KOTAK MAHINDRA BANK LIMITEDversusGIRNAR CORRUGATORS PVT. LTD. & ORS.

                         [2023] 1 S.C.R. 873                            873


             KOTAK MAHINDRA BANK LIMITED                                A
                                 v.
         GIRNAR CORRUGATORS PVT. LTD. & ORS.
                   (Civil Appeal No.6662 of 2022)
                        JANUARY 05, 2023                                B
         [M. R. SHAH AND KRISHNA MURARI, JJ.]
       Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (SARFAESI Act) – ss.
13(2), 13(4), 14, 17, 26E – Micro, Small and Medium Enterprises         C
Development Act, 2006 (MSMED Act) – ss. 15-23, 24 – Whether
the MSMED Act would prevail over the SARFAESI Act and whether
recovery proceedings/recoveries under MSMED Act would prevail
over the recoveries made/recovery proceedings under provisions
of the SARFAESI Act – Held : Sec 15 to 23 of the MSMED Act
provides a special mechanism for adjudication of dispute between        D
buyer and seller – But does not provides for priority over debt dues
of the secured creditor akin to s.26E of the SARFAESI Act – A
‘priority’ conferred / provided under Section 26E of the SARFAESI
Act would prevail over the recovery mechanism of the MSMED
Act – There is no repugnancy between the two Acts – In the absence      E
of any specific provision for priority in the MSMED Act, if MSMED
Act is allowed to prevail it would defeat the very object and purpose
of SARFAESI Act – Under section 14 of the SARFAESI Act, District
Magistrate or the Chief Metropolitan Magistrate is required to assist
the secured creditor in getting the possession of the secured assets    F
– Neither, District Magistrate or Metropolitan Magistrate would
have jurisdiction to adjudicate the matter between secured creditor
and debtor – Person aggrieved by the steps u/s. 13(4) and s.14 of
the SARFAESI Act has to approach Debts Recovery Tribunal by
way of appeal/application u/s. 17 of the SARFAESI Act – Recoveries
under the SARFAESI Act with respect to the secured assets would         G
prevail over the recoveries under the MSMED Act.
      Allowing the appeal, the Court
     HELD: 1. In the entire Micro, Small and Medium
Enterprises Development Act, 2006 (MSMED Act), there is no              H
                                873
874            SUPREME COURT REPORTS                       [2023] 1 S.C.R.


A     specific express provision giving ‘priority’ for payments under
      the MSMED Act over the dues of the secured creditors or over
      any taxes or cesses payable to Central Government or State
      Government or Local Authority as the case may be. In sharp
      contrast to this, Section 26E of the Securitisation and
B     Reconstruction of Financial Assets and Enforcement of Security
      Interest Act, 2002 (SARFAESI Act) which has been inserted vide
      Amendment in 2016, it provides that 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
C     other debts and all revenue taxes and cesses and other rates
      payable to the Central Government or State Government or Local
      Authority. However, the priority to secured creditors in payment
      of debt as per Section 26E of the SARFAESI Act shall be subject
      to the provisions of the IBC. At this stage, it is required to be
D     noted Section 26E of the SARFAESI Act which is inserted in
      2016 is also having a non-obstante clause. As per the settle
      position of law, if the legislature confers the later enactment with
      a non-obstante clause, it means the legislature wanted the
      subsequent / later enactment to prevail. Thus, a ‘priority’
E     conferred / provided under Section 26E of the SARFAESI Act
      would prevail over the recovery mechanism of the MSMED Act.
      Sections 15 to 23 of the MSMED Act are providing a special
      mechanism for adjudication of the disputes and to adjudicate and
      resolve the disputes between the supplier and buyer – micro or
      small enterprise. At the cost of repetition, it is observed that
F     MSMED Act does not provide any priority over the debt dues of
      the secured creditor akin to Section 26E of the SARFAESI Act.
      [Para 7][883-B-G]
            2. SARFAESI Act has been enacted providing specific
      mechanism / provision for the financial assets and security
G
      interest. It is a special legislation for enforcement of security
      interest which is created in favour of the secured creditor –
      financial institution. Therefore, in absence of any specific
      provision for priority of the dues under MSMED Act, if the
      submission on behalf of respondent No.1 for the dues under
H
KOTAK MAHINDRA BANK LTD. v. GIRNAR CORRUGATORS                        875
               PVT. LTD. & ORS.

MSMED Act would prevail over the SARFAESI Act, then in that           A
case, not only the object and purpose of special enactment /
SARFAESI Act would be frustrated, even the later enactment by
way of insertion of Section 26E of the SARFAESI Act would be
frustrated. If the submission on behalf of respondent No.1 is
accepted, then in that case, Section 26E of the SARFAESI Act          B
would become nugatory and would become otiose and/or
redundant. Any other contrary view would be defeating the
provision of Section 26E of the SARFAESI Act and also the object
and purpose of the SARFAESI Act. [Para 9][884-D-G]
      3. While exercising power under Section 14 of the               C
SARFAESI Act, even the District Magistrate has no jurisdiction
and/or District Magistrate and/or even the Chief Metropolitan
Magistrate has no jurisdiction to adjudicate the dispute between
secured creditor and debtor. Under Section 14 of the SARFAESI
Act, the District Magistrate or the Chief Metropolitan Magistrate     D
as the case may be is required to assist the secured creditor in
getting the possession of the secured assets. Under Section 14
of the SARFAESI Act, neither District Magistrate nor
Metropolitan Magistrate would have any jurisdiction to adjudicate
and/or decide the dispute even between the secured creditor
and the debtor. If any person is aggrieved by the steps under         E
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. It is
observed and held that so far as recoveries under the SARFAESI
Act with respect to the secured assets would prevail over the         F
recoveries under the MSMED Act to recover the amount under
the award / decree passed by the Facilitation Council. [Paras 10
and 11][885-B-D, F-G]

      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6662
of 2022.                                                              G

     From the Judgment and Order dated 11.08.2017 of the High Court
of Madhya Pradesh Bench at Indore in Writ Appeal No.248 of 2017.

      Amar Dave, Himanshu Bhushan, Krishnayan Sen, Advs. for the
Appellant.                                                            H
876             SUPREME COURT REPORTS                             [2023] 1 S.C.R.


A           Saurabh Mishra, AAG, Niranjan Reddy, Sr. Adv., Pulkit Tare,
      Aditya Shekhar, Abhishek Sharma, Sunny Choudhary, Shiv Sagar Tiwari,
      Arjun Garg, Advs. for the Respondents.

             The Judgment of the Court was delivered by

B            M. R. SHAH, J.

             1. Feeling aggrieved by and dissatisfied with the impugned
      judgment and order passed by the Division Bench of the High Court of
      Madhya Pradesh at Indore dated 11.08.2017 in Writ Appeal No. 248 of
      2017, by which the Division Bench of the High Court has allowed the
C     said appeal preferred by respondent No.1 herein and has quashed and
      set aside the judgment and order passed by the learned Single Judge and
      has observed and held that Micro, Small and Medium Enterprises
      Development Act, 2006 (hereinafter referred to as ‘MSMED Act’) will
      prevail over Securitisation and Reconstruction of Financial Assets and
D     Enforcement of Security Interest Act, 2002 (hereinafter referred to as
      ‘SARFAESI Act’), the secured creditor – Kotak Mahindra Bank Limited
      has preferred the present appeal.
             The facts leading to the present appeal, in nut shell, are as under:

E            1.1 One Mission Vivacare (hereinafter referred to as ‘debtor’)
      advanced various credit facilities by the appellant bank – secured creditor.
      In order to secure the various credit facilities, Plot Nos. 16 and 14, situated
      in SEZ Area of Dhar were mortgaged along with certain movable fixed
      assets.
F            1.2 On account of default in payment of loan / debt, the bank-
      initiated recovery proceedings in respect of the secured assets
      contemplated under Section 13(2) of the SARFAESI Act. The bank –
      secured creditor filed an application before the District Magistrate on
      17.06.2014 under Section 14 of the SARFAESI Act seeking assistance
G     from taking possession of the secured assets. By order dated 24.09.2014,
      the District Magistrate allowed the said application by directing the SDM,
      District: Dhar to take vacant possession of the secured assets. However,
      no action was taken and therefore, the bank submitted applications to
      the District Magistrate and the SDM complaining non-compliance of
      the order to take possession of the secured assets. Finally, SDM issued
H
KOTAK MAHINDRA BANK LTD. v. GIRNAR CORRUGATORS                                877
         PVT. LTD. & ORS. [M. R. SHAH, J.]

direction to the Naib Tehsildar vide communication dated 07.11.2015 to        A
comply the order of the District Magistrate and obtain the possession by
taking police assistance. Thereafter vide order dated 21.03.2016, Naib
Tehsildar refused to take possession and to comply the order dated
24.09.2014 on the ground that one recovery proceeding is pending for
recovery of certain amounts from the secured assets and on the ground         B
that the recovery certificate issued in favour of respondent No.1 (original
respondent No.4 before the High Court) was already pending for
recovery of certain amounts from the aforesaid two secured assets. At
this stage, it is required to be noted that the recovery certificates were
issued in favour of respondent No.1 pursuant to the award passed by
the Facilitation Council on 11.09.2014 which was in favour of respondent      C
No.1 herein, which was under provisions of MSMED Act. The order
passed by the Naib Tehsildar refusing to take possession of the secured
assets pursuant to the order passed by the District Magistrate dated
24.09.2014 was the subject matter of writ petition before the learned
Single Judge of the High Court by way of Writ Petition No.2569 of             D
2016. While refusing to take possession of the secured assets pursuant
to the order passed by the District Magistrate under Section 14 of the
SARFAESI Act, Naib Tehsildar observed that MSMED Act being a
special enactment enacted subsequent to SARFAESI Act would have
overriding effect and therefore, MSMED Act would prevail over the             E
SARFAESI Act.
      1.3 The learned Single Judge allowed the writ petition preferred
by the bank – secured creditor and set aside the order passed by the
Naib Tehsildar by observing that the provisions of SARFAESI Act would
prevail and if respondent No.1 is aggrieved by the order passed by the        F
District Magistrate under Section 14 of the SARFAESI Act or the
measures taken under Section 13(4) of the SARFAESI Act, he may
prefer an appeal/application under Section 17 of the SARFAESI Act
before the Debts Recovery Tribunal.
      1.4 Feeling aggrieved by and dissatisfied with the judgment and         G
order passed by the learned Single Judge holding that the SARFAESI
Act would prevail, respondent No.1 herein in whose favour there was
an award under provisions of the MSMED Act and in whose favour the
recovery certificates were issued, filed the present writ appeal before
the Division Bench of the High Court. By the impugned judgment and            H
878            SUPREME COURT REPORTS                          [2023] 1 S.C.R.


A     order, the Division Bench of the High Court has allowed the said appeal
      and has set aside the judgment and order passed by the learned Single
      Judge and has observed and held that MSMED Act being the later
      enactment, the same shall prevail over the SARFAESI Act.

             1.5 The impugned judgment and order passed by the Division
B     Bench of the High Court holding that MSMED Act being later enactment,
      the same would prevail over the SARFAESI Act the bank – secured
      creditor has preferred the present appeal.

              2. Shri Amar Dave, learned counsel appearing for the appellant
      bank – secured creditor has vehemently submitted that as such, there is
C
      no repugnancy between the provisions of SARFAESI Act and MSMED
      Act. It is submitted that non- obstante clause in the MSMED Act, i.e.
      Section 24 provides that provisions under Sections 15 to 23 shall have
      effect notwithstanding anything inconsistent therewith contained in any
      other law for the time being in force. It is submitted that Sections 15 to
D     23 of the MSMED Act only provide for special mechanism for
      adjudication of the dispute along with enforcing certain other contractual
      and business terms on the parties such as time limit for payments and
      interest in case of delayed payments. It is submitted that the perusal of
      the said scheme, from Sections 15 to 23 of the MSMED Act, clearly
E     shows that there is no express ‘priority’ envisaged for payments under
      the MSMED Act over the dues of secured creditors or over any taxes
      or cesses payable to Central Government or State Government or Local
      Authority as the case may be. It is submitted that no provision to this
      effect is consciously provided. It is submitted that in sharp contrast to
      this, the perusal of the scheme of SARFAESI Act, including in Section
F
      26E, thereof leaves no room for doubt that the legislature has expressly
      and unambiguously provided for a legal framework exclusively on the
      issue of ‘priority’ of payment of dues. It is submitted that in case of
      certain other legislations, there is express provision for the manner in
      which the dues thereunder may either have a charge over the property
G     or have ‘priority’ over other dues. Reference is made to the provisions
      of the Maharashtra Value Added Tax Act, 2002; Employees’ Provident
      Fund and Miscellaneous Provisions Act, 1952; Kerala General Sales
      Tax Act, 1963; Workmen’s Compensation Act, 1923; Central Excise
      Act, 1944; Enforcement of Security Interest and Recovery Debts Laws
H     and Miscellaneous Provisions (Amendment) Act, 2016, etc. It is submitted
KOTAK MAHINDRA BANK LTD. v. GIRNAR CORRUGATORS                                   879
         PVT. LTD. & ORS. [M. R. SHAH, J.]

that in the absence of such express provisions, there can be no basis to         A
ignore the specific scheme of the SARFAESI Act in comparison to such
specific scheme under the MSMED Act with regard to ‘priority’ of
payments. It is submitted that any such ‘priority’ over and above the
dues of secured creditors or government dues has to be expressly and
unambiguously provided for and cannot be read by implication. It is              B
submitted that viewed from this angle, in fact, there is no conflict between
the two schemes, i.e. MSMED Act and SARFAESI Act as far as the
specific subject of ‘priority’ is concerned.

      2.1    It is further submitted that Section 26E of the SARFAESI
             Act being subsequently inserted vide amendment in 2016,             C
             the non-obstante clause in Section 26E of the SARFAESI
             Act shall prevail over the provisions of MSMED Act.
             Reliance is placed on the decision of this Court in case of
             Bank of India vs. Ketan Praekh & Ors. [(2008) 8 SCC
             148 (para 28)].                                                     D
      2.2    Making above submissions, it is prayed to allow the present
             appeal and quash and set aside the impugned judgment and
             order passed by the Division Bench and restore the judgment
             and order passed by the learned Single Judge by holding
             that the recoveries under SARFAESI Act shall be accorded            E
             priority over recoveries under MSMED Act.
     3. The present appeal is vehemently opposed by Shri Niranjan
Reddy, learned Senior Counsel appearing for respondent No.1.
      3.1    Learned counsel appearing for respondent No.1 has                   F
             vehemently submitted that MSMED Act has been enacted
             to promote and protect the interests of the small and medium
             scale enterprises which is a source of livelihood for several
             citizens and contributes towards 27% to the GDP. It is
             submitted that therefore, aggressive provisions were brought
                                                                                 G
             in for the recovery of dues and compound interests are
             given in MSMED Act which is not present in any other
             legislations and is in the nature of a beneficial legislation. It
             is submitted that therefore, in view of Section 24 of the
             MSMED Act which provides for an overriding effect over
             other prevailing laws, the provisions with respect to               H
880     SUPREME COURT REPORTS                             [2023] 1 S.C.R.


A           recoveries under MSMED Act shall prevail over the
            recoveries under SARFAESI Act.
      3.2   It is submitted that the financial institutions have various
            other means of recovery including SARFAESI Act, IBC
            etc. as being a secured creditor to an extent of also taking
B           personal guarantee from the Directors of the company in
            certain cases. However, such liberty of taking personal
            guarantees etc. are not available to MSME and they
            completely rely on MSMED Act for recovery of dues and
            as such have only one method of recovery by virtue of the
C           award which is in the nature of a decree from the Facilitation
            Council. It is submitted that in the above said context, an
            overriding provision is provided under Section 24 of the
            MSMED Act.
      3.3   It is submitted that Section 24 of the MSMED Act provides
D           for an overriding effect over other prevailing laws. It is
            submitted that the provisions of Sections 15 to 23 of the
            MSMED Act shall have effect notwithstanding anything
            inconsistent therewith contained in any other law for the
            time being in force. It is submitted that the entire scheme
E           of provisions under Chapter V – Sections 15 to 23 which
            includes delayed payments, recovery of amounts due, and
            establishment of Facilitation Council and its award has an
            overriding effect on all other legislations including
            SARFAESI Act. It is submitted that therefore, an award
            from the Facilitation Council will also have an overriding
F
            effect by virtue of Section 24. It is submitted that the
            intention of the legislature is clear as the overriding provision
            is for a particular set of delayed payments recovery
            mechanism provided under MSMED Act which is also in
            consonance with object and purpose of the MSMED Act.
G
      3.4   It is further submitted that MSMED Act is a subsequent
            legislation and by providing Section 24 of the MSMED Act,
            the legislature has purposefully and knowingly superseded
            all the recovery procedures prevailing at that relevant point
            of time, by its non-obstante clause. It is submitted that if
H
KOTAK MAHINDRA BANK LTD. v. GIRNAR CORRUGATORS                              881
         PVT. LTD. & ORS. [M. R. SHAH, J.]

         any contrary interpretation is to be given to the said position    A
         of law, then the same would make Section 24 redundant,
         which by all means is not the intention of the legislature. It
         is submitted that if SARFAESI Act is given overriding effect
         over the MSMED Act, then it would render awards of the
         Facilitation Council as non-executable in all cases where          B
         there is a secured creditor. It is submitted that the same
         would severely affect the existence and growth of the
         MSME and is also against object of the MSMED Act.

   3.5   It is submitted that as per the law laid down by this Court in
         catena of decisions, if two enactments have competing non-         C
         obstante provision and nothing repugnant, then the non-
         obstante clause of the subsequent statute would prevail over
         the earlier enactments. It is submitted that the principle
         therefore would be that the court must look into the objectives
         of the two Special Acts. It is submitted that if the legislature   D
         still confers the later enactment with a non-obstante clause,
         it means the legislature wanted the enactment to prevail. It
         is submitted that therefore, non-obstante clause in MSMED
         Act, i.e. Section 24 would prevail over the recovery
         mechanism of SARFAESI Act, being enacted later in point
         of time, overriding all other laws being in force at that point    E
         of time.
   3.6   It is submitted that the State Madhya Pradesh in exercise
         of powers conferred under Section 30 read with sub-section
         (3) of Section 21 of the MSMED Act made the Rules known
                                                                            F
         as ‘M.P. Micro and Small Enterprises Facilitation Council
         Rules, 2006’ for procedure to be followed for recovery of
         amounts due. It is submitted that under the said Rules, the
         decree, award or order passed under provisions of MSMED
         Act shall be executed by the Collector of the District
         concerned and the amount due shall be recovered as arrears         G
         of land revenue. It is submitted that as per Section 137 of
         Madhya Pradesh Land Revenue Code, 1959, land revenue
         would have first charge on the proceeds of the recovery of
         dues from the subject property. It is submitted that
                                                                            H
882            SUPREME COURT REPORTS                            [2023] 1 S.C.R.


A                  SARFAESI Act does not provide that it will have
                   precedence over a decree / award of the decree holder.
            3.7    It is submitted that Section 240A of the IBC, 2016 provides
                   exception of certain provisions of Section 29A of the IBC
                   to MSME. It is submitted that it is a settled law that IBC,
B                  2016 would override SARFAESI Act and therefore, in the
                   said context also, MSMED Act may have precedence over
                   SARFAESI Act.

            3.8    It is further submitted that MSMED Act is an extension of
                   the welfare policy of the State and may need to be
C
                   considered in order to balance the larger public interest of
                   the small and medium scale enterprises and their means of
                   existence. It is submitted that therefore, to strike the balance
                   of interest for survival of small and medium scale
                   enterprises, it is prayed to interpret the provisions in favour
D                  of the small and medium scale enterprises and to hold that
                   the recoveries under MSMED Act would prevail over the
                   recoveries under SARFAESI Act.
            3.9    Making above submissions, it is prayed to dismiss the present
                   appeal.
E
             4. Heard learned counsel appearing for the respective parties at
      length.
            5. The short question which is posed for the consideration of this
      Court is whether the MSMED Act would prevail over the SARFAESI
F     Act? The question is whether recovery proceedings / recoveries under
      the MSMED Act would prevail over the recoveries made / recovery
      proceedings under provisions of the SARFAESI Act?
             6. It is the case on behalf of respondent No.1 that in view of
G     Section 24 of the MSMED Act which provides that the provisions of
      Sections 15 to 23 of the MSMED Act would have overriding effect and
      shall have effect notwithstanding anything inconsistent therewith
      contained in any other law for the time being in force and in view of the
      fact that the MSMED Act being a later enactment, then the SARFAESI
      Act, the MSMED Act would prevail over the SARFAESI Act.
H
KOTAK MAHINDRA BANK LTD. v. GIRNAR CORRUGATORS                                 883
         PVT. LTD. & ORS. [M. R. SHAH, J.]

        7. While appreciating the above submissions, it is required to be      A
appreciated that Sections 15 to 23 of the MSMED Act only provide for
special mechanism for adjudication of the dispute along with enforcing
certain other contractual and business terms on the parties such as time
limit for payments and interest in case of delayed payments. In the entire
MSMED Act, there is no specific express provision giving ‘priority’ for        B
payments under the MSMED Act over the dues of the secured creditors
or over any taxes or cesses payable to Central Government or State
Government or Local Authority as the case may be. In sharp contrast to
this, Section 26E of the SARFAESI Act which has been inserted vide
Amendment in 2016, it provides that notwithstanding anything inconsistent
therewith contained in any other law for the time being in force, after        C
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 Authority. However, the priority to secured creditors
in payment of debt as per Section 26E of the SARFAESI Act shall be             D
subject to the provisions of the IBC. Therefore, such dues vis-a-vis dues
under the MSMED Act, as per the decree or order passed by the
Facilitation Council debts due to the secured creditor shall have a priority
in view of Section 26E of the SARFAESI Act which is later enactment
in point of time than the MSMED Act. At this stage, it is required to be       E
noted Section 26E of the SARFAESI Act which is inserted in 2016 is
also having a non-obstante clause. Even as per the submission on behalf
of respondent No.1, two enactments have competing non-obstante
provision and nothing repugnant, then the non-obstante clause of the
subsequent statute would prevail over the earlier enactments. As per
the settle position of law, if the legislature confers the later enactment     F
with a non-obstante clause, it means the legislature wanted the subsequent
/ later enactment to prevail. Thus, a ‘priority’ conferred / provided under
Section 26E of the SARFAESI Act would prevail over the recovery
mechanism of the MSMED Act. The aforesaid is to be considered along
with the fact that under provisions of the MSMED Act, more particularly        G
Sections 15 to 23, no ‘priority’ is provided with respect to the dues under
the MSMED Act, like Section 26E of the SARFAESI Act.
      8. As observed hereinabove, Sections 15 to 23 of the MSMED
Act are providing a special mechanism for adjudication of the disputes
                                                                               H
884             SUPREME COURT REPORTS                            [2023] 1 S.C.R.


A     and to adjudicate and resolve the disputes between the supplier and
      buyer – micro or small enterprise. At the cost of repetition, it is observed
      that MSMED Act does not provide any priority over the debt dues of the
      secured creditor akin to Section 26E of the SARFAESI Act. At the
      most, the decree / order / award passed by the Facilitation Council shall
B     be executed as such and the micro or small enterprise in whose favour
      the award or decree has been passed by the Facilitation Council shall be
      entitled to execute the same like other debts / creditors. Therefore,
      considering the provisions of Sections 15 to 23 read with Section 24 of
      the MSMED Act and the provisions of the SARFAESI Act, as such,
      there is no repugnancy between two enactments viz. SARFAESI Act
C     and MSMED Act. As such, there is no conflict between two schemes,
      i.e. MSMED Act and SARFAESI Act as far as the specific subject of
      ‘priority’ is concerned.
             9. At this stage, the object and purpose of the enactment of
D     SARFAESI Act is required to be considered. SARFAESI Act has been
      enacted to regulate securitization and reconstruction of financial assets
      and enforcement of security interest and to provide for a central debts
      of security interest created on property rights, and for matters connected
      therewith or incidental thereto. Therefore, SARFAESI Act has been
      enacted providing specific mechanism / provision for the financial assets
E     and security interest. It is a special legislation for enforcement of security
      interest which is created in favour of the secured creditor – financial
      institution. Therefore, in absence of any specific provision for priority of
      the dues under MSMED Act, if the submission on behalf of respondent
      No.1 for the dues under MSMED Act would prevail over the SARFAESI
F     Act, then in that case, not only the object and purpose of special
      enactment / SARFAESI Act would be frustrated, even the later enactment
      by way of insertion of Section 26E of the SARFAESI Act would be
      frustrated. If the submission on behalf of respondent No.1 is accepted,
      then in that case, Section 26E of the SARFAESI Act would become
      nugatory and would become otiose and/or redundant. Any other contrary
G
      view would be defeating the provision of Section 26E of the SARFAESI
      Act and also the object and purpose of the SARFAESI Act.
            10. Even otherwise the Naib Tehsildar was not at all justified in
      not taking possession of the secured assets / properties as per order
H     dated 24.09.2014 passed by the District Magistrate under Section 14 of
KOTAK MAHINDRA BANK LTD. v. GIRNAR CORRUGATORS                                885
         PVT. LTD. & ORS. [M. R. SHAH, J.]

the SARFAESI Act. The order passed by the Naib Tehsildar refusing to          A
take possession of the secured assets / properties despite the order passed
under Section 14 of the SARFAESI Act on the ground that recovery
certificates issued by respondent No.1 for recovery of the orders passed
by the Facilitation Council are pending, is wholly without jurisdiction.
While exercising power under Section 14 of the SARFAESI Act, even             B
the District Magistrate has no jurisdiction and/or District Magistrate and/
or even the Chief Metropolitan Magistrate has no jurisdiction to adjudicate
the dispute between secured creditor and debtor. Under Section 14 of
the SARFAESI Act, the District Magistrate or the Chief Metropolitan
Magistrate as the case may be is required to assist the secured creditor
in getting the possession of the secured assets. Under Section 14 of the      C
SARFAESI Act, neither District Magistrate nor Metropolitan Magistrate
would have any jurisdiction to adjudicate and/or decide the dispute even
between the secured creditor and the debtor. 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           D
way of appeal / application under Section 17 of the SARFAESI Act.
Therefore, the order passed by the Naib Tehsildar refusing to take the
possession pursuant to the order passed by the District Magistrate under
Section 14 of the SARFAESI Act was wholly without jurisdiction and
therefore also the same was liable to be set aside.                           E
       11. In view of the above and further reasons stated above, the
impugned judgment and order passed by the Division Bench of the High
Court is unsustainable and the same deserves to be quashed and set
aside. Consequently, the present appeal is allowed. The impugned
judgment and order dated 11.08.2017 passed by the Division Bench of           F
the High Court of Madhya Pradesh at Indore in Writ Appeal No. 268 of
2017 is set aside and the judgment and order passed by the learned
Single Judge is hereby restored. It is observed and held that so far as
recoveries under the SARFAESI Act with respect to the secured assets
would prevail over the recoveries under the MSMED Act to recover the
                                                                              G
amount under the award / decree passed by the Facilitation Council. It is
rightly observed by the learned Single Judge that if respondent No.1 is
aggrieved by the order passed by the District Magistrate under Section
14 of the SARFAESI Act, it will be open for him to initiate proceedings
under Section 17 of the SARFAESI Act which be considered in
                                                                              H
886              SUPREME COURT REPORTS                               [2023] 1 S.C.R.


A     accordance with law and on its merits and subject to the provisions of
      Section 17 and the provisions of the SARFAESI Act.
               12. The present appeal is accordingly allowed. No order as to
      costs.

B
      Ankit Gyan                                                        Appeal allowed.
      (Assisted by : Abhishek Pratap Singh and Rahul Rathi, LCRAs)




C




D




E




F




G




H