Published on: May 01, 2024 20:01 IST
Court: Supreme Court of India
Citation: SBI v. C. Natarajan 2024
Honourable Supreme Court of India has held that Section 35 of the SARFAESI Act being a special law overrides other laws in the same including Contract Act. It is held that in case of any seeming conflict or inconsistency between the general law i.e. the Contract Act and the special law i.e. the Sarfaesi Act, it is the latter that would prevail. It is held that Court can not interfere process of auction under the SARFAESI Act as the regime under the Sarfaesi Act is altogether different and Sections 35 and 37 are intended to extend a cover to the secured creditor if it abides by the governing law.
31. That apart, significantly, Section 35 of the Sarfaesi Act mandates that the provisions thereof would have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any other instrument having effect by virtue of any such law. At the same time, Section 37 of the Sarfaesi Act postulates that provisions thereof or the rules made thereunder shall be in addition to and not in derogation of the enumerated enactments or any other law for the time being in force. What is of importance is that the non obstante clause in Section 35 of the Sarfaesi Act is not subject to Section 37 thereof; however, a plain reading of the latter provision would suggest that rights, liabilities, obligations, remedies, etc. created/imposed/provided by the Sarfaesi Act and the Rules are preserved, irrespective of what is provided in the stated enactments or any other law for the time being in force.
Drafted By Abhijit Mishra