount of sales tax was not disclosed to the final auction buyer till after the sale of the asset has been completed. Further the amount due from the defaulting company cannot be claimed from the auction purchaser can by no stretch of the imagination be termed as a successor of the business of the Defaulter Company. The Hon'ble court said that in State of Karnataka & Anr Vs. Shreyas Papers Pvt. Ltd., (2006) it has been held that  a charge may not be enforced against a transferee if she/he has had no notice of the same, unless by law, the requirement of such notice has been waived. The Hon'ble court also mentioned the newly amended Sections 26D & E of the SARFAESI Act which states :- " 26D. Notwithstanding anything contained in any other law for the time being in force, from the date of commencement of the provisions of this Chapter, no secure...