Bombay High Court Archives

Case Title : Purushottam Prabhakar Chavan v Deputy Commissioner of Sales Tax(GST)

Case no : Writ Petition No. 3477 of 2024Purushottam Prabhakar Chavan Versus Deputy Commissioner of Sales Tax (GST)

Order no : 3rd May, 2024

Quorum : Hon’ble Justice B.P. Colabawalla & Somashekar Sundareshan JJ

FACTS OF THE CASE

The Lender bank between the dates of 31st May 2010 and 31st January 2010 provided credit facilities to several properties including Walkeshwar Flats and Nashik Properties. Walkeshwar Flats was owned by Mrs Praffullata Shah and the said property served as security for loan, and after her demise the loans on that property became a non-performing asset. Despite that the lender banks claimed possession over the property by invoking SARFAESI Act.

The DCST claimed the property under MVAT Act due to the taxes owned by one of the borrowers. Recovery proceedings were initiated and the DCST secured the assets. The lender bank registered a mortgage on the property using CERSAI.

Later on the said property was Auctioned and won by the Petitioner but due to conflicting claims the petitioner faced problems getting the ownership of the property.

ISSUES

Whether as a matter of law, the Petitioner, the auction purchaser of the Walkeshwar Flat under the SARFAESI Act, is a valid recipient of free and marketable title to it ?

LEGAL PROVISIONS

Article 226 of the Indian Constitution : Clearly states that every High Court has the powers throughout the territories in relation to which it exercises jurisdiction to issue writ or any order to any person or authority.
Section 37 of Maharashtra Value Added Tax Act, 2002 : would override any provision of contract that creates a charge, it would be subservient to any provision in a Central Act that gives first charge to some other entity
Section 26-E of the SARFAESI Act : after the commencement of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), in cases where insolvency or bankruptcy proceedings are pending in respect of secured assets of the borrower, priority to secured creditors in payment of debt shall be subject to the provisions of that Code.

CONTENTION OF THE PARTIES

The contentions of the Directorate of Commercial Taxes are establishing their right to enforce tax dues against the Walkeshwar Flat, particularly in relation to Bharat Shah’s liability as a partner of SMI in the mortgage of the property. The DSCT argue that Bharat, as a legal heir of Mrs. Praffullata, inherits the property, thereby providing a basis for the DCST to assert their claim against it. However, the petitioner argues against this stance by emphasizing the priority of enforcement established by the Lender Bank through SARFAESI Act, including registration of the mortgage under CERSAI and obtaining physical possession of the said property.

The petitioner contends that the DCST’s attachment orders were after the Lender Bank’s actions and are therefore priority can be established by the Lender Bank’s registered security interest. They rely on the case of Jalgaon Janta, to support their argument that security interests registered with CERSAI take precedence over attachment orders by tax authorities.

Overall, the petitioner asserts that the legal framework supports their claim to priority in enforcement against the Walkeshwar Flat, and any further action by the DCST would be after the rights established by the Lender Bank’s actions under the SARFAESI Act.

COURT’S ANALYSIS AND JUDGMENT

The court looked into the contentions of both the parties and admitted the Petition with no costs imposed. The court ruled that attachment orders predating January 24, 2020, do not grant priority to the DCST over the Walkeshwar Flat. As the DCST did not register with CERSAI nor issue a proclamation of sale, the Lender Bank’s priority remains intact, passing to Encore ARC. Consequently, the petitioner gains a clear title, unaffected by the DCST’s claim. Any attachment related to tax dues by SMI on the property is nullified, allowing the petitioner to register it unopposed.

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JUDGMENT REVIEWED BY – Nagashree N M

Case Title – Aniruddha Ganesh Pathak Vs. Registrar General, Bombay High Court & Anr.

Case Number – Writ Petition No. 15539 of 2022

Dated on – 23^rd April,2024

Quorum – Justice A.S. Chandurkar and Justice Jitendra Jain

FACTS OF THE CASE

In the Case of Aniruddha Ganesh Pathak Vs. Registrar General, Bombay High Court & Anr., Aniruddha Ganesh Pathak, the Appellant in the said case, was appointed as a Civil Judge Junior Division on 19^th of March,2010. During the term of Aniruddha’s serving as the Civil Judge Junior Division, several complaints were instituted against Aniruddha Ganesh Pathak stating his misbehaviour, absenteeism and presiding over the court under the due influence of alcohol. Aniruddha Ganesh Pathak’s misconducted was highlighted from the reports of the Principal District and Sessions Judge, Nandurbar and the Shahada Bar Association. A discerning inquiry was conducted by the District Judge, Jalgaon during which it was observed that Aniruddha Ganesh Pathak’s behaviour was irregular which included not following court timings and wandering around in the near vicinity of the court. On dated 6^th of January, 2018, Aniruddha Ganesh Pathak was involved himself in a serious incident at the Maharashtra Judicial Academy at Uttan, where he was spotted in an intoxicated state during a mediation course. Subsequently, he was relieved from the course. Charges were framed against Aniruddha Ganesh Pathak, which comprised of not following court timings, defection of duty, and being inebriated during the official duties. An inquiry committee found Aniruddha Ganesh Pathak guilty of charges 1,6 and 7 leading to his removal from the Judicial Service under Rule 5(1)(viii) of the Maharashtra Civil Services (Discipline and Appeal) Rules, 1979.

CONTENTIONS OF THE APPELLANTS

The Appellant, through their counsel, in the present case contented that the order of disposition was based on conjectures and lacked concrete evidences.
The Appellant, through their counsel, in the present case contented that the Appellant was not adequately examined after the incident at Uttan and that the testimonies of the witnesses were conflicting.
The Appellant, through their counsel, in the present case contented that the punishment of disposal from the position of power was disproportionate to the charges against him.
The Appellant, through their counsel, in the present case relied on the past judgment of the court, including the Udaysingh s/o Ganpatrao Naiknimbalkar Vs. Governor, State of Maharashtra, Bombay & Ors. And Rahul s/o Abhimanyu Ranpise Vs. The State of Maharashtra & Anr., to support the contentions of the Appellant.

CONTENTIONS OF THE RESPONDENT

The Respondent, through their counsel, in the present case contented while supporting the order of disposal of the Appellant, that the court should emphasize on the need for judges to uphold high standards of conduct.
The Respondent, through their counsel, in the present case contented that the evidences clearly established the misconduct and inadequate behaviour of Aniruddha Ganesh Pathak while presiding over the court as well as in the vicinity of the court, justifying his disposition from the Judicial Services.
The Respondent, through their counsel, in the present case cited the seriousness of the charges and the importance of maintaining the dignity of the judiciary.

LEGAL PROVISIONS

Article 226 of the Constitution of India prescribes the Power of the Courts to issue Writs.
Rule 5 (1)(viii) of the Maharashtra Civil Services (Discipline and Appeal) Rules, 1979 governs the removal of the civil servants for misconduct.

ISSUES

The main issues in the present case revolves around whether the charges against Aniruddha Ganesh Pathak were proven?
Whether the punishment of disposition of Aniruddha Ganesh Pathak was proportionate to the charges imposed on him?
Whether there were any irregularities in the procedure in the disciplinary process?

COURT ANALYSIS AND JUDGMENT

The court in the case of Aniruddha Ganesh Pathak Vs. Registrar General, Bombay High Court & Anr., recognised the narrow scope of the Judicial Review in the matter of services, stating that interference is warranted only if there are irregularities in the procedures or arbitrariness in the decision making. The court referred to the precedents and replicated the duty of the judiciary to uphold high standards of integrity and conduct. The court observed that the charges against Aniruddha Ganesh Pathak, including not following the timings of the court and being inebriated while presiding over the court were supported with substantial evidences. The court, considering the grave nature of the charges and the significance of judicial integrity, rejected the contentions of the Appellant that the punishment of disposition was disproportionate. The court in the present case, held that there were no irregularities in the procedures followed in the disciplinary process and that the decision of disposition of the Appellant from the service was justified. The court overturned and deemed inapplicable, all the precedents cited by the appellant, further strengthening the case of the disposition of the Appellant. The court, in the end, dismissed the Writ Petition instituted by the Appellant, upholding the decision of the disposition of the Appellant from the judicial services.

Judgement Reviewed by – Sruti Sikha Maharana

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