CANARA BANK TEPPAKULAM BRANCH 26 NANDHIKOIL STREET TEPPAKULAM, TRICHY 620 002. Vs. THE RECOVERY OFFICER, OFFICE OF THE TAX RECOVERY OFFICER I INCOME

JUDGEMENT

(1.) The petitioner is Canara Bank a Nationalised Bank represented by its Chief Manager and Authorised Officer, Teppakulam Branch, Trichy, and in this writ petition they seek for a direction upon the first respondent, the Recovery Officer, Income-Tax Department-Range-II, Trichy, to lift the order of attachment dated 20.11.2015 and the attachment order dated 02.12.2016.

(2.) The facts which are necessary for the disposal of the writ petition are as hereunder:

(3.) The borrower M/s. Rathna Stores Private Limited defaulted in repayment of the loan and the account of the Company was classified as nonperforming on 05.11.2014. On 25.02.2015, the Authorized Officer of the petitioner bank issued a demand notice to the Company and two others including the second respondent/guarantor calling upon them to pay a total amount of Rs. 28,96,34,614.30/- due as on 25.02.2015 together with interest within a period of ninety days. The Company as well as the second respondent were informed that if they committed default in payment, the property which has been mortgaged would be brought for sale in accordance with the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act). The borrower as well as the second respondent guarantor defaulted to comply with the notice and therefore, the Authorized Officer of the petitioner's bank took symbolic possession of the property and also caused publication of the possession notice in English and Tamil News Papers having wide circulation in the area. Even thereafter, the borrower nor the guarantor complied with the directions and did effect any payment. The property was brought for sale on various dates, but, there were no bidders and the petitioner bank came to know that there were no bidders because M/s. Pothys Private Limited were in possession of the property and they secured an interim order in W.P.No.15785 of 2016. According to the said order, the bank was directed to hand over physical possession of the property to the said Company and further directed the Company to redeliver physical possession to the bank upon sale of the property. Subsequently it appears that the petitioner bank came to know that there were attachments made by the Income Tax Department over the said property. On verification, it was found that by order dated 20.11.2015, the first respondent attached the property and also registered the same on the file of the Sub-Registrar, T.Nagar, as document No.42 of 2015. Similarly on 02.12.2016, the first respondent attached the property and attachment was registered as document No.18 of 2016. The petitioner would submit that they being secured creditors and the mortgage having been created in their favour by registered instrument was of the year 2014 and the attachment of the Income Tax Department all being subsequent to their mortgage, they have the first charge of the property and they are entitled to bring the property for sale. With these facts, the petitioners prays for the aforementioned relief.