JAHAAN STEEL LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) Since common issues are involved in both these petitions and facts are also substantially similar, the same were taken up for hearing together and decided by this common judgment.

(2.) The facts of each case may be stated briefly.

(3.) Mr. B.T. Rao, learned counsel for the petitioners submitted that the third respondent was not justified in refusing to grant registration to the petitioner inasmuch as the petitioner is not the successor of M/s. Shri Pramukh Industries Private Limited nor has it taken over the business of the said unit. Under the circumstances, the petitioner is not liable to pay the outstanding dues of the erstwhile owner. It was pointed out that M/s. India Steel Traders had purchased the subject property from the G.S.F.C. pursuant to a tender notice issued by it. It was submitted that it is settled legal position as held by the Supreme Court in the case of Union of India v. SICOM Ltd., (2009) 2 SCC 121 that a debt which is secured or which by reason of the provisions of a statute becomes the first charge over the property having regard to the plain meaning of Article 372 of the Constitution of India must be held to prevail over the Crown debt which is an unsecured one. Thus, once the G.S.F.C, as a secured creditor has sold the subject property to M/s. India Steel Ltd., the Central Excise Authorities cannot lay any claim to recover any outstanding dues in respect of the said property. The petitioner is, therefore, not liable to pay any of the outstanding dues of the previous occupier and that the respondents are not justified in insisting for payment of the outstanding amount of the previous owner as a condition precedent for granting registration.