SBICAP TRUSTEE COMPANY LTD vs. TAX RECOVERY OFFICER,

WP/19725/2014HC KarnatakaKAHC01017522201415 October 2024Author: M.I.ARUN13 pages

AI SummaryWithdrawn

What did the High Court hold?

The High Court of Karnataka, in its order dated October 15, 2024, did not adjudicate on the merits of the case. The learned Senior Counsel for the petitioners, Sri. Vikram A. Huilgol, submitted that the writ petitions may be dismissed as not pressed. Memos to this effect were filed by the petitioners. Consequently, the Court placed the submissions and memos on record and ordered the dismissal of both writ petitions as not pressed. No findings were made on the substantive issues regarding the priority of charges or the claims of the petitioners and the revenue authorities.

What were the facts?

These two writ petitions, WP No. 19727 of 2014 and WP No. 19725 of 2014, were filed before the High Court of Karnataka. The petitioners in both petitions are various banks and financial institutions, including SBICAP Trustee Company Ltd., State Bank of India, Axis Bank Limited, and others. The respondents include tax authorities (Assistant Commissioner of Service Tax, Deputy Commissioner of Service Tax, Commissioner of Service Tax, Union of India) and tax recovery officers, as well as Kingfisher Airlines Limited and MESCO Aero Space Ltd. The core of the dispute involved claims of first charge and priority over the assets of Kingfisher Airlines Limited, with the petitioners asserting their secured claims against the claims made by the revenue authorities.

What were the issues?

The primary issue before the High Court was to decide whether the petitioners, as secured creditors, had a first charge and priority over the assets of Respondent No. 6 (Kingfisher Airlines Limited) as against the claims made by the revenue authorities (Respondents No. 1 to 5 in WP 19727/2014 and Respondents No. 1 to 5 in WP 19725/2014). The petitioners argued that their secured financial interests in the assets of Kingfisher Airlines Limited should take precedence over any claims by the tax departments. The revenue authorities, on the other hand, would likely contend for the priority of statutory tax dues. The judgment does not explicitly detail the arguments of each side beyond the general nature of the dispute, but the core question revolves around the priority of charges under relevant laws, likely involving provisions related to secured debts and tax recovery.

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

WP No. 19727 of 2014

WP No. 19725 of 2014

Read from the judgment's own cause title. This page is filed under one of them.

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF OCTOBER, 2024 BEFORE THE HON'BLE MR JUSTICE M.I.ARUN WRIT PETITION NO. 19727 OF 2014 (T-RES) C/W WRIT PETITION NO. 19725 OF 2014 (T-IT)

IN WP No. 19727/2014

BETWEEN:

SBICAP TRUSTEE COMPANY LTD., 6TH FLOOR, APEEJAY HOUSE, DINSHAW WACHHA ROAD, CHURCHGATE, MUMBAI-400 020. REP. BY AUTHORIZED OFFICER, MR. LAKSHMINARAYANA RAO.

A BANKING CORPORATION CONSTITUTED UNDER THE STATE BANK OF INDIA ACT, 1955 (23 OF 1955) HAVING ITS CORPORATE CENTRE AT STATE BANK BHAVAN, MADAME CAMA ROAD,

AXIS BANK LIMITED A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 AND MEANING OF SECTION 5(C) OF THE BANKING REGULATION ACT, 1949 AND TRISHUL, THIRD FLOOR, OPP. SAMARTHESWAR TEMPLE, AHMEDABAD 380 006,

Digitally signed by CHAITHANYA K Location: High Court of Karnataka

GUJARAT, INDIA AND HAVING ITS CORPORATE OFFICE AT AXIX HOUSE, C-2, WDIA INTERNATIONAL CENTRE, PANDURANG BUDHKAR MARG WORLI MUMBAI-400 025.

BANK OF BARODA TRANSFER OF UNDERTAKING) ACT,1970 (5 OF 1970) BARODA HOUSE, P.B.NO.506, MANDAVI, VADODARA-396 006.

OFFICE AT P.O. BOX 11745, SAMATA BUILDING, GENERAL BHOSALE MARG

JM FINANCIAL ASSET RECONSTRUCTION CO. PVT. LTD., HAVING ITS REGD. OFFICE AT7TH FLOOR, ENERGY, APPA SAHEB MARATHE MARG, PRABHADEVI, MUMBAI 400 025.

CORPORATION BANK TRANSFER OF UNDERTAKING) ACT, 1980 (40 OF 1980) HAVING ITS CORPORATE OFFICE AT MANGALADEVI TEMPLE ROAD, PANDESHWAR, MANGALORE 575 001.

AND HAVING ITS INDUSTRIAL FINANCE BRANCH, AT RALLARAM MEMORIAL BLDG., 1ST FLOOR, CSI COMPOUND, MISSION ROAD, BANGALURU-560 027.

THE FEDERAL BANK LIMITED A COMPANY WITHIN THE MEANING OF THE COMPANIES ACT,1956, FEDERAL TOWERS, ALUVA-683 101, KERALA. AND HAVING ITS BRANCH OFFICE AT ST.MARKS ROAD 9, HALCYON COMPLEX, ST. MARKS ROAD, BANGALORE-560 001.

IDBI BANK LIMITED A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 AND MEANING OF THE BANKING REGULATION ACT,1949 IDBI TOWER, WTC COMPLEX, CUFFE PARADE, MUMBAI-400 005 MAHARASHTRA, INDIA.

AND ACTING THROUGH ITS BRANCH OFFICE AT CORPORATE BANKING GROUP-FAMG 9TH FLOOR, IDBI TOWER, WTC COMPLEX, CUFFE PARADE, COLABA, MUMBAI-400 005.

INDIAN OVERSEAS BANK, UNDERTAKING) ACT, 1970 HAVING ITS CENTRAL OFFICE AT 763, ANNA SALAI, CHENNAI-600 002.

"HARIKRIPA" 26-A, S.V. ROAD, SANTACRUZ (W), MUMBAI-400 054.

10.

PUNJAB & SIND BANK, BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKING) ACT,1980

HAVING ITS HEAD OFFICE AT21, RAJENDRA PLACE, NEW DELHI 110 008.

AND HAVING AMONGST OTHERS, A BRANCH OFFICE AT J.K. SOMANI BUILDING, BRITISH HOTEL LANE, FORT, MUMBAI-400 023.

11.

PUNJAB NATIONAL BANK (ACQUISITION AND TRANSFER OF UNDERTAING) ACT, 1970 (5 OF 1970) 7, BHIKAJI CAMA PALACE, NEW DELHI-110 607.

ACTING THROUGH ITS LARGE CORPORATE BRANCH AT CENTENARY BUILDING, 28, M.G. ROAD, BENGALURU-560 009.

12.

STATE BANK OF MYSORE, UNDER THE STATE BANK OF INDIA (SUBSIDIARY BANKS) ACT, 1959, KEMPE GOWDA ROAD, BENGALORE-560 009.

AND ITS CORPORATE ACCOUNTS BRANCH AT NO.18, RAMANASHREE ARCADE, M.G. ROAD, BANGALORE-560 001.

13.

UCO BANK, UNDER THE BANKING COMPANIES (ACQUISITION & TRANSFER OF UNDERTAKINGS) ACT,1970 AND HAVING ITS HEAD OFFICE AT 10, BTM SARANI, KOLKATA-700 001, WEST BENGAL, INDIA.

1ST FLOOR,13/22, K.G. ROAD,

14.

UNITED BANK OF INDIA UNDERTAKING) ACT,1970 (5 OF 1970) 11, HEMANTA BASU SARANI, KOLKATA-700 001.

OFFICE AT 40, K.G. ROAD,

PETITIONER NOs.2 TO 14 ARE REPRESENTED BY MR. S. RANGA VITTAL, AGED ABOUT 50 YEARS S/O MR.C.N. SRINIVASAN ASSISTANT GENERAL MANAGER & RELATIONSHIP MANAGER AMT IV (SMG-V) HVING ITS INDUSTRIAL FINANCE BRANCH AT 61, RESIDENCY PLAZA, RESIDENCY ROAD,

…PETITIONERS (BY SRI. VIKRAM A.HUILGOL, SENIOR COUNSEL FOR SRI. VEERENDRA PATIL, ADVOCATE)

AND:

ASSISTANT COMMISSIONER OF SERVICE TAX DIVISION III, HAVING OFFICE AT 2ND FLOOR, MADHU INDUSTRIAL ESTATE, PB MARG, WORLI, MUMBAI-400 013.

DEPUTY COMISSIONER OF SERVICE TAX HAVING OFFICE AT 2ND FLOOR, MADHU INDUSTRIAL ESTATE, PB MAG, WORLI, MUMBAI 400 013.

ADDITIONAL COMMISSIONER OF SERVICE TAX 2ND FLOOR, MADHU INDUSTRIAL ESTATE, WORLI, MUMBAI-400 013.

COMMISSIONER OF SERVICE TAX, 16/1, SERVICE TAX COMMISSIONERATE, S P COMPLEX LALBAGH ROAD, BANGALORE-560 027.

UNION OF INDIA, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA, NEW DELHI-110 001. REPRESENTED BY SECRETARY.

KINGFISHER AIRLINES LIMITED A PUBLIC LIMITED COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 & HAVING ITS REGISTERED OFFICE AT UB TOWER, LEVEL 12, UB CITY, 24, VITTAL MALLYA ROAD, BENGALURU-560 001. REP. BY ITS MANAGING DIRECTOR.

MESCO AERO SPACE LTD., D-12, FREEDOM FIGHTER ENCLAVE, NEB SANAI, NEW DELHI-110 068. REP. BY ITS CHIEF OPERATING OFFICER, MR.MANOJ PANDEY. …RESPONDENTS (BY SRI. JEEVAN J NEERALGI FOR R1-5, ADVOCATE; SRI. RAJESH D.M., ADVOCATE FOR R6; SRI. RAVISHANKAR R., ADVOCATE FOR R7)

THIS PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO DECLARE THAT THE PETITIONERS HAVE FIRST CHARGE AND PRIORITY OVER

THE ASSETS OF RESPONDENT NO.6 SECURED WITH THE PETITIONERS AS AGAINST THE CLAIMS MADE BY RESPONDENT NOs.1 TO 5 AGAINST RESPONDENT NO.6 AND ETC.

IN WP NO. 19725/2014

BETWEEN:

SBICAP TRUSTEE COMPANY LTD., 6TH FLOOR, APEEJAY HOUSE, DINSHAW WACHHA ROAD, CHURCHGATE, MUMBAI-400 020. REP. BY AUTHORIZED OFFICER, MR. LAKSHMINARAYANA RAO.

A BANKING CORPORATION CONSTITUTED UNDER THE STATE BANK OF INDIA ACT, 1955 (23 OF 1955) HAVING ITS CORPORATE CENTRE AT STATE BANK BHAVAN, MADAME CAMA ROAD,

AND HAVING ITS INDUSTRIAL FINANCE BRANCH AT 61, RESIDENCY PLAZA, RESIDENCY ROAD,

AND HAVING ITS CORPORATE OFFICE

AT AXIX HOUSE, C-2, WADIA INTERNATIONAL CENTRE, PANDURANG BUDHKAR MARG, WORLI MUMBAI-400 025.

BANK OF BARODA TRANSFER OF UNDERTAKING) ACT,1970 (5 OF 1970) BARODA HOUSE, P.B.NO.506, MANDAVI, VADODARA-396 006.

OFFICE AT P.O.BOX 11745, SAMATA BUILDING, GENERAL BHOSALE MARG, NARIMAN POINT, MUMBAI-400 021.

M/S JM FINANCIAL ASSET RECONSTRUCTION CO. PVT. LTD., HAVING ITS REGD. OFFICE AT 7TH FLOOR, ENERGY, APPA SAHEB MARATHE MARG, PRABHADEVI, MUMBAI 400 025.

CORPORATION BANK, TRANSFER OF UNDERTAKING) ACT, 1980 (40 OF 1980) HAVING ITS CORPORATE OFFICE AT MANGALADEVI TEMPLE ROAD, PANDESHWAR, MANGALORE 575 001.

AND HAVING ITS INDUSTRIAL FINANCE BRANCH, AT RALLARAM MEMORIAL BLDG., 1ST FLOOR, CSI COMPOUND, MISSION ROAD, BANGALURU-560 027.

THE FEDERAL BANK LIMITED A COMPANY WITHIN THE MEANING OF THE COMPANIES ACT,1956,

FEDERAL TOWERS, ALUVA-683 101, KERALA. AND HAVING ITS BRANCH OFFICE AT ST.MARKS ROAD, 9, HALCYON COMPLEX, ST. MARKS ROAD, BANGALORE-560 001.

IDBI BANK LIMITED A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 AND MEANING OF THE BANKING REGULATION ACT,1949 IDBI TOWER, WTC COMPLEX, CUFFE PARADE, MUMBAI-400 005, MAHARASHTRA, INDIA.

AND ACTING THROUGH ITS BRANCH OFFICE AT CORPORATE BANKING GROUP-FAMG 9TH FLOOR, IDBI TOWER, WTC COMPLEX, CUFFE PARADE, COLABA, MUMBAI-400 005.

INDIAN OVERSEAS BANK, UNDERTAKING) ACT, 1970 HAVING ITS CENTRAL OFFICE AT 763, ANNA SALAI, CHENNAI-600 002.

"HARIKRIPA" 26-A, S.V. ROAD, SANTACRUZ (W), MUMBAI-400 054.

10.

PUNJAB & SIND BANK, BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKING) ACT, 1980 HAVING ITS HEAD OFFICE AT 21, RAJENDRA PLACE, NEW DELHI 110 008.

AND HAVING AMONGST OTHERS,

A BRANCH OFFICE AT J.K. SOMANI BUILDING, BRITISH HOTEL LANE, FORT, MUMBAI-400 023.

11.

PUNJAB NATIONAL BANK UNDERTAING) ACT, 1970 (5 OF 1970) 7, BHIKAJI CAMA PALACE, NEW DELHI-110 607. ACTING THROUGH ITS LARGE CORPORATE BRANCH AT CENTENARY BUILDING, 28, M.G. ROAD, BENGALURU-560 001.

12.

STATE BANK OF MYSORE, UNDER THE STATE BANK OF INDIA (SUBSIDIARY BANKS) ACT, 1959, KEMPE GOWDA ROAD, BENGALORE-560 009. [ AND ITS CORPORATE ACCOUNTS BRANCH AT NO.18, RAMANASHREE ARCADE, M.G. ROAD, BANGALORE-560 001.

13.

UCO BANK, UNDER THE BANKING COMPANIES (ACQUISITION & TRANSFER OF UNDERTAKINGS) ACT, 1970 AND HAVING ITS HEAD OFFICE AT 10, BTM SARANI, KOLKATA-700 001, WEST BENGAL, INDIA. 1ST FLOOR,13/22, K.G. ROAD,

14.

UNITED BANK OF INDIA

UNDERTAKING) ACT,1970 (5 OF 1970) 11, HEMANTA BASU SARANI, KOLKATA-700 001. OFFICE AT 40, K.G. ROAD,

…PETITIONERS (BY SRI. VIKRAM A.HUILGOL, SENIOR COUNSEL FOR SRI. VEERENDRA PATIL, ADVOCATE)

AND:

TAX RECOVERY OFFICER, OFFICE OF THE TAX RECOVERY OFFICER RANGE, 18, 4TH FLOOR, NO.59, HMT BHAVAN, BELLARY ROAD, BANGALORE-560 032.

DEPUTY COMISSIONER OF INCOME TAX CIRCLE 16(2), HMT BHAVAN, BELLARY ROAD, BANGALORE-560 032.

ASSISTANT COMMISSIONER OF

INCOME TAX(TDS), HMT BHAVAN, BELLARY ROAD, BANGALORE-560 032.

COMMISSIONER OF INCOME TAX, OFFICE OF THE COMMISSIONER OF INCOME TAX, 4TH FLOOR, HMT BHAVAN, NO.59, BELLARY ROAD, BANGALORE-560 032.

UNION OF INDIA, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA, NEW DELHI-110 001.

KINGFISHER AIRLINES LIMITED, A PUBLIC LIMITED COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 & HAVING ITS REGISTERED OFFICE AT UB TOWER, LEVEL 12, UB CITY, 24, VITTAL MALLYA ROAD, BENGALURU-560 001.

…RESPONDENTS (BY SRI. Y.V.RAVI RAJ, ADVOCATE FOR R1 TO R5; SRI. RAJESH D.M., ADVOCATE FOR R6)

THIS PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO DECLARE THAT THE PETITIONERS HAVE FIRST CHARGE AND PRIORITY OVER THE ASSETS OF RESPONDENT NO.6 SECURED WITH THE PETITIONERS AS AGAINST THE CLAIMS MADE BY RESPONDENT NOs.1 TO 5 AGAINST RESPONDENT NO.6 AND ETC.

THESE PETITIONS COMING ON FOR HEARING, THROUGH PHYSICAL HEARING/VIDEO CONFERENCING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR JUSTICE M.I.ARUN

ORAL ORDER

Learned Senior Counsel Sri.Vikram A.Huilgol appearing for the petitioners submits that the writ petitions may be dismissed as not pressed. He has filed memos dated 15.10.2024 to that effect.

His submission and memos are placed on record.

The writ petitions are dismissed as not pressed.

Sd/- (M.I.ARUN) JUDGE

PGG

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