In Brief
Rajasthan Financial Corporation financed Sabhyata Plastics Pvt Ltd, and after default, sold the hypothecated property to a third party under Section 29 of the State Financial Corporation Act, 1951, reserving a first charge. The Central Excise department subsequently attached the property for alleged dues of the original borrower. The Supreme Court upheld the High Court's dismissal of the writ petition, holding that the Corporation's claim to enforce its first charge was premature. The charge can only be enforced if and when the property is sold to recover the Central Excise dues. Until then, the proper party aggrieved is the property purchaser, not the Corporation.
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