NJSJ & TCDS, J WP_34349_2025 1 APHC010662612025 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI WRIT PETITION NO: 34349 of 2025 Bench Sr.No:- 18 [3543] M/s. Can Fin Homes Limited ...Petitioner Vs. The State Of Ap and Others ...Respondent(s) ********** CORAM : SRI JUSTICE NINALA JAYASURYA SRI JUSTICE T.C.D.SEKHAR DATE : 22th July 2026 Present : Advocate for Petitioner: KADIMISETTY SAI SREENADH Advocate(s) for Respondent(s): GP FOR REVENUE, GP FOR COMMERCIAL TAX NJSJ & TCDS, J WP_34349_2025 2 HON’BLE SRI JUSTICE NINALA JAYASURYA AND HON’BLE SRI JUSTICE T.C.D. SEKHAR WP No.34349 OF 2025 ORDER:- (Per Hon’ble Sri Justice T.C.D. Sekhar) 1. The petitioner is a company registered under the Companies Act, functioning under the Regulatory Supervision of the National Housing Bank. The petitioner is engaged in providing housing loans and related financial services, having operation of its branch network across the state of Andhra Pradesh. 2. The respondent Nos.5 & 6 approached the petitioner seeking financial assistance, so as to purchase residential flat vide Flat No.202, Seedhi Vinayaka Residency, Gandhibomma Center, Vidhyadharapuram, Vijayawada. Accordingly, the petitioner sanctioned housing loan of Rs.20,00,000/- in favour of the respondent No.5 & 6. In furtherance thereto, the respondent Nos.5 & 6 executed a registered equitable mortgage in favour of the petitioner through document No.1723/2020, dt.27.02.2020 by deposit of title deeds. 3. It is further case of the petitioner that the 3rd respondent by proceedings dt.21.05.2025 called upon the NJSJ & TCDS, J WP_34349_2025 3 petitioner to furnish the details of the borrower’s loan accounts in the process of recovering the tax dues against M/s. Shirdi Sai Enterprises. To which, the petitioner replied to the 3rd respondent stating that the property under dispute was mortgaged in its favour and no amount was payable by the petitioner to the respondent Nos.5 & 6. Subsequently, the 4th respondent issued notice of attachment and sale of immovable property in Form GST DRC-16, dt.12.11.2025 by exercising power under Section 79 of GST Act. Questioning the said notice, the present writ petition is filed, on the ground that as per Section 26 (E) of the SARFAESI Act, the petitioner has got priority over all other debts including revenues, taxes and cesses payable to the Central Government, State Government or local authority. The counsel for the petitioner Smt.V.Dyumani would submit that in view of Section 26(E) of SARFAESI Act the petitioner has got priority over all other dues that are recoverable including the State Government or Central Government. In support of her contention she places reliance on judgment dated 08.12.2020 NJSJ & TCDS, J WP_34349_2025 4 rendered by coordinate bench of this Court in WP No.23312 of 20201, wherein it was held as under:- “10. A reading of the above provisions of law makes it abundantly clear that the said provisions are analogous though under two different legislations. Section 26E of the Act, which came into force w.e.f 24-01 - 2020 begins with 'non obstante' clause and stipulates that after registration of the security interest, the debts due to any secured creditor shall be paid in priority over all other debts and all revenues, taxes, cesses and other rates payable to the Central or State Governments or local authority. Section.31B of the Bankruptcy Act is also to the same effect. When the language of the provisions of law is very lucid and clear, no other interpretation is possible. 11. In the instant case, the 3rd respondent created mortgage over the subject property by way of a registered deed in favour of Andhra Bank as long back as on 16-03-2013 and as the account of the loanee became NPA on 31-07-2016, the Bank authorities initiated action under the provisions of the Act by issuing notices under Section 13(2) and (4) of the Act. It is absolutely not in controversy that the petitioner herein clearly falls under the definition of "secured creditor" as defined under Section 2(zd) of the Act, since the petitioner herein is an Asset Reconstruction Company in whose favour Andhra Bank assigned the debt by way of registered document on 26-09-2017. In fact, the material available on record further reveals that on 18-11-2020 i.e., immediately after the sale notice came to be issued by the 2nd respondent, the petitioner herein brought to the notice of the Office of the 2nd respondent about the existence of the security interest in favour of the petitioner herein. In fact, when the provisions of Section 26E of the Act and 31B of the Bankruptcy Act fell for consideration of this court in W.P.No.43841 of 2018, when the registering authority failed to register the sale certificate, a Division Bench of this court, while holding that the secured creditor would have the priority of the charge over the mortgaged property, allowed the said writ petition directing the registering authority to register the sale certificate. In the said judgment, the Division Bench also held that the revenue has no priority of charge over the mortgaged property in question. Having regard to the language employed in Section 26E of the Act and 31B of the Bankruptcy Act, the contention of the learned Government Pleader that mortgage in favour of the petitioner herein should yield to crown debt coupled with charge cannot be sustained in the eye of law. 12. Submission of the learned Government Pleader that since the petitioner-institution did not take any steps pursuant to the assignment of debt in its favour, it is liable to be non-suited, is also not tenable having regard to the above said provision of law. With regard to the contention of the learned Government Pleader on the prospective application of the provisions of Section 26E of the Act and Section 31B of the Bankruptcy Act, it is to be noted that the said provisions do not make any distinction to the said effect. Accordingly, the said contention is also rejected." 5. Further, following the ratio laid down in the said judgment, another coordinate bench of this Court in the case of 1 AIR2021 AP 52 NJSJ & TCDS, J WP_34349_2025 5 “State Bank of India Vs. Deputy Commercial Tax Officer-II, Dwaraka Nagar Circle, Visakhapatnam Division and others2” had reiterated that the secured creditor will have the priority as per Section 26(E) of SARFAESI Act over the dues that are recoverable by the State Government or the Central Government as the case may be. 6. As the issue involved in the case on hand, is no more res- integra, the notice of attachment and sale of immovable property in Form GST DRC-16, dt.12.11.2025 is liable to be set aside. 7. During the course of hearing, the Government Pleader for Commercial Taxes, while not disputing the legal position, would submit that, if any balance of sale consideration amount is available after the loan of the petitioner with interest and other charges as specified, the same shall be made available to the Commercial Tax Department. Considering, the submission of the Government Pleader, it is directed that if any amount is available after exhausting the dues of the petitioner as mentioned 2 AIR 2021 AP87 NJSJ & TCDS, J WP_34349_2025 6 above, the remaining amount shall be made available to the respondent Nos.1 to 4 authorities. 8. Accordingly, the writ petition is allowed and the impugned notice of attachment and sale of immovable property Form GST DRC-16, dt.12.11.2025 in respect of property in dispute is set aside. There shall be no order as to costs. As a sequel, pending applications, if any shall stand closed. ___________________________ JUSTICE NINALA JAYASURYA ______________________ JUSTICE T.C.D. SEKHAR 22.07.2026 DR NJSJ & TCDS, J WP_34349_2025 7 63 HON’BLE SRI JUSTICE NINALA JAYASURYA AND THE HONOURABLE SRI JUSTICE T.C.D. SEKHAR WP No.34349 of 2025 Date 22.07.2026 U DR