Judgement DEEPAK GUPTA, J. :- This writ petition is directed against the order dated 6-7-2004 passed by the Recovery Officer, Debt Recovery Tribunal, Chandigarh. 2. The undisputed facts are that the assessee respondent No. 4 had obtained a loan from the Indian Bank. In consideration of the grant of loan and to ensure repayment thereof, the assessee had mortgaged his property with the Bank on 18-2-1986. Thereafter, the assessee failed to repay the loan amount to the Bank and the Bank initiated proceedings for recovery of the amount. The matter was decided in favour of the Bank on 13-7-2001 when recovery certificate was issued. The mortgaged property was put to sale and the proceeds of the sale were lying with the Debt Recovery Tribunal. At this stage, the Union of India moved an application on 8-8-1997 praying that an amount of Rs. 506/- lacs was due to it from the assessee on account of arrears of central excise dues and, therefore, the entire sale proceeds of Rs. 81.00 lacs be released to the Union of India. This application has been rejected by the Recovery Officer on the ground that the Bank is also a Central Government Undertaking, and therefore, the debt of the State cannot rank higher than that of the Bank. This order is under challenge before us in the present petition. 3. We have heard Shri Sandeep Sharma, learned Addl. Solicitor General for the petitioner and Mr. C. P. Sood learned counsel for the Indian Bank. 4. The question as to whether the crown tax and debts payable to the State will have precedence over the rights of secured creditors, has been dealt by this Court in two cases. 5. A Division Bench of this Court in CWP No. 556 of 2003 decided on 17-12-2003 considered the judgment of the Apex Court in M/s. Builders Supply Corporation v. Union of India AIR 1965 Supreme Court 1061 and Dena Bank v. Bhikhabhai Prabhudas Pareksh and Co. and others, 2000 (5) Supreme Court Cases 694 : (AIR 2000 SC 3654) and held as follows : "1. There is consensus of judicial opinion that the arrears of tax due to State can claim priority over private debts. 3. and others, 2000 (5) Supreme Court Cases 694 : (AIR 2000 SC 3654) and held as follows : "1. There is consensus of judicial opinion that the arrears of tax due to State can claim priority over private debts. 3. The basic justification for the claim for priority of State debts is the rule of necessity and the wisdom of conceding to the State the right to claim priority in respect of its tax dues. 4. The doctrine may not apply in respect of debts due to the State if they are contracted by citizens in relation to commercial activities which may be undertaken by the State for achieving socio-economic good. In other words, where the welfare State enters into commercial fields which cannot be regarded as an essential and integral part of the basic government functions of the State and seeks to recover debts from its debtors arising out of such commercial activities the applicability of the doctrine of priority shall be open for consideration. 10. However, the Crowns preferential right to recovery of debts over other creditors is confined to ordinary or unsecured creditors. The Common Law of England or the principles of equity and good conscience (as applicable to India) do not accord the Crown a preferential right for recovery of its debts over a mortgage or pledgee of goods or a secured creditor. It is only in cases where the Crowns right and that of the subject meet at one and the same time that the Crown is in general preferred. Where the right of the subject is complete and perfect before that of the King commences, the rule does not apply, for there is no point of time at which the two rights are at conflict, nor can there be a question which of the two ought to prevail in a case where one, that of the subject, has prevailed already...." 6. The Division Bench made certain other observations and finally held that since the bank has already exercised its right and taken decision of the property much prior to the assessment order, therefore, the provisions of Section 35 of the Act would override the inconsistent provisions of section 16-B of the Tax Act. 7. The Division Bench made certain other observations and finally held that since the bank has already exercised its right and taken decision of the property much prior to the assessment order, therefore, the provisions of Section 35 of the Act would override the inconsistent provisions of section 16-B of the Tax Act. 7. Another Division Bench of this Court in Punjab National Bank v. State of H. P. and others 2008 (1) Shim LC 409 also held that the crown debts would not rank higher than the secured debts of a Bank. 8. Keeping in view the aforesaid two decisions as well as the observations made in para 10 of Dena Bank's case (AIR 2000 SC 3654) it is obvious that there is no merit in the case of the petitioner that the debt due to the State should get precedence over the secured debts of the Bank. However, Shri Sandeep Sharma has argued that the aforesaid decisions are not applicable to the present case since in this case, notices had been issued by the excise authorities as far back as 11-3-1988 and the right of the Bank was perfected only on 13-7-2001 when the sale certificate was issued in favour of the Bank. We are not in agreement with this submission. The sale certificate was only a confirmation by a judicial authority of the pre-existing right of the Bank in the said property. The Bank had perfected its right on 18-2-1986 when the mortgage was executed. While taking this view, we are fortified by the provisions of Section 6(4) of the Revenue Recovery Act which governs the recovery of the central excise dues. Section 6 of the Act reads as follows : "6. Property liable to sale under the Act. (1) When the Collector of a district receives a certificate under this Act, he may issue a proclamation prohibiting the transfer of charging of any immovable property belonging to the defaulter in the district. (2) The Collector may at any time, by order in writing, withdraw the proclamation, and it shall be deemed to be withdrawn when either the amount stated in the certificate has been recovered or the property has been sold for the recovery of that amount. (2) The Collector may at any time, by order in writing, withdraw the proclamation, and it shall be deemed to be withdrawn when either the amount stated in the certificate has been recovered or the property has been sold for the recovery of that amount. (3) Any private alienation of the property or of any interest of the defaulter therein, whether by sale, gift, mortgage or otherwise, made after the issue of the proclamation and before the withdrawal thereof, shall be void as against the Government and any person " who may purchase the property at a sale held for the recovery of the amount stated in the certificate. (4) Subject to the foregoing provisions of this section, when proceedings are taken against any immovable property under this Act for the recovery of an amount stated in a certificate, the interest of the defaulter alone therein shall be so proceeded against, and no encumbrances created, grants made or contracts entered into by him in good faith shall be rendered invalid by reason only of proceedings before taken against those interests. (5) A proclamation under this section shall be made by beat of drum or other customary method and by the posting of a copy thereon on a conspicuous place in or near the property to which it relates. 9. A perusal of section 6(4) makes it amply clear that it is only the interest of the defaulter alone which can be proceeded against under Section 6(4). The provision also makes it amply clear that encumbrances created, grants made or contracts entered into by the defaulter in good faith shall not be rendered invalid by reason of proceedings having been taken against the said properties. This clearly indicates the rights of third parties such as the Bank which were created prior to the proceedings being started by the Union of India shall not be affected in these proceedings. Therefore, this is another ground to reject the petition. 10. In view of the above discussion, we find no merit in the writ petition, which is accordingly dismissed. Petition dismissed.