In Brief
A pharmaceutical company (BPIL) mortgaged industrial property to a bank in 2000 to secure a loan. When BPIL defaulted, the bank obtained a recovery order from a debt tribunal in 2002 and proceeded to sell the property at auction in 2004 to the appellant, a bona fide purchaser. However, the Income Tax Department had issued a notice in 2003 and attached the same property. The key question was whether the tax department's attachment could void the bank's sale. The Supreme Court held that since the bank's charge existed before the tax notice was issued, the bank's secured interest takes priority. The sale to the appellant was valid. The Court directed that the property be transferred to the appellant and restrained the tax department from enforcing its attachment.
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