1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY, BENCH AT AURANGABAD WRIT PETITION NO.3621 of 1997 Maharashtra State Financial Corporation Constituted under the State Financial Corporation Act, 1951 having it's Regional Office at Aurangabad, through it's Authorised Officer and Sr. Regional Manager Shri Upendra Motilal Parekh, Age ; 57 years, Occ. Services R/o Mahavitta Bhavan, Station Road Aurangabad. Petitioner Versus 1] Union of India 2] Commissioner Customs and Central Excise, Aurangabad 3] Additional Commissioner, Customs and Central Excise, Nanded. 4] Superintendent, Customs and Central Excise, Jalna. 5] M/s. Ushai Paper Mills Pvt. Ltd. Company incorporated and registered under the Companies Act, 1956 having their registered office at.... 6] J.R. Kraft Board through P.K. Shethi A-1, Ionic 18, Artharbundur Road, Colaba, Mumbai -5. [ W.P. Dismissed vide order dated 28/6/2004 as against respondent No.6. Respondents 2 Mr. S.P. Deshmukh, Advocate for the petitioner. Mr. Alok Sharma, Assistant Solicitor General for the respondent No.1 CORAM : B.R. GAVAI & S.V. GANGAPURWALA,JJ. DATE : 24TH JUNE, 2010. ORAL JUDGMENT [ PER S.V. GANGAPURWALA,J.] : 1] The petitioner, by filing the present petition, takes exception to the communication issued by the present respondent Nos.2 and 3, thereby claiming an amount from the petitioner in respect of the dues of the respondent No.6. 2] The present petitioner is a secured creditor of the respondent No.6. Immovable properties were mortgaged by the respondent No.6 with the petitioner. Pursuant to the defaults committed by the respondent No.6, the petitioner by invoking its power under Section 29 of the State Financial Corporation Act, sold the said property. 3] The respondent Nos. 2 and 3 contend that respondent No.6 is liable to pay it dues towards excise duty and as petitioner has transferred the property of respondent NO.6, the petitioner is liable to pay the amount to the respondent Nos. 2 and 3, which the respondent No.6 was liable to pay to the respondent Nos. 2 and 3. 4] Shri Deshmukh, learned counsel for the petitioner urged that the dues of the present petitioner were secured debts. The petitioner has a first preference and the debt of the petitioner would 3 have precedence over the debt of the respondent Nos. 2 and 3. 5] Shri Sharma, learned Assistant Solicitor General appearing for the Union of India, claimed that the dues of the Excise Department would come within the concept of Crown Debt and as such, they will also have a precedence over the secured debt. The said argument cannot be accepted. This issue is no more res-integra in view of the dictum of the Apex Court in the matter of “Union of India and others Vs. Sicom Limited and another” reported in (2009)2 SCC 121, holding that the dues of the Excise would not have precedence over the dues of the secured creditor. It also took into consideration Section 46B of the State Financial Corporation Act, 1951 and has held that the dues of the financial institutions incorporated under the State Financial Corporation Act, would have precedence over the dues of the Excise Department. 6] The said judgment was also referred to before the Three Judge Bench of the Apex Court in the matter of “Central Bank of India Vs. State of Kerala” reported in (2009)4 SCC 94, and the said Bench, after considering the said judgment, has held that the debts of the secured creditors will have precedence over the Excise duty. 7] In the light of the above, we allow the petition and make rule absolute in terms of prayer clause (A), with no orders as to costs. [S.V. GANGAPURWALA,J.] [B.R. GAVAI,J.] grt/wp