JUDGMENT R. Banumathi, C.J. Bihar State Financial Corporation has filed the writ petition to quash the impugned notification being S.O. 95 dated 01.09.2004 issued by the State of Jharkhand as void and illegal. 2. The State of Jharkhand, which came into existence with effect from 15.11.2000, issued Notification No.17 dated 15.12.2000 in exercise of powers contained in Section 85 of the Bihar Reorganisation Act, 2000, inter alia, adopting the Bihar Finance Act, 1981 Part I and the Rules framed thereunder to be applicable to the entire State of Jharkhand. By exercising its powers under Section 29 of the Adopted Bihar Finance Act, 1981, the State of Jharkhand issued the impugned notification. As per the notification, the State Financial Corporation shall ensure that no industrial unit be sold without obtaining ‘No Objection Certificate’ from the Department of Commercial Taxes, Jharkhand. The impugned notification reads as under:- Department of Commercial Tax Notification 27th August, 2004 S.O.-95 dated 1st September, 2004/2384 – Government of Jharkhand in exercise of powers as conferred by Section 29 of adopted Bihar Finance Act, 1981, makes following provisions for ensuring recovery of the Government dues, deeming it as first charge, upon sale/auction of closed/old Industrial Units in the State. 1. State Financial Corporation shall ensure that no Industrial Unit be sold without obtaining No objection Certificate from Department of Commercial Tax, Jharkhand, Ranchi. 2. State Financial Corporation, after deducting dues amount of Sales Tax from the proceeds of sale, shall send it to the Department of Commercial Tax, Jharkhand, Ranchi. Sale Tax/Misc./7/2002 By the order of the Governor of Jharkhand Alka Tiwari Secretary-cum-Commissioner Department of Commercial Tax, Jharkhand, Ranchi. 3. The petitioner is a statutory Corporation, established in terms of Section 3 of the State Financial Corporation Act, 1951. The Corporation had extended financial loan facilities to various units, which, now fall within the State of Jharkhand. The case of the petitioner is that as per Section 29(4) of the State Financial Corporation Act, the manner of priority of appropriation of sale proceeds of the mortgaged/hypothecated assets has been clearly laid down and the same cannot be altered by the impugned notification of the State of Jharkhand depriving the petitioner-Corporation of its legitimate dues in a legitimate manner. 4. 4. According to the petitioner, if it is to be held that the statutory first charge created by Section 29 of the Bihar Finance Act has to prevail, then there would be a direct conflict between the provisions of Section 29(4) of the State Financial Corporation Act, which lays down the priority of appropriation and Section 29 of the Bihar Finance Act and by virtue of Section 46-B of the State Financial Corporation Act, the provisions of the State Financial Corporation Act shall prevail. Further case of the petitioner is that under the provisions of the Bihar Finance Act, there are specific provisions for collection and recovery of tax and State Government has authority to take such steps as thereunder as are permissible to do, and to direct the Financial Corporation to first pay the dues of sales tax from recovered sale proceeds is not only arbitrary but discriminatory. According to the petitioner, the provisions for obtaining ‘No Objection Certificate’ from Department of Commercial Tax is unreasonable and arbitrary and no guidelines are provided as to when and under what conditions, ‘No Objection Certificate’ can be withheld, nor there is any time frame for grant or refusal thereof provided. According to the petitioner, in view of Section 46-B of the State Financial Corporation Act, which contains non-obstante clause, provisions of the State Financial Corporation Act shall have the effect, notwithstanding anything inconsistent contained in any other law for the time being in force and while so, the impugned notification issued is arbitrary and liable to be quashed. 5. Refuting the contentions of the petitioner, respondent has filed counter affidavit contending that under Section 29 of the adopted Bihar Finance Act, 1981 notwithstanding anything to the contrary contained in any law for the time being in force, any amount of tax and penalty, if any, payable by a dealer shall be a first charge on the property of the dealer or such persons. According to the respondents, in view of the non-obstante clause in Section 29 of the Adopted Bihar Finance Act, 1981, the State of Jharkhand has every right to issue such notification in the territory of the State and Section 46-B of the State Financial Corporation Act does not restrict the State Government from issuing befitting notification under Section 29 of the adopted Bihar Finance Act, 1981. 6. 6. The learned senior counsel appearing for the writ petitioner contended that Section 29(4) of the State Financial Corporation Act clearly indicate that money received by the Corporation shall be adjusted against (i) all costs, charges and expenses, which in the opinion of the Financial Corporation have been primarily incurred by it; (ii) thereafter the money received shall be paid for the discharge of the debts due to the Financial Corporation and only the residuary amount shall be paid to the person entitled thereto. 7. The learned senior counsel submitted that as per Section 29(4) of the State Financial Corporation Act, the sale proceeds realized by the Corporation has to be distributed in the mode and the manner mentioned in the sub section and it is for the Corporation to take a decision whether to sell the assets of a defaulting unit or not. It was submitted that the State Financial Corporation Act confers the right on the Corporation to take such an action and transfer the property as if the Corporation was the owner and Section 29(4) provides as to how the sale proceeds on such a sale is to be appropriated, giving first right of appropriation to the Corporation over all other rights and the said right of Bihar State Financial Corporation cannot be taken away and the notification issued is wholly without jurisdiction. 8. The learned senior counsel for the petitioner Corporation further submitted that Section 46-B of the State Financial Corporation Act clearly indicates that the provisions of the Act as well as any rules/orders made under the State Financial Corporation Act shall have the effect, notwithstanding anything contained in any other law for the time being in force and in this view of the matter also the provisions of the State Financial Corporation Act shall prevail and the same cannot be altered by an executive notification of the State Government as contained in impugned Annexure 1. On behalf of the petitioner, reliance is placed on the decision of the Supreme Court reported in (2009) 2 SCC 121 [Union of India versus SICOM Ltd.] to contend that the preferential claim of the Financial Corporation in relation to its secured debts is not liable to be interfered with. 9. On behalf of the petitioner, reliance is placed on the decision of the Supreme Court reported in (2009) 2 SCC 121 [Union of India versus SICOM Ltd.] to contend that the preferential claim of the Financial Corporation in relation to its secured debts is not liable to be interfered with. 9. Placing reliance upon the decision of the Supreme Court reported in (2009) 4 SCC 94 [Central Bank of India versus State of Kerala], the learned counsel for the respondents submitted that the State of Jharkhand has every right to issue the impugned notification in its jurisdiction as the Bihar State Financial Corporation is not created by the Central Act, rather, it is created by the State Government under the Central Act. The learned counsel submitted that Section 29 is a non-obstante provision and Section 29 mandates that the amount of taxes over the property would be first charge and Bihar State Financial Corporation is no exception to this. Learned counsel submitted that all these aspects have been dealt with by the Hon’ble Supreme Court in the judgment rendered in (1995) 2 SCC 19 [State Bank of Bikaner and Jaipur versus National Iron and Steel Rolling Corporation] and (2009) 4 SCC 94 [Central Bank of India versus State of Kerala] and submitted that the first priority of the State Government in respect of any amount of tax and penalty is no longer res-integra. 10. In exercise of powers conferred under Section 29 of the Adopted Bihar Finance Act, 1981, the State of Jharkhand issued Notification S.O. 95 dated 01.09.2004. As per the impugned notification the State Financial Corporation shall ensure that no industrial unit be sold without obtaining ‘No Objection Certificate’ from the Department of Commercial Taxes, Jharkhand, Ranchi. The Notification further directed the State Financial Corporation that after deducting the sales tax amount due from the proceeds of the sale, the sales tax be sent to the Department of Commercial Taxes, Jharkhand. The question falling for consideration is whether the impugned notification issued by the State of Jharkhand in exercise of its powers conferred by Section 29 of the Adopted Bihar Finance Act, 1981 is without jurisdiction and ultra vires the provisions of the State Financial Corporation Act. 11. The question falling for consideration is whether the impugned notification issued by the State of Jharkhand in exercise of its powers conferred by Section 29 of the Adopted Bihar Finance Act, 1981 is without jurisdiction and ultra vires the provisions of the State Financial Corporation Act. 11. We shall now consider whether there is a conflict between the State Financial Corporation Act on one hand and Section 29 of the Bihar Finance Act and whether by virtue of non-obstante clause in Section 46-B of the State Financial Corporation Act, the provisions contained in the State Financial Corporation Act would override the provisions contained in Section 29 of the Bihar Finance Act, 1981. For reference, we shall refer to Section 29(4) and Section 46-B of the State Financial Corporation Act. Section 29(4) of the State Financial Corporation Act reads as under:- 29. Rights of Financial Corporation in case of default.- (4) Where any action has been taken against an industrial concern under the provisions of sub-section (1), all costs, charges and expenses which in the opinion of the Financial Corporation have been properly incurred by it as incidental thereto shall be recoverable from the industrial concern and the money which is received by it shall, in the absence of any contract to the contrary, be held by it in trust to be applied firstly, in payment of such costs, charges and expenses and, secondly, in discharge of the debt due to the Financial Corporation, and the residue of the money so received shall be paid to the person entitled thereto.” Section 46-B of the State Financial Corporation Act, which is a non obstante provision, reads as under:- 46-B. Effect of Act on other laws.- The provision of this Act and of any rule or orders made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in the memorandum or articles of association of an industrial concern or in any other instrument having effect by virtue of any law other than this Act, but save as aforesaid, the provisions of this Act shall be in addition to, and not in derogation of, any other law for the time being applicable to an industrial concern.” 12. Section 29 of the Bihar Finance Act contains non obstante clause and stipulates that the sales tax payable shall be the first charge. Section 29 of the Bihar Finance Act contains non obstante clause and stipulates that the sales tax payable shall be the first charge. Section 29 of the Bihar Finance Act, 1981 reads as under:- 29. Tax to be first charge on property.- Notwithstanding anything to the contrary contained in any law for the time being in force any amount of tax and penalty, if any, payable by a dealer or any other person under this part shall be a first charge on the property of the dealer or such person.” 13. By exercising its power under Section 29 of the adopted Bihar Finance Act, 1981, the State of Jharkhand issued the impugned notification directing that the State Financial Corporation shall ensure that no industrial unit be sold without obtaining ‘No Objection Certificate’ from the Department of Commercial Taxes, Ranchi and further directing that the State Financial Corporation, after deducting the amount of sales tax from the proceeds of sale, shall send the deducted amount to the Department of Commercial Taxes, Jharkhand. 14. The non-obstante clause is appended to a provision with a view to give the enacting part of the provision an overriding effect in case of a conflict. Considering the same question, whether there is any conflict between Section 34(1) of the Debts Recovery Tribunal Act and Section 35 of the Securitisation Act on the one hand and the provisions contained in Section 38(c) of the Bombay Sales Tax Act and Section 26-B of the Kerala Sales Tax Act and similar State Legislations, elaborating upon the interpretation of a ‘non-obstante clause’ in the decision reported in (2009) 4 SCC 94 [Central Bank of India versus State of Kerala] at paragraphs 103 and 116, the Hon’ble Supreme Court has held as under:- 103. A non obstante clause is generally incorporated in a statute to give overriding effect to a particular section or the statute as a whole. While interpreting non obstante clause, the court is required to find out the extent to which the legislature intended to do so and the context in which the non obstante clause is used. This rule of interpretation has been applied in several decisions. … … … … … … 116. While interpreting non obstante clause, the court is required to find out the extent to which the legislature intended to do so and the context in which the non obstante clause is used. This rule of interpretation has been applied in several decisions. … … … … … … 116. The non obstante clauses contained in Section 34(1) of the DRT Act and Section 35 of the Securitisation Act give overriding effect to the provisions of those Acts only if there is anything inconsistent contained in any other law or instrument having effect by virtue of any other law. In other words, if there is no provision in the other enactments which are inconsistent with the DRT Act or the Securitisation Act, the provisions contained in those Acts cannot override other legislations. Section 38-C of the Bombay Act and Section 26-B of the Kerala Act also contain non obstante clauses and give statutory recognition to the priority of the State’s charge over other debts, which was recognized by Indian High Courts even before 1950. In other words, these sections and similar provisions contained in other State legislations not only create first charge on the property of the dealer or any other person liable to pay sales tax, etc. but also give them overriding effect over other laws. 15. The above ratio laid down in Central Bank Case (supra) is applicable to the case in hand. There is no provision in Bihar Financial Act, which is inconsistent with the State Financial Corporation Act, the provisions contained in those Act cannot override other legislations. Section 29 of the adopted Bihar Finance Act, 1981 contains non obstante clause and gives statutory recognition to the first priority of the State’s charge in respect of any amount of tax and penalty. State’s first charge in respect of any amount of tax and penalty is recognized by the Hon’ble Supreme Court over other debts as held in State Bank of Bikaner & Jaipur versus National Iron and Steel Rolling Corporation (1995) 2 SCC 19 and (2009) 4 SCC 94 (supra). 16. In (1995) 2 SCC 19 [State Bank of Bikaner & Jaipur Case], the Hon’ble Supreme Court considered the effect of Section 11-AAAA of the Rajasthan Sales Tax Act, 1954 by which first charge was created on the property of dealer, inter alia, of the amount of tax, penalty etc. 16. In (1995) 2 SCC 19 [State Bank of Bikaner & Jaipur Case], the Hon’ble Supreme Court considered the effect of Section 11-AAAA of the Rajasthan Sales Tax Act, 1954 by which first charge was created on the property of dealer, inter alia, of the amount of tax, penalty etc. on an existing mortgage on the property of the dealer. After noticing that Section 11-AAAA of the Rajasthan Sales Tax Act, which is pari materia with Section 38C of the Bombay Act and Section 26-B of the Kerala Act as Section 100 of the Transfer of Property Act, the Hon’ble Supreme Court at paragraphs 7, 8, 10 and 11 of the said decision held as under:- “7….. Section 100 of the Transfer of Property Act deals with charges on an immovable property which can be created either by an act of parties or by operation of law. It provides that where immovable property of one person is made security for the payment of money to another, and the transaction does not amount to a mortgage, a charge is created on the property and all the provisions in the Transfer of Property Act which apply to a simple mortgage shall, so far as may be, apply to such charge. A mortgage on the other hand, is defined under Section 58 of the Transfer of Property Act as a transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced as set out therein. The distinction between a mortgage and a charge was considered by this Court in Dattatreya Shanker Mote v. Anand Chintaman Datar. The Court has observed (at SCC pp. 806-07) that a charge is a wider term as it includes also a mortgage, in that, every mortgage is a charge, but every charge is not a mortgage. The Court has then considered the application of the second part of Section 100 of the Transfer of Property Act which inter alia deals with a charge not being enforceable against a bona fide transferee of the property for value without notice of the charge. It has held that the phrase ‘transferee of property’ refers to the transferee of entire interest in the property and it does not cover the transfer of only an interest in the property by way of a mortgage.” 8. …. It has held that the phrase ‘transferee of property’ refers to the transferee of entire interest in the property and it does not cover the transfer of only an interest in the property by way of a mortgage.” 8. …. The argument though ingenious, will have to be rejected. Where a mortgage is created in respect of any property, undoubtedly, an interest in the property is carved out in favour of the mortgagee. The mortgagor is entitled to redeem his property on payment of the mortgage dues. This does not, however, mean that the property ceases to be the property of the mortgagor. The title to the property remains with the mortgagor. Therefore, when a statutory first charge is created on the property of the dealer, the property subjected to the first charge is the entire property of the dealer. The interest of the mortgagee is not excluded from the first charge. The first charge, therefore, which is created under Section 11-AAAA of the Rajasthan Sales Tax Act will operate on the property as a whole and not only on the equity of redemption as urged by Mr. Tarkunde. … … … … … 10. In the present case, the section creates a first charge on the property, thus clearly giving priority to the statutory charge over all other charges on the property including a mortgage. The submission, therefore, that the statutory first charge created under Section 11-AAAA of the Rajasthan Sales Tax Act can operate only over the equity of redemption, cannot be accepted. The charge operates on the entire property of the dealer including the interest of the mortgagee therein. 11. Looked at a little differently, the statute has created a first charge on the property of the dealer. What is meant by a ‘first charge’? Does it have precedence over earlier mortgage? Now, as set out in Dattatreya Shanker Mote case a charge is a wider term than a mortgage. It would cover within its ambit a mortgage also. Therefore, when a first charge is created by operation of law over any property, that charge will have precedence over an existing mortgage.” The above judgment was referred and the same view was approved in the judgment in Central Bank’s Case (supra). It would cover within its ambit a mortgage also. Therefore, when a first charge is created by operation of law over any property, that charge will have precedence over an existing mortgage.” The above judgment was referred and the same view was approved in the judgment in Central Bank’s Case (supra). The right of the State to have priority in the matter of recovery of sales tax from the defaulters over the equitable mortgages created by them in favour of Banks and Financial Institutions is no longer res integra. 17. In Central Bank’s Case (supra), the Hon’ble Supreme Court was considering whether the non obstante clauses contained in Section 34 of the DRT Act and Section 35 of the Securitisation Act override Section 38-C of the Bombay Act and Section 26-B of the Kerala Act. After referring to various Central enactments containing non obstante clauses including Section 46-B of the State Financial Corporation Act, vis-à-vis the non obstante clauses contained in Section 38-C of the Bombay Act and Section 26-B of the Kerala Act and similar other state legislations, and holding that when a first charge is created by operation of law over any property, that charge will have precedence over the existing mortgage, the Hon’ble Supreme Court in Central Bank’s Case (supra) at paragraph 158 held as under:- 158. On the basis of the above discussion, we hold that the DRT Act and the Securitisation Act do not create first charge in favour of banks, financial institutions and other secured creditors and the provisions contained in Section 38-C of the Bombay Act and Section 26-B of the Kerala Act are not inconsistent with the provisions of the DRT Act and the Securitisation Act so as to attract non obstante clauses contained in Section 34(1) of the DRT Act or Section 35 of the Securitisation Act. 18. The learned senior counsel appearing for the petitioner relied upon (2009) 2 SCC 121 [Union of India versus Sicom Ltd. In paragraphs 152 to 157 of the Central Bank’s Case (supra) the Hon’ble Supreme Court considered decision in Sicom’s case and distinguished the same and held that Sicom’s case did not hold that statutory charge created in a State Legislation is subservient to the dues of the Banks, Financial Institutions etc. even though statutory first charge has not been created in their favour. even though statutory first charge has not been created in their favour. The judgment in Sicom’s case relied upon by the learned counsel for the petitioner is, therefore, not applicable in the present case. 19. The learned counsel for the petitioner submitted that in State Bank of Bikanner and Jaipur’s case [ (1995) 2 SCC 19 ] and also in the Central Bank’s case [ (2009) 4 SCC 94 ], the Hon’ble Supreme Court was considering the statutory first charge of sales tax vis-à-vis the charge of the bank in the capacity of mortgagee and therefore the Hon’ble Supreme Court held that when a first charge is created by operation of law over any property, that charge will have precedence over an existing mortgage. In both cases, the statutory right conferred upon the State Financial Corporation under Section 29(4) of the State Financial Corporation Act vis-à-vis statutory charge created by the State Legislation under Sales Tax Act has not been dealt with. There is no merit in the contention that the Hon’ble Supreme Court has not dealt with the provisions of the State Financial Corporation Act vis-à-vis the statutory charge created by the State Legislation under Sales Tax Act. While considering the non obstante clause occurring in various Central Legislations in paragraph 97.1 of the decision in Central Bank’s case [ (2009) 4 SCC 94 ], the Hon’ble Supreme Court has also referred to non-obstante clause in Section 46B of the State Financial Corporation Act. The Hon’ble Supreme Court has also considered the provisions of the State Financial Corporation Act vis-à-vis the statutory charge created by the State Legislation under the Sales Tax Act. 20. Learned senior counsel for the petitioner further submitted that in terms of Section 64 of the Bihar Re-organisation Act, it is evident that Bihar State Financial Corporation shall continue to function over the entire area of the erstwhile State of Bihar and only the Central Government has competence to issue instructions in the matter relating to or in respect of functioning of the said Corporation and submitted that the impugned notification is directly contrary to the provisions of Section 64 of the Bihar Re-organisation Act, inasmuch as by the impugned notification, Bihar State Financial Corporation has been virtually prevented from functioning in the area falling within the State of Jharkhand. 21. The above contention does not merit acceptance. 21. The above contention does not merit acceptance. The Bihar Reorganisation Act, 2000 provide for the reorganization of the existing State of Jharkhand and the matters connected therewith. The first charge on the property of the dealer or such person for any amount of tax and penalty payable by the dealer or any other person to the State of Jharkhand is not affected by the Bihar Re-organisation Act, 2000 and the State of Jharkhand is entitled to recover its sales tax and penalty since the tax and the penalty shall be the first charge over the property of the dealer and such a person. Only in exercise of its power to recover the tax payable or the penalty, as a first charge on the property of the dealer, the State of Jharkhand issued the impugned notification directing the petitioner Corporation that no industrial unit to be sold without obtaining ‘No Objection Certificate’ from the Department of Commercial Taxes, Jharkhand, Ranchi. 22. As held in (1995) 2 SCC 19 and (2009) 4 SCC 94 the first charge created in favour of the State in respect of sales tax dues shall have precedence over an existing mortgage in favour of the Bank. The judicial pronouncement settled the law once for all stating that the State has got priority in the matter of recovery of tax, penalty and debts due and the specific statutory charges created under the said Act (notwithstanding the equitable mortgages created by the defaulters in favour of the Banks). The impugned Notification S.O. 95 dated 01.09.2004 cannot be said to be arbitrary or illegal, and this writ petition is liable to be dismissed. Accordingly, we dismiss this writ petition. Consequently, the interlocutory applications are closed.