SARFAESI and RDB Act Prevail Over TN General Sales Tax Act in Public Interest: Madras HC Grants...

The Madras High Court has granted relief to Indian Bank, ruling that the provisions of the SARFAESI Act and the Recovery of Debts and Bankruptcy (RDB) Act prevail over the Tamil Nadu General Sales Tax (TNGST) Act. The case involved a property that was mortgaged to the bank, on which the state sales tax department had also claimed a first charge for the recovery of tax dues. The High Court held that the SARFAESI and RDB Acts, being central legislations specifically enacted for the recovery of debts for banks and financial institutions, have an overriding effect over the state's tax recovery laws. This means that the bank's right to recover its dues by selling the mortgaged property takes precedence over the state's claim for tax arrears. This judgment is crucial for the banking sector as it secures their interests as secured creditors.