UNION OF INDIA Vs. DEBT RECOVERY TRIBUNAL

JUDGEMENT

(1.) THIS writ petition is directed against the order dated 6-7-2004 passed by the Recovery Officer, Debt recovery Tribunal, Chandigarh.

(2.) THE undisputed facts are that the assessee respondent No. 4 had obtained a loan from the Indian Bank. In consideration of the grant of loan and to ensure repayment thereof, the assessee had mortgaged his property with the Bank on 18-2-1986. Thereafter, the assessee failed to repay the loan amount to the Bank and the Bank initiated proceedings for recovery of the amount. The matter was decided in favour of the Bank on 13-7-2001 when recovery certificate was issued. The mortgaged property was put to sale and the proceeds of the sale were lying with the Debt Recovery Tribunal. At this stage, the Union of India moved an application on 8-8-1997 praying that an amount of Rs. 506/- lacs was due to it from the assessee on account of arrears of central excise dues and, therefore, the entire sale proceeds of Rs. 81. 00 lacs be released to the Union of India. This application has been rejected by the Recovery Officer on the ground that the Bank is also a central Government Undertaking, and therefore, the debt of the State cannot rank higher than that of the Bank. This order is under challenge before us in the present petition.

(3.) WE have heard Shri Sandeep Sharma, learned Addl. Solicitor General for the petitioner and Mr. C. P. Sood learned counsel for the Indian Bank.