JUDGMENT : R.K. GUPTA, J. (CHAIRPERSON) 1. No one appears for the appellant. On behalf of the respondent, Mr. Sandeep Arora appears. The aforesaid appeal was directed to be listed for final arguments on 27th August, 2012. The said order was passed on 13th July, 2012 and on the said date the Counsel for the appellant Mr. K. Rohan, brief holder of Mr. P. Shankaran was present. The adjournment was accepted subject to the cost of Rs. 25,000/- and thereafter, the date was fixed for final argument on 27th August, 2012, Today, no one is present on behalf of the appellant, therefore, the Counsel for the respondent is heard. 2. The present appeal is preferred by one of the Financial Institutions under Section 18 of the SARFAESI Act, 2002 challenging the order passed by the Tribunal on 25th November, 2011 by which the Securitisation Application preferred by the appellant has been dismissed. 3. The relevant facts for adjudication of the present case are that the appellant being-Financial Institution filed the Securitisation Application under Section 17 of the SARFAESI Act, 2002 challenging the sale proclamation with regard to the property belonging to the respondent No. 2. The challenge was made on the ground that the property was mortgaged by the respondent No. 2 being borrower, therefore, there is a charge of the appellant. 4. There is no dispute in the present case that the respondent No. 1 is also having the charge over the property by way of mortgage and the said mortgage was created on 7th November, 1998. The said mortgage was not registered in terms to Section 125 of the Companies Act, 1956. So far as the mortgage created by the respondent No. 2 being the borrower with regard to the same property was created on 20th March, 2001 in favour of the appellant. The same was registered with the Registrar of the Companies by virtue of Section 125 of the Companies Act, 1956, therefore, it was the claim of the appellant that the mortgage/charge which was created by the respondent No. 2-borrower being a Company and the same is also registered with the Registrar of the Companies, therefore, there would be the first charge of the appellant. Since the charge of respondent No. 1-Bank which was even though created by mortgage on 7th November, 1998 was not registered by virtue of Section 125 of the Companies Act, 1956, therefore, the appellant will have the first charge over the property and not the respondent No. 1-Bank. 5. The Tribunal did not accept the contention of the present appellant on the ground that there had already been the Recovery Certificate issued in favour of the respondent No. 1 -Bank while adjudicating upon the Original Application preferred by the respondent No. 1-Bank, which was registered as Original Application No. 71/2000 decided on 9th September, 2002, therefore on the basis of the same, there would be the first charge of the respondent No. 1-Bank and thus, no merit was found in the Securitisation Application so preferred by the appellant. As a consequence of the same, the Securitisation Application was rejected and against the same the present appeal has been preferred. 6. This is to be seen that Section 125 of the Companies Act, 1956 provides for certain charges to be void against liquidator or creditor unless registered. According to Sub-section (4) of Section 125, it also applies to the charges in relation to the charge on immovable property, wherever situated, or any interest therein. 7. There is no dispute in the present case that the property is an immovable property which was mortgaged with respondent No. 1 and as a consequence of the mortgage, a charge was created on such property without getting the same registered with the Registrar of the Companies and according to the Section 125 of the Companies Act, 1956, such charge would be void. 8. The ground in the appeal which has been raised is that by virtue of Section 125 of the Companies Act, 1956, if the charge itself is void in the absence of its registration, then such a charge can be enforced or the charge which was validly created in accordance with the Section 125 of the Companies Act, 1956 which is in favour of the appellant can be enforced. The appellant would have every right to enforce such charge. No first charge under the circumstances can be created in favour of the respondent No. 1-Bank. 9. The appellant would have every right to enforce such charge. No first charge under the circumstances can be created in favour of the respondent No. 1-Bank. 9. During the course of the argument, the learned Counsel for the respondent submits that by virtue of Section 134 of the Companies Act, 1956, there is duty of the Company as regards registration and right of interested party for registration of the charge is also created. By virtue of Section 134 of the Companies Act, 1956, at first instance is got to be registered by the Company and simultaneously such a right of registration has also been vested to the interested party. 10. Admittedly, in the present case the company had not submitted the charge for its registration to the Registrar of the Companies. Simultaneously, the respondent No. 1 -Bank was also an interested party, but they have also not exercised their right as per Section 134 of the Companies Act, 1956 for getting the charge registered i.e. mortgage which was created by the Company in favour of the respondent No. 1-Bank by executing the mortgage deed on 7th November, 1998. 11. It was contended that once the security interest was created by the respondent No. 2-borrower in favour of the respondent No. 1 at first point in time by creating a security interest in favour of the respondent No. 1, therefore, the appellant will not have the first charge over the property and respondent No. 1-Bank will have right to enforce its security being prior in time. It was contended that the borrower has committed fraud and it being fraudulent transaction will not be enforceable because the respondent No. 2-borrower has fraudulently created the charge in favour of the appellant without seeking any leave from the respondent No. 1-Bank. 12. The Tribunal in the present case has surprisingly decided the case without getting any reference to the provisions of Section 125 of the Companies Act, 1956, though in second paragraph of the judgment the Tribunal has mentioned that submission made on behalf of the appellant that the charge being void in the light of Section 125 of the Companies Act, 1956 cannot be enforced. 13. For the purpose of adjudicating the present appeal, it would be appropriate to refer herein-below the provisions so contained under Section 125 of the Companies Act, 1956, which reads as under: 125. 13. For the purpose of adjudicating the present appeal, it would be appropriate to refer herein-below the provisions so contained under Section 125 of the Companies Act, 1956, which reads as under: 125. Certain charges to be void against liquidator or creditors unless registered.--(1) Subject to the provisions of this part, every charge created on or after the 1st day of April, 1914, by a company and being a charge to which this section applies shall, so far as any security on the company's property or undertaking is conferred thereby be void against the liquidator and any creditor of the company, unless the prescribed particulars of the charge, together with the instrument, if any, by which the charge is created or evidenced, or a copy thereof verified in the prescribed manner, are filed with the Registrar for registration in the manner required by this Act within [thirty] days after the date of its creation: [Provided that the Registrar may allow the particulars and instrument or copy as aforesaid to be filed within thirty days next following the expiry of the said period of thirty days on payment of such additional fee not exceeding ten times the amount of fee specified in Schedule X as the Registrar may determine, if the Company satisfies the Registrar that it had sufficient cause for not filing the particulars, and instrument or copy within that period.] (2) Nothing in Sub-section (1) shall prejudice any contract or obligation for the repayment of the money secured by the charge. (3) When a charge becomes void under this section, the money secured thereby shall immediately become payable. (4) This section applies to the following charges- (a) a charge for the purpose of securing any issue of debentures; (b) a charge on uncalled share capital of the Company; (c) a change on any immovable property, wherever situated, or any interest therein; (d) a charge on any book debts of the company; (e) a charge, not being a pledge, on any movable property of the Company; (f) a floating charge on the undertaking or any property of the company including stock-in-trade; (g) a charge on calls made but not paid; (h) a charge on a ship or any share in a ship; (i) a charge on goodwill, on a patent or a licence under patent, on a trade mark, or on a copyright on a licence under a copyright. 14. 14. As it is evident from the reading of Sub-section (1) of Section 125 itself that it provides subject to the provisions of this Part, every charge created on or after the 1st April, 1914, by a Company and being a charge to which Section 125 applies shall, so far as any security on the Company's property or undertaking is conferred thereby, be void against the liquidator and any creditor of the Company, unless the prescribed particulars of the charge, together with the instrument, if any, by which the charge is created or filed with the Registrar of the Companies in the manner required under the Act within thirty days from the date of the creation of the charge. 15. It is clear by virtue of Section 134 of the Companies Act, 1956, the same has to be sent by the Company, who has created the charge in favour of the secured creditor, but the fact remains that the charge was never registered with the Registrar of the Companies. Section 134 of the Companies Act, 1956 further enables the party interested to get such charge registered. Thus by virtue of Section 134, the obligation and right for getting such charge registered is available to both i.e. borrower and the party interested. In the present case, neither the borrower-Company nor even respondent No. 1-Bank being the party interested have ever applied by exercising their rights as contemplated under Section 134 of the Companies Act, 1956 for getting the charge registered with the Registrar of the Companies. 16. Though the charge, which was created in favour of the appellant by the respondent No. 2-Company, was created on 20th March, 2001 when the mortgage deed was executed and such a charge was also registered with the Registrar of the Companies, therefore, in view of the aforesaid, the question arises for consideration, whether the charge not registered by virtue of Section 125 of the Companies Act, 1956 would get the priority over the charge registered in favour of the appellant? 17. The question has to be adjudicated upon with reference to special provisions as contemplated under the Companies Act, 1956. There is no dispute that the provisions as contained under the Companies Act, 1956 are the special provisions in relation to the affairs of Company and the provisions as contained in the Transfer of Property Act, 1882 are the general in nature. There is no dispute that the provisions as contained under the Companies Act, 1956 are the special provisions in relation to the affairs of Company and the provisions as contained in the Transfer of Property Act, 1882 are the general in nature. Though by virtue of Section 48 of the Transfer of Property Act, 1882 the priority of rights created by transfer is regulated and according to this, the first charge created in first point of time will have the priority over the second charge created after the first charge without discharging the first charge. 18. If the Section 125 of the Companies Act, 1956 itself declares the certain charges to be void then Section 125 shall not be in derogative to the provision as contained in the Transfer of Property Act, 1882. If the Companies Act, 1956 provides certain transaction by way of transfer or transaction created for the purpose of creating the mortgage to be void against the liquidator and creditor, then the same has to prevail over the provisions of the Transfer of the Property Act, 1882. Once the transaction itself has been declared to be void by virtue of Section 125 of the Companies Act, 1956 against the liquidator and creditor, then such void transaction will not claim the priority over the valid transaction by which valid charge has been created by the Company in favour of the creditor. 19. Under these circumstances, if the charge has validly been created in favour of the appellant by complying with the provisions of the Companies Act, 1956, then such valid transaction with regard to creation of the charge through instrument, by way of mortgage will have right to enforce the security, as it has the legal/statutory sanction of Section 125 of the Companies Act, 1956 and the charge which is void and does not have the legal or statutory sanction of Section 125 read with Section 134 of the Companies Act, 1956 will not have the effect of by-passing a valid transaction which is not valid by virtue of Section 125 of the Companies Act, 1956. 20. 20. This is also to be seen that the provisions as contained under the SARFAESI Act, 2002 though requires registration of charge through Central Registry by virtue of Section 23 of the SARFAESI Act, 2002, but on the date when both the mortgages were created i.e. in favour of the appellant on 20th March, 2001 and in favour of the respondent No. 1 Bank on 7th November, 1998 the SARFAESI Act, 2002 was not even in existence. What existed on the date, Section 125 of the Companies Act, 1956 and there should have been registration of the charge which was created in favour of the respondent No. 1 on 7th November, 1998 and in the absence of registration as such, the Legislature under Section 125 of the Companies Act, 1956 itself declares unregistered charges to be void against the liquidator or creditor, therefore, such void charge will not get the priority over the validly created charge already existing in favour of the appellant. In this reference, Sub-section (2) of Section 125 of the Companies Act, 1956 is also referable which provides that nothing in Sub-section (1) shall prejudice any contract or obligation for the repayment of the money secured by the charge. Thus, by virtue of Sub-section (2), even though the charge being void it will not have the effect of being a transaction to be totally void, but by virtue of Sub-section (2) of Section 125 of the Companies Act, 1956 right of creditor in whose favour the charge is created and such charge is not registered, will have still right for its repayment of money secured by charge. 21. Now the question remains by virtue of Sub-section (2). It is not that there would be no liability of the Company to repay the money to the creditor with regard to the mortgage not registered by virtue of Section 125 of the Companies Act, 1956, but the right to recover the amount by way of repayment is protected by the statute. 22. It is not that there would be no liability of the Company to repay the money to the creditor with regard to the mortgage not registered by virtue of Section 125 of the Companies Act, 1956, but the right to recover the amount by way of repayment is protected by the statute. 22. In view of the aforesaid, the question is of enforceability of rights on priority basis between two Financial Institutions i.e. on one hand the appellant being a Financial Institution and the Bank being also a Financial Institution, but in the absence of the registration of the charge, the charge was created by the Company in favour of the respondent No. 1-Bank on 7th November, 1998, and in favour of the appellant charge was created by way of mortgage on 20th March, 2001 and the charge being in favour of the appellant since is registered, therefore, such registration will give the priority to the present appellant to recover its money through security as there is a legal sanction in favour of the appellant by virtue of Section 125 of the Companies Act, 1956 and such charge would be enforceable against any charge invalidly created or declared void in pursuance to Section 125 of the Companies Act, 1956. 23. The next submission of the learned Counsel for the respondent is that in the present case when the respondent-Bank filed the Original Application before the Tribunal against the respondent No. 2 for the recovery of its debt, then the appellant intervened and the application for intervention was rejected and on this basis, it is submitted that the appellant now cannot be permitted to take the advantage to prove its plea that it has the valid charge on the property. In this reference, this is to be seen that the appellant was not the party before the Tribunal. The status of the appellant was only an intervenor and the intervenor cannot be equated with the party [Please see 1974 M.P.L.J. Short Note 106--Jhabua Municipal Corporation v. State of M.P.]. In this reference, this is to be seen that the appellant was not the party before the Tribunal. The status of the appellant was only an intervenor and the intervenor cannot be equated with the party [Please see 1974 M.P.L.J. Short Note 106--Jhabua Municipal Corporation v. State of M.P.]. When it was known to the respondent No. 1-Bank that there is a charge on the property which was also registered which was not void in terms to the Section 125 of the Companies Act, 1956, then it would have been appropriate for the respondent No. 1-Bank to have impleaded the appellant as one of the respondents for enforcing the right over the appellant, but such a recourse was not adopted. 24. Apart from the aforesaid, there is no issue before the Tribunal below, as to who has the first charge and the second charge whether the appellant or the respondent-Bank. Under these circumstances, merely because the Recovery Certificate in favour of the respondent No. 1-Bank was passed by the Tribunal, that will not have effect of holding that in terms to the Recovery Certificate, the respondent No. 1-Bank will have the first charge. In view of my aforesaid discussions, I am inclined to allow the present appeal and the order passed by the Tribunal is set aside and the appellant will have the first charge to enforce its security for recovery of its amount for the aforesaid reason.