ICICI BANK LIMITEDversusUNION OF INDIA THROUGH THE SECRETARY MINISTRY OF FINANCE

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        IN THE HIGH COURT OF JUDICATURE AT BOMBAY
            ORDINARY ORIGINAL CIVIL JURISDICTION

                  WRIT PETITION NO. 1544 OF 2026

UV Asset Reconstruction Company Limited …    Petitioner
     Versus
Union of India & Ors.                   …    Respondents
                           WITH
         INTERIM APPLICATION NO. 1827 OF 2026
                            IN
              WRIT PETITION NO. 1544 OF 2026
                           ******
Mr. Amir Arsiwala a/w Ms. Sana Wasim i/by MZM Legal LLP for
Petitioner.
Mr. Abhishek R. Mishra i/by Mr. Ram Ochani for Respondent
Nos.2 and 3.
                           ******
                      CORAM : MANISH PITALE AND
                               SHREERAM V. SHIRSAT, JJ.

                           DATE      : 18th AUGUST 2026

P.C. :

.         Heard learned counsel for the parties.

2.        The petitioner-Asset Reconstruction Company (ARC) is a
secured creditor. It is constrained to approach this Court to seek
appropriate directions against the respondents for taking physical
possession of the subject property, which is the secured asset. The
petitioner-ARC seeks appropriate directions, so that possession of
the subject property can be taken in order to proceed further as
per the provisions of the Securitisation and Reconstruction of
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Financial Assets and Enforcement of Security Interest Act, 2002
(Securitisation Act), for conducting auction sale of the subject
property to satisfy the dues of the petitioner-ARC.

3.        It is brought to our notice that the security interest of the
petitioner-ARC was registered with the Central Registry of
Securitisation Asset Reconstruction and Security Interest of India
(CERSAI) on 16th January 2021. On account of default committed
by the borrower, the loan account was declared a Non-Performing
Asset on 26th May 2022 and the petitioner-ARC proceeded to take
symbolic possession of the subject property under Section 13(4) of
the Securitisation Act on 14th November 2022.

4.        The petitioner-ARC further proceeded to approach the
jurisdictional Magistrate under Section 14 of the Securitisation
Act, for an order to take physical possession of the subject
property. By an order dated 19 th June 2024, the Magistrate
allowed the application and passed an order for physical
possession of the subject property being made over to the
petitioner.

5.        In the interregnum, on 23 rd May 2023, the respondent No.2
i.e. Superintendent of the Office of the Central Goods and
Services Tax (CGST) sealed the subject property, exercising power
under Section 67 of the Central Goods and Services Tax Act, 2017
(CGST Act). The said provision pertains to the power of the
concerned authority of inspection, search and seizure. The said
action of sealing the subject property was undertaken on the basis
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that the extent of liability of the borrower was to be determined
and in that context, the operation of search and seizure was to be
undertaken. It is an admitted position that since 23 rd May 2023,
the subject property is lying in seal and it is control of the
respondent No.2.

6.        The learned counsel appearing for the petitioner-ARC relies
upon Full Bench judgment of this Court in the case of Jalgaon
Janta Sahakari Bank Ltd. & Anr. vs. Joint Commissioner of Sales
Tax & Anr., 2022 SCC OnLine Bom 1767, to contend that the
dues of a secured creditor like the petitioner have priority over the
dues of Central Government, State Government or even local
authority and therefore, the respondent Nos.2 and 3 cannot be
permitted to prevent the petitioner from taking further steps
under the Securitisation Act. Reliance is placed on Section 26-E of
the Securitisation Act, added by way of amendment w.e.f. 24 th
January 2020, to contend that since the petitioner has CERSAI
registration of its security interest and the respondents have not
even determined their dues, much less having the same registered
with CERSAI, the ratio of the Full Bench judgment of this Court
ought to apply with full force and the writ petition ought to be
allowed in terms of the prayers made therein.

7.        The learned counsel appearing for respondents, on the other
hand, relies upon Section 82 of the CGST Act, to contend that the
amounts payable under CGST would have first charge in respect
of the subject property and that therefore, this Court may not
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allow the writ petition. It is submitted that in any case, the
respondents cannot be prevented from exercising power under
Section 67 of the CGST Act, for carrying out the procedure of
inspection, search and seizure. On this ground, it is submitted that
this Court may pass appropriate orders in the matter.

8.        Before we consider the rival submissions, we take note of a
judgment of the Calcutta High Court brought to our notice by the
learned counsel appearing for the petitioner-ARC, in the case of
CFM Asset Reconstruction Pvt. Ltd. vs. Assistant Commissioner,
CGST & C.EX & Ors., 2025 SCC OnLine Cal 10651. In a similar
situation, a learned single Judge of a Calcutta High Court directed
the CGST authority, who was in possession of the subject property,
which was a secured asset, to handover possession directly to the
secured creditor, in order to facilitate appropriate action to be
taken under the provisions of the Securitisation Act. The aforesaid
Court further issued direction to the secured creditor to maintain
an account of the proceeds in pursuance of further action that
would be taken under the Securitisation Act and to share the same
with the CGST authority.

9.        Having considered the rival submissions, it would be
appropriate to first refer to the relevant portion of the judgment
of the Full Bench judgment of this Court in the case of Jalgaon
Janta Sahakari Bank Ltd. & Anr. vs. Joint Commissioner of Sales
Tax & Anr. (supra). In paragraph 85 of the said judgment, the Full
Bench judgment of this Court held as follows :
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          “85. Priority means precedence or going before (Black's Law
          Dictionary). In the present context, it would mean the right to
          enforce a claim in preference to others. In view of the splurge
          of “first charge” used in multiple legislation, Parliament
          advisedly used the word “priority over all other dues” in the
          SARFAESI Act to obviate any confusion as to inter se
          distribution of proceeds received from sale of properties of
          the borrower/dealer. If a secured asset has been disposed of by
          sale by taking recourse to the Security Interest (Enforcement)
          Rules, 2002 it would appear to be reasonable to hold,
          particularly having regard to the non obstante clauses in
          sections 31B and section 26E, that the dues of the secured
          creditor shall have “priority” over all other including all
          revenues, taxes, cesses and other rates payable to the Central
          Government or State Government or local authority.”
10.       Apart from the above quoted paragraph, in various portions
of the Full Bench judgment, the aspect of first charge noted in
various enactments was taken into consideration. After having
considered such provisions, including the provisions of the CGST
Act, the Full Bench categorically held that the security interest
registered with CERSAI of a secured creditor would have priority
over and above all revenues, taxes and cesses payable to the
Central Government or State Government or local authority.

11.       In the face of the authoritative pronouncement of the Full
Bench in the said case, we are unable to agree with the submission
made on behalf of respondents that Section 82 of the CGST Act
would come in the way of the petitioner-ARC (secured creditor) in
asserting its rights over the subject property, which is a secured
asset, for enforcing its security interest in terms of the provisions
of the Securitisation Act. Therefore, the submission made on
behalf of respondents are rejected.
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12.       We are also inclined to issue appropriate directions as
suggested by the learned counsel for the petitioner-ARC on the
same lines as indicated by the Calcutta High Court in the said
judgment of CFM Asset Reconstruction Pvt. Ltd. vs. Assistant
Commissioner, CGST & C.EX & Ors. (supra). We find that since
the respondent No.2 is in possession and it has sealed the subject
property, it would be appropriate that directions are issued to the
respondent No.2 to handover possession of the subject property to
the petitioner within a time bound manner. Appropriate direction
can also be issued to the petitioner for cooperating with the
respondents for them to carry out the exercise of inspection,
search and seizure in the subject property.

13.       At this stage, the learned counsel for the petitioner-ARC, on
instructions, makes a statement that the petitioner would
undertake to cooperate with the respondents for them to carry out
the aforesaid exercise within a time bound manner.

14.       In view of the above, the writ petition is allowed in the
following terms :

   (a) The respondents shall handover possession of the subject
          property to the petitioner-ARC, immediately upon the
          petitioner producing copy of this order before the
          respondent No.2. For the said purpose, the petitioner is
          authorized to break open the lock on the premises and to
          take physical possession of the subject property.
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   (b) The undertaking given by the petitioner to cooperate with
          the respondents for them to carry out the exercise of
          inspection, search and seizure under Section 67 of the CGST
          Act, is recorded as an undertaking given to this Court. It is
          clarified that the respondents shall complete the aforesaid
          exercise within a period of one week of the physical
          possession being taken over by the petitioner-ARC.

   (c) Needless to say, the petitioner-ARC would then be at liberty
          to take further steps in accordance with law, under the
          Securitisation Act.

15.       Pending applications, if any, also stand disposed of.

16.       Parties to act on an authenticated copy of this order.



  (SHREERAM V. SHIRSAT, J.)                      (MANISH PITALE, J.)

                  Digitally signed by
   BIPIN          BIPIN DHARMENDER
   DHARMENDER     PRITHIANI
   PRITHIANI      Date: 2026.08.19
                  10:14:34 +0530