STATE OF GUJARAT Vs. BANK OF BARODA

JUDGEMENT

(1.) This intra court appeal has been filed assailing the correctness and legality of the judgment and order dtd. 16/9/2019 passed in Special Civil Application No.12995 of 2018.

(2.) We have heard Mr. Chintan Dave, learned Assistant Government Pleader appearing for the State and Ms. Nalini S. Lodha, learned counsel appearing for the respondent bank.

(3.) The lis between the writ-applicant viz. respondent No.1 herein and the State was on narrow compass before the learned Single Judge viz. as to whether the Crown debt would prevail over the claim of a secured creditor. On the one hand, the secured creditor who had obtained mortgage of the property which was the subject matter of auction claimed that for securing the loan involved the subject property was mortgaged by the owners of the property and as such, subsequent claim of the State to have precedence over the secured creditor on the strength of Crown debt should not be accepted. This rival contention raised before the learned Single Judge insofar as the contention of the State is concerned, was negatived and the contention raised by the bank was upheld after referring to plethora of judgments. In fact, we may note with benefit the judgment of the Hon'ble Apex Court in the case of Rana Girders Limited vs. Union of India [(2013) 10 SCC 746] wherein it came to be held that a debt, which is secured or which by reason of the provisions of a statute it becomes the first charge over the property must be held to prevail over the Crown debt which is an unsecured one. On this reasoning, the debt payable to secured creditor like the Financial Corporation was prioritised vis-a- vis the Central Excise Dues in the said case. Even in the instant case, the State is claiming priority over the secured creditor which has been rightly negatived by the learned Single Judge, as noticed hereinabove after referring to the catena of judgments. As such, interfering with the well reasoned order of the learned Single Judge is not called for in the instant case. No other good ground is made out. Hence, appeal stands dismissed. All pending Misc. Applications stand consigned to records.