Encumbrance Certificate

Priority Is Not Purity: Madras High Court Holds a SARFAESI Auction Purchaser Must Clear a Known Excise Attachment Before the Encumbrance Entry Is Removed

A bank sold a mortgaged property under SARFAESI with a Central Excise attachment disclosed as a known encumbrance, then asked the High Court to have the entry struck from the encumbrance certificate. The Division Bench refused: priority over Crown dues is settled, but Rule 9 of the Security Interest (Enforcement) Rules, 2002 is mandatory.