INCOME TAX ACT, 1961

Section 281

Recovery - Certain transfers to be void - Priority of claim after attachment orders under section 281 - Property sold after attachment orders

Company availed credit facilities from petitioner-bank and other banks. Loan accounts became non-performing assets and hence measures under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 were initiated. A demand notice under section 13(2) of the Securitization Act was issued, followed by possession notices issued on various dates, both in respect of the properties of borrower company and in respect of the properties of third party guarantors. Held: Properties which petitioner bank had sold under Securitization Act, were that of third party guarantors. If petitioner bank had sold or attempting to sell the properties of company, then what Department contended might be right. Properties of a company ordered to be wound up under provisions of Insolvency and Bankruptcy Code, 2016, cannot be brought to sale by the bank under the Securitization Act. But, when the properties sought to be sold are that of third party guarantors, the said impediment could not stand in the way of the bank. Action of the Sub-Registrar in refusing to register the sale deeds, in view of orders of attachment passed by TRO, was not in accordance with law.

REFERRED :

FAVOUR : Petition dismissed

A.Y. :

SUBSCRIBE FOR FULL CONTENT