JUDGMENT J.B.PARDIWALA ( 1. ) IN this writ petition under Article 226 of the Constitution, the petitioner, a company incorporated under the Companies Act, 1956 and registered as reconstruction and securitization company with Reserve Bank of INdia under Section 3 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security INterest Act, 2002 ("SARFAESI Act" for short), has prayed for the following reliefs:- "A. Be pleased to issue a writ of declaration that impugned claim, by the first respondent INcome-tax Department, by way of attachment of assets covered by Section 13(2) notice, for priority over the petitioner for realization of income-tax dues, is contrary to law and thus illegal; B. Be pleased to issue a writ of mandamus or any other appropriate writ, order or declaration directing the first respondent, income-tax department to allow the petitioner to exercise its rights under the SARFAESI Act and the rules made thereunder unhampered without any regard for the attachment orders passed by it for realization of income-tax dues of the second respondent company; C. Pending admission and final hearing of the present petition, be pleased to stay the operation and implementation of the impugned attachment of the assets covered by Section 13(2) notice ordered by the first respondent, income-tax department; D. Be pleased to grant such other and further relief/s as may be deemed fit in the in the interest of justice;" ( 2. ) THE facts giving rise to this petition can be summarized as under:- "Petitioner - Asset Reconstruction Company (India) Ltd. (hereinafter referred to as "ARCIL" for short) is a company incorporated under the Companies Act, 1956 and registered as reconstruction and securitization company with Reserve Bank of India under Section 3 of the SARFAESI Act. THE petitioner, in the normal course of business, takes over the debts of the companies from Banks and Financial institutions. In such an event, the Banks that have lend money to the borrowers assign such debts in favour of the petitioner, and the petitioner thereafter steps into the shoes of the lending Banks. THE petitioner, in the normal course of business, takes over the debts of the companies from Banks and Financial institutions. In such an event, the Banks that have lend money to the borrowers assign such debts in favour of the petitioner, and the petitioner thereafter steps into the shoes of the lending Banks. Accordingly, in terms of the provisions of Section 5(4) of the SARFAESI Act, all rights and liabilities of the lending Banks with respect to the debts are assigned to the petitioner through a Trust formed for this purpose." Second respondent is a company incorporated as a Public Limited Company under the Companies Act, 1956 and having its registered office at Ahmedabad. It is now a company in liquidation and its affairs are looked after by the Official Liquidator appointed by this Court. "Second respondent - Mardia Steels Limited availed of financial assistance/loans under agreements by IFCI Limited, Bank of Rajasthan Limited, Axis Bank Limited, Bank of India and J.P Morgan Chase Bank N.A., ICICI Bank Limited, General Insurance Company Limited, LIC of India, Unit Trust of India, New India Assurance Company Limited and Oriental Insurance Company Limited for the purpose and on the terms stated in the agreements. THE said loan together with all underlying security interest and all right, title and interest thereon have been acquired by the petitioner ARCIL as a sole trustee of ARCIL/Mardia Steel Limited Trust-I, ARCIL-Mardia Steel Limited Trust-II, ARCIL-Mardia Steel Limited Trust-III, BIO-SBPS-017-1 Trust and ARCIL-Mardia Steel Limited Trust-IV under Assignment Agreements dated 31.3.2008, 11.7.2008 and 27.9.2008 respectively and in terms of Section 5 of the SARFAESI Act." Second respondent and/or guarantors defaulted in payment of interest and principal instalments of the loans, and thereby have failed and neglected to clear the said over-dues. As a result, the loan amounts have been classified as Non Performing Assets in the Books of Account in accordance with the directives pertaining to asset classification issued by the Reserve Bank of India. "Second respondent is in liquidation. THE second respondent having failed to repay the amount, was served with a notice dated 24.12.2009 under Section 13(2) of the SARFAESI Act. "Second respondent is in liquidation. THE second respondent having failed to repay the amount, was served with a notice dated 24.12.2009 under Section 13(2) of the SARFAESI Act. THEreafter, petitioner, in exercise of powers under Section 13(4) of the SARFAESI Act, read with Rules 8 and 9 of the Security Interest (Enforcement) Rules, 2002, took possession of the secured assets of the borrower company and advertised the possession notice in Economic Times (English edition) and Financial Express (Gujarati edition) on April 10, 2010, thereby informing second respondent and the public in general that the petitioner ARCIL has taken over the possession of the properties described in the notice." At that stage, a major development took place. 1st respondent i.e. Income Tax Department, vide letter dated 8.11.2010, informed the petitioner that the assets of the second respondent company is under attachment of the Income Tax Department. Further, the Department also informed that the outstanding in the case of the company as per the record is to the tune of Rs. 36.33 crores excluding interest, under Section 220, Clause 2 of the Income Tax Act, 1961 for the Assessment Years 1993-94 to 1996-97. It appears that Department also informed that they already filed an affidavit of proof of debt before the Official Liquidator on 16.9.2009, claiming the outstanding dues and the property has been attached by the Income Tax Department. Respondent No.1 asserted that the claim of Income Tax Department on the assets of the assessee company should be exhausted before the sale of assets of the company i.e. respondent No.2. "It is in the background of the above referred facts and development that the petitioner seeks a declaration that it must be allowed to take measures and to exercise its rights under the SARFAESI Act for realizing its dues unhampered by the attachment dated 20th June, 2009 of the Income Tax Department. THE basis of petitioner's claim is that the secured dues have a priority over the dues of the Income Tax Department." We have heard learned counsel Mr. Shalin Mehta, appearing for Mr. Hemang M. Shah for the petitioner ARCIL, learned Senior Counsel Mr. Manish R. Bhatt, appearing with Mrs. Mauna Bhatt for respondent No.1 Income Tax Department, and learned Advocate Mr. R.M. Desai, appearing for the Official Liquidator. ( 3. ) LEARNED counsel for the petitioner put-forward the following contentions. Shalin Mehta, appearing for Mr. Hemang M. Shah for the petitioner ARCIL, learned Senior Counsel Mr. Manish R. Bhatt, appearing with Mrs. Mauna Bhatt for respondent No.1 Income Tax Department, and learned Advocate Mr. R.M. Desai, appearing for the Official Liquidator. ( 3. ) LEARNED counsel for the petitioner put-forward the following contentions. "By virtue of Section 35 of the SARFAESI Act, the provisions of SARFAESI Act would over-ride the provisions of Income Tax Act, 1961. He relied on Section 35 of the SARFAESI Act, which reads as under:- "35. The provisions of this Act to override other laws - The provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law.". He would submit that while taking any measures under Section 13(4) of the SARFAESI Act, the attachment order passed under the Income Tax Act would have to yield because the provisions of the SARFAESI Ac are to have effect notwithstanding anything inconsistent therewith contained in the Income Tax Act or any instrument having effect by virtue of the Income Tax Act.