The top court noted that is a settled position of law that among two statutes, if one has a non-obstante clause, it means that the legislature wanted the same to prevail over the other.
Section 26E of the SARFAESI Act, which is a non-obstante clause (a proviso added to uphold its enforceability over one contradictory to it), states,
“…notwithstanding anything inconsistent therewith contained in any other law for the time being in force, after the registration of security interest, the debts due to any secured creditor shall be paid in ‘priority’ over all other debts and all revenue taxes and cesses and other rates payable to the Central Government or State Government or local authorities.“
It underscored that the SARFAESI Act was a a special legislation for enforcement of security interest created in favour of secured creditors/financial institutions.
Further, no magistrate would have jurisdiction to adjudicate disputes between secured creditors and debtors.
“If any person is aggrieved by the steps under Section 13(4) / order passed under Section 14, then the aggrieved person has to approach the Debts Recovery Tribunal by way of appeal / application under Section 17 of the SARFAESI Act.“
The judges thus held that the Tehsildar’s actions were incorrect, and accordingly allowed the appeals.
Source: Barandbench
