UCO BANK AND ANR.versusDIPAK DEBBARMA & ORS.

                        [2016] II S.C.R. 723


                     UCO BANK AND ANR.                                  A
                                 v.
                   DIPAK DEBBARMA & ORS.
                 (Civil Appeal No.11247 of 2016)
                                                                        B
                       NOVEMBER25,2016
  [RANJAN GOGOi AND ABHAY MANOHAR SAPRE, JJ.)
      Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 - s.13 - Tripura Land
Revenue and Land Rejorms Act, 1960 - s.187 - The Act of 2002            c
provides for sale of immovable properties offered as security for a
loan advanced, without any restriction as to the class or category
of buyers, is in infraction ofs.187 of the Tripura Act of 1960, where
there is embargo on sale of mortgaged properties by the bank to
any person who is not a member of a Scheduled Tribe - Propriety         D
of - Held: The Act of 2002 enacted by the Union Parliament is
referable to Entry 45 ofList I, whereas the Tripura Act can be traced
to Entries 18 and 45 of the State List - In event the incidental
encroachment conflicts with legislation actually enacted by the
dominant power, the dominant legislation will prevail - In instant      E
case, the conflict is between the Central and the State Act - The
dominant legislation being the Parliamentary legislation i.e. the Act
of2002, the provisions of the TripuraAct of 1960, pro tanto, (s.187)
would be invalid 'to the extent it is inconsistent with the Act of
2002 - Conflict of Laws - Constitution of India -Arts: 31-B, 246,
                                                                        F
254; and Seventh Schedule - List I, Entry 45 and List JI, Entries 18
and 45.
      Allowing the appeals, the Court
      HELD: 1.1 The situation ofrepugnancy or inconsistency
as in the present case is between to a subsequent Central law           G
(Act of 2002) covered by Entry 45 of List I and an earlier State
law (Tripura Act of 1960) relatable to Entries 18 and 45 of List
II. [Para 9) [730-C)

                                                                        H
                                723
724          SUPREME COURT REPORTS                    f2016111 S.C.R.


A        1.2 In interpreting Article 246 of Constitution of India
  regard must be had to the constitutional scheme which visualises
  a federal structure giving full autonomy to the Union Parliament
  as well as to the State legislatures in their respective/ demarcated
  fields of legislation. The problem may, however, become a
B little more complex thiln what may seemingly appear as the
  two legislations may very well be within the respective domains
  of the concerned legislatures and, yet, there may be intrusion
  into areas that fall beyond the assigned fields of legislation. In
  such a situation it will be plain duty of the Constitutional Court to
C see if the conflict can be resolved by acknowledging the mutual
  existence of the two legislations. If that is not possible, then by
  virtue of the provisions of Article 246(1), the Parliamentary
  legislation would prevail and the State legislation will have to give
  way notwithstanding the fact that the State legislation is within
D the demarcated field (List II). This is the principle of federal
  supremacy which Article 246 of the Constitution embodies.
  The said principle will, however, prevail provided the pre-
  condition exists, namely, the Parliamentary legislation is the
  dominant legislation and the State legislation, though within its
  own field, has the effect of encroaching on a vital sphere of the
E subject or entry to which the dominant legislation is referable.
  (Para 11) (731-B-E]
          State of West Bengal and Ors. vs. Committee for
          Protection of Democratic Rights, West Bengal and
          Ors. 2010 (2) SCR 979: 2010 (3) SCC571; Re. Special
 F        Reference No. I of 2001 2004 (3) SCR 534: 2004 (4)
          SCC 489; ITC Ltd. vs. Agricultural Produce Market
          Committee and Ors. 2002 (1) SCR441: 2002 (9) SCC
          232; S.R. Bomai vs. Union of India 1994 (2) SCR
          644 : 1994 (3) sec 1 - relied on.
 G        Mis Hoechst Pharmaceuticals Ltd. and Ors. vs. State
          of Bihar and Ors. 1983 (3) SCR 130: 1983 (4) SCC
          45; State of W.B. vs. Kesoram Industries Ltd. and Ors.
          2004 (1) SCR 564 : 2004 (10) sec 201; Vishal N.
          Kalsaria vs. Bank ofIndia & Ors. 2016 (1) SCR 419 :
 H        2016 (3) sec 762 - referred to.
     UCO BANK AND ANR. v. DlPAK DEBBARMA & ORS.                        725



       2.1 In the present case the conflict between the Central         A
 and the State Act is on account of an apparent overstepping by
 the provisions of the State Act dealing with land reform into an
 area of banking covered by the Central Act. The test, therefore,
 would be to find out as to which is the dominant legislation having
 regard the area of encroachment. [Para 15] [735-E-F]                   B
        2.2 The Act of 2002 is relatable to the Entry of banking
  which is included in List I of the Seventh Schedule. Sale of
  mortgaged property by a bank is an inseparable and integral part
  of the business of banking. The object of the State Act is an
  attempt to consolidate the land revenue law in the State and also     c
  to provide measures of agrarian reforms. The field of
  encroachment made by the State legislature is in the area of
  banking. So long there did not exist any parallel Central Act
  dealing with sale of secured assets and referable to Entry 45 of
  List I, the State Act, including Section 187, operated validly.       D
  However, the moment Parliament stepped in by enacting such a
  law traceable to Entry 45 and dealing exclusively with activities
  relating to sale of secured assets, the State law, to the extent
  that it is inconsistent with the Act of 2002, must give way. The
  dominant legislation being the Parliamentary legislation, the         E
  provisions of the Tripura Act of 1960, pro tanto, (Section 187)
  would be invalid. It is the provisions of the Act of2002, which do
  not ·contain any embargo on the category of persons to whom
  mortgaged property can be sold by the bank for realisation of
  its dues that will prevail over the provisions contaiqed in
                                                                        F
. Section 1R7 of the Tripura Act of 1960. [Para 18] [736-B-E]
       Central Bank ofIndia vs. State ofKera/a and Ors. 2009
       (3) SCR 735: 2009 (4) SCC 94 - referred to.
                       Case Law Reference
                                                                        G
 1983 (3) SCR 130               referred to            Para7
 2004 (1) SCR 564               referred to            Paras
 2010 (2) SCR 979               relied on              Parall
 2004 (3) SCR 534               relied on              Para12
                                                                        H
726            SUPREME COURT REPORTS                        r2016111 s.c.R.


A     2002 (1) SCR 441                 relied on                Para13
      1994 (2) SCR 644                 relied on                 Para 13
      2016 (1) SCR 419                 referred to               Para 14
      2009 (3) SCR 735                 referred to               Para 19
B
           CIVILAPPELLATEJURISDICTION: Civil Appeal No. 11247
      of2016.
           From the Judgment and Order dated 11.09.2012 of the High Court
      ofGauhati Bench atAgartala in Writ Petition (C) No. 378of2012
C           WITH
            C. A. No. 11250of2016.
             Mukul Rohatgi,AG, V. Giri, Sr. Adv., Ms. Arti Singh, Ms. Pooja
      Singh, Shankar Divate, Manoj, Ms. Aparna Sinha,Abhijat P. Medh, Shivam
 D    Singh. Rituraj Biswsas, Gopal Singh, Ms. Varsha Poddar, Sagar
      Chakravarty, Advs. for the appearing parties.
            The Judgment of the Court was delivered by
            RANJAN GOGOi, J, 1. Leave granted.
 E        2. The writ petition out of which these appeals have arisen was
   instituted before the Agartala Bench of the Gauhati High Court. The
   writ petitioners, who are the respondents herein, are members of
   Scheduled Tribe(s) of the State ofTripura. They had contended that the
   Sale Notification dated 26.06.2012 issued by the appellant Bank under
 F the provisions ofthe Securitisation and Reconstruction of Financial Assets
   and Enforcement of Security Interest Act, 2002 (hereinafter referred to
   as the "Act of2002") was in infraction of Section 187 of the Tripura.
   Land Revenue and Land Reforms Act, 1960 (hereinafter referred to as
   the "TripuraAct of 1960") as under the TripuraAct there is a legislative
   embargo on the sale of mortgaged properties by the bank to any person
 G who is not a member ofa scheduled tribe. The auction purchasers in the
   present case happened to be the persons who are not members of any
   scheduled tribe.
            3. The High Court by the i1:1pugned order answered the writ petition
 H
    UCO BANK AND ANR. v. DIPAK DEBBARMA & ORS.                                   727
                [RANJAN GOGOi, J.]

in favour ofthe respondents/writ petitioners on the ground that the Tripura       A
Act of 1960 being included in the Ninth Schedule to the Constitution and,
therefore, enjoying the protection of Section 31-B of the Constitution,
would prevail over the Act of2002 so as to invalidate the sale Notification
dated 26.06.2012, the same being contrary to the provisions of Section
187 of the Tripura Act of 1960.                                                   B
        4. It will not require much appreciation or scrutiny to come to the
conclusion that the High Court was wholly incorrect in answering the
writ petition and striking down the sale Notification dated 26.06.2012 on
the above basis. Article 31-B of the Constitution, on the very face of
the language contained therein, is selfexplanatory and provides protection/       c
immunity to a legislation from challenge on the ground that it violates any
ofthe provisions of Part III of the Constitution. Inclusion of the Tripura
Act of 1960 in the Ninth Schedule by itself, would, therefore, not confer
immunity to the said legislation from being overridden by the provisions
ofa Parliamentary statute. This is a question, therefore, that this Court         D
will have to deal with notwithstanding the fact that the proceedings before
the High Court did not proceed on the aforesaid basis. We had, therefore,
permitted the learned counsels of both sides to address us on the core
question arising in the present appeals, namely, whether the Act of2002
insofar as it provides for sale ofimmovable properties offered as security        E
for a loan advanced, without any restriction as to the class or category of
buyers, would prevail notwithstanding the restrictive provision in this regard
under Section 187 of the TripuraAct of 1960.
       5. Shri Mukul Rohatgi, the learned Attorney General for India
appearing on behalfofthe appellant-Bank and Shri V. Giri, learned senior          F
counsel rep;esenting the auction-purchasers in the connected appeal have
contended that the purpose and object of the Act of20Q2 is to regulate
securitisation and reconstruction of financial assets and enforcement of
security interest and for matters connected therewith. On the other hand,
the purpose of the TripuraAct of 1960 is to consolidate the law relating          G
to land revenue and to provide for the acquisition of estates and for
certain other measures ofland reform. While the Act of2002 enacted
by the Union Pa~liament is referable to Entry 45 ofList I, the TripuraAct
can be traced to Entries 18 and 45 of the State List. Section 187 of the
TripuraAct puts an embargo on the sale ofhypothecated/ mortgaged
                                                                                  H
728               SUPREME COURT REPORTS                       f2016111 S.C.R.


A     properties by a bank to any person who is not a tribal. Therefore, the
      provisions of the TripuraAct of I 960 deal with a crucial aspect of the
      subject of banking. Reference in this regard is made to the provision of
      Section 13 of the Act of 2002 which permits the secured creditor to
      enforce the security interest without the intervention of the Court. The
B     sale of the property ofany person, offered to a bank as security for any
      financial facility, so as to recover the dues of the Bank is a part of the
      core banking activity of any bank. The dominant legislation so far as
      banking is concerned, in the present case, is the Act of2002 enacted by
      the Union Parliament and not the State Act. On the said basis, it is
c     contended that by virtue ofArticle 246(1) of the Constitution, the Act of
      2002, so far as sale of mortgaged properties by the bank is concerned,
      would prevail over Section 187 of the Tripura Act of 1960. The said
      provisions ofthe State Act must give way to the provisions ofthe Central
      Act, it is urged.
 D           6. Learned counsels for the respondents/writ petitioners, in reply,
      have contended that the provisions of both the statutes can co-exist and
      run parallelly without any conflict. It is urged that, in fact, there is no
      conflict between the two. Section 187 of the Tripura Act of 1960 does
      not prohibit or impose a complete embargo on the sale of mortgaged
 E    properties. Only when the borrower is a tribal the sale by the Bank has
      also to be to a tribal.
              7. Repugnancy or inconsistency between the provisions of
      Central and State enactments can occur in two situations. The first, in
      case of a Central and a State Act on any field of entry mentioned in List
 p    III of the Seventh Schedule (Concurrent List). To such a situation of
      repugnancy or inconsistency, the provisions of Article 254 of the
      Constitution would apply. Ifthere is such an inconsistency, Article 254(1)
      makes it very clear that the central Jaw will prevail subject, however, to
      the provisions ofArticle 254(2) and forther subject to proviso to Article
 G    254(2). The above position would b;! clear from the opinion rendered by
      a three Judges Bench of this Court in M/s Hoechst Pharmaceuticals
      Ltd. and Ors. vs. State ofBihar and Ors.I Para 67 of the aforesaid
      opinion which may be usefully noticed is in the following terms:


H     1
          (1983)4 sec 45
UCO BANK AND ANR. v. DIPAK DEBBARMA & ORS.                                729
            [RANJAN GOGOI, J.]

  "67. Article 254 of the Constitution makes provision first, as to        A
  what would happen in the case of conflict between a Central
  and State law with regard to the subjects enumerated in the
  Concurrent List, and secondly, for resolving such conflict.Article
  254(1) enunciates the normal rule that in the event of a conflict
  between a Union and a State law in the concurrent field, the             B
  former prevails over the latter. Clause (1) lays down that if a
  State law relating to a concurrent subject is 'repugnant' to a
  Union law relating to that subject, then, whether the Union law is
  prior or later in time, the Union law will prevail and the State law
  shall, to the extent of such repugnancy, be void. To the general
                                                                           c
  rule laid down in clause (1 ), clause (2) engrafts an exception viz.,
  that if the President assents to a State law which has been
  reserved for his consideration, it will prevail notwithstanding its
  repugnancy to an earlier law of the Union, both laws dealing
  with a concurrent subject. In such a case, the Central Act, will
  give way to the State Act only to the extent of inconsistency
                                                                           D
  between the two, and no more. In short, the result of obtaining
  the assent of the President to a State Act which is inconsistent
  with a previous Union law relating to a concurrent subject would
  be that the State Act will prevail in that State and override the
  provisions of the Central Act in their applicability to that State       E
  only. The predominance of the State law may however be taken
  away if Parliament legislates under the proviso to clause (2).
  The proviso to Article 254(2) empowers the Union Parliament to
  repeal or amend a repugnant State law, either directly, or by itself
  enacting a law repugnant to the State law with respect to the             F
   'same matter'. Even though the subsequent law made by
  Parliament does not expressly repeal a State law, even then, the
   State law will become void as soon as the subsequent law of
  Parliament creating repugnancy is made. A State law would be
   repugnant to the Union law when there is direct conflict between         G
  the two laws. Such repugnancy may also arise where both laws
   operate in the same field and the two cannot possibly stand
   together: See Zaverbhai Amaidas v. State ofBombay, (1955)
   I SCR 799; M Karunanidhi v. Union ofIndia, (1979) 3 SCR
   254 and T Barai v. Henry Ah Hoe, (1983) I SCC 177."
                                                                           H
730              SUPREME COURT REPORTS                          (2016] 11 S.C.R.



A            8. The above view has been reiterated in State of W.B. vs.
      Kesoram Industries Ltd. and Ors. 2 There are several other
      pronouncements ofthis Court on the aforesaid issue. The same, however,
      would not require any mention as any such reference would be only a
      multiplication of discussions on what appears to be a settled issue. In the
B     present case, however, the question before this Court is not one of
      repugnancy between a Central and a State law relatable to an Entry in
      List III (Concurrent List). No further attention to the above aspect of
      the matter would, therefore, be required.
             9. The second situation ofrepugnancy or inconsistency as in the
C     present case is between to a subsequent Central law (Act of 2002)
      covered by Entry 45 of List I and an earlier State law (Tripura Act of
      1960) relatable to Entries 18 and 45 of List II. How such a situation is to
      be resolved and answered and which legislation would have primacy is
      the moot question that arises for consideration in the present appeals.
D              10. Article 246 of the Constitution oflndia is in the following
      terms.
               "246. Subject-matter of laws made by Parliament and by
                the Legislatures of States:-

E               (1) Notwithstanding anything in clauses (2) and (3), Parliament
                has exclusive power to make laws with respect to any of the
                matters enumerated in List I in the Seventh Schedule (in this
                Constitution referred to as the 'Union List')
                (2) Notwithstanding anything in clause (3), Parliament and,
 F             subject to clause (1 ), the Legislature ofany State also, have power
               to make laws with respect to any of the matters enumerated in
               List III in the Seventh Schedule (in this Constitution referred to
               as the 'Concurrent List')
                (3) Subject to clauses (I) and (2), the Legislature ofany State
G               has exclusive power to make laws for such State or any part
               thereof with respect to any of the matters enumerated in List II
               .in "the Seventh Schedule (in this Constitution referred to as the
                'State List')

H     '(2004) IOSCC201
    UCO BANK AND ANR. v. DIPAK DEBBARMA & ORS.                                  731
                [RANJAN GOGOi, J.]

        (4) Parliament has powerto make laws with respect to any matter          A
        for any part of the territory oflndia not included (in a State)
        notwithstanding that such matter is a matter enumerated in the
        State List"
        11. In interpreting Artie le 246 regard must be had to the
constitutional scheme which visualises a federal structure giving full           B
autonomy to the Union Parliament as well as to the State legislatures in
their respective/demarcated fields of legislation. The problem may,
however, become a little more complex than what may seemingly appear
as the two legislations may very well be within the respective domains of
the concerned legislatures and, yet, there may be intrusion into areas           c
that fall beyond the assigned fields oflegislation. In such a situation It
will be plain duty of the Constitutional Court to see ifthe conflict can be
resolved by acknowledging the mutual existence ofthe two legislations.
Ifthat is not possible, then by virtue of the provisions ofArticle 246(1 ),
the Parliamentary legislation would prevail and the State legislation            D
will have to give way notwithstanding the fact that the State legislation is
within the demarcated field (List II). This is the principle of federal
supremacy which Article 246 of the Constitution embodies. The said
principle will, however, prevail provided the pre-condition exists, namely,
the Parliamentary legislation is the dominant legislation and the State           E
 legislation, though within its own field, has the effect of encroaching on a
vital sphere of the subject or entry to which the dominant legislation is
referable. This is the principle that is discernible from the Constitution
Bench judgment of this Court in State of West Bengal and Ors. vs.
Committee for Protection of Democratic Rights, West Bengal and
                                                                                  F
Ors. 3 Paragraphs 25, 26 and 27 which illuminates the issue may be
conveniently extracted below.
        "25. The non obstante clause in Article 246( 1) contemplates
        the predominance or supremacy of the Union Legislature. This
        power is not encumbered by anything contained in clauses (2)              G
        and (3) for these clauses themselves are expressly limited and
        made subject to the non obstante clause in Article 246(1 ). The
        State Legislature has exclusive power to make laws for such
        State or any part thereof with respect to any of the matters
'(2010) 3 sec s11                                                                H
732             SUPREME COURT REPORTS                          r10161 11 S.C.R.


A             enumerated in List II in the Seventh Schedule and it also has the
              power to make laws with respect to any matters enumerated in
              List III (Concurrent List). The exclusive power of the State
              Legislature to legislate with respect to any of the matters
              enumerated in List II has to be exercised subject to clause (1)
B             i.e. the exclusive powerofParliamentto legislate with respect to
              matters enumerated in List l. As a consequence, ifthere is a
              conflict between an entry in List I and an entry in List II, which
              is not capable of reconciliation, the power of Parliament to
              legislate with respect to a matter enumerated in List II must
c             supersede pro tanto the exercise ofpower of the State Legislature.
              26. Both Parliament and the State Legislature have concurrent
              powers of legislation with respect to any of the matters
              enumerated in List Ill. The words "notwithstanding anything
              contained in clauses (2) and (3)" in Article 246(1) and the words
D             "subject to clauses (I) and (2)" in Article 246(3) lay down the
              principle of federal supremacy viz. that in case of inevitable
              conflict between the Union and State powers, the Union power
              as enumerated in List I shall prevail over the State power as
              enumerated in Lists II and Hf and in case of an overlapping
 E            between Lists II and III, the latter shall prevail.
              27. Though, undoubtedly, the Constitution exhibits supremacy of
              Parliament over the State Legislatures, yet the principle offederal
              supremacy laid down in Article 246 of the Constitution cannot be
              resorted to unless there is an irreconcilable direct conflict between
 F            the entries in the Union and the State Lists. Thus, there is no
              quarrel with the broad proposition that under the Constitution
              there is a clear demarcation oflegislative powers between the
              Union and the States and they have to confine themselves within
              the field entrusted to them. It may also be borne in mind that the
G             function ofthe lists is not to confer powers; they merely demarcate
              the legislative field ... '. .................... "
              12. Equally illuminating is the view available in the opinion ofthis
      Court rendered in re. Special Reference No. 1 of 2001\ which is
      reproduced below.
H     • (2004) 4 sec 489
UCO BANK AND ANR. v. DI PAK DEBBARMA & ORS.                                733
            [RANJAN GOGOI,J.]

  "13. The Constitution ofTndia delineates the contours of the              A
  powers enjoyed by the State Legislature and Parliament in respect
  of various subjects enumerated in the Seventh Schedule. The
  rules relating to distribution of powers are to be gathered from
  the various provisions contained in Part XI and the legislative
  heads mentioned in the three lists ofthe Schedule. The legislative        B
  powers of both the Union and State Legislatures are given in
  precise terms. Entries in the lists are themselves not powers of
  legislation, but fields oflegislation. However, an entry in one list
  cannot be so interpreted as to make it cancel or obi iterate another
  entry or make another entry meaningless. In case of apparent              c
  conflict, it is the duty of the court to iron out the crease and avoid
  conflict by reconciling the conflict. If any entry overlaps or is in
  apparent conflict with another entry, every attempt shall be made
  to harmonise the same.
  14. When the question arose about reconciling Entry 45 ofList I,          D
  duties of excise, and Entry 18 of List II, taxes on the sale of
  goods, ofthe Government oflndiaAct, 1935, Sir Maurice Gwyer,
  C.J. in Central Provinces and Berar Act No. XIV of 1938, Jn
  re, (1939) FCR 18, at pp. 42-44 observed:
    "A grant ofthe power in general terms, standing by itself, would        E
    no doubt be construed in the wider sense, but it may be qualified
    by other express provisions in the same enactment, by the
    implications of the context, and even by considerations arising
    out of what appears to be the general scheme of the Act."
  It was further observed:                                                   F

    "An endeavour must be made to solve it, as the Judicial
    Committee have said, by having recourse to the context and
    scheme of the Act, and a reconciliation attempted between
    two apparently conflictingjurisdictions by reading the two entries
                                                                            G
    together and by interpreting, and, where necessary modifying
    the language of the one by that of the other. If indeed such a
    reconciliation should prove impossible, then, and only then, will
    the non obstante clause operate and the federal power prevail;"

                                                                            H
734             SUPREME COURT REPORTS                           [2016) 11 S.C.R.


A            15. Although Parliament cannot legislate on any of the entries in
             the State List, it may do so incidentally while essentially dealing
             with the subject coming within the purview of the entry in the
             Union List. Conversely, the State Legislature also while making
             legislation may incidentally trench upon the subject covered in
B            the Union List. Such incidental encroachment in either event need
             not make the legislation ultra vires the Constitution. The doctrine
             of pith and substance is sometimes invoked to find out the nature
             and content of the legislation. However, when there is an
             irreconcilable conflict between the two legislations, the Central
c            legislation shall prevail. However, every attempt would be made
             to reconcile the conflict."
          13. The federal structure under the constitutional scheme can
  also workto nullify an incidental encroachment made by the Parliamentary
  legislation on a subject of a State legislation where the dominant legislation
D is the State legislation. An attempt to keep the aforesaid constitutional
  balance intact and give a limited operation to the doctrine of federal
  supremacy can be discerned in the concurringjudgment of Ruma Pal, J.
  in ITC Ltd. vs. Agricultural Produce Market Committee and
  Ors. 5, wherein after quoting the observations ofthis Court in the case of
E S.R. Bomai vs. Union oflndia 6 (para 276), the learned Judge has
  gone to observe as follows (para 94 of the report):
               · "276. The fact that under the scheme of our Constitution,
                greater power is conferred upon the Centre vis-a-vis the States
                does not mean that States are mere appendages of the Centre.
 F              Within the sphere allotted to them, States are supreme. The
                Centre cannot tamper with their powers. More particularly,
                the courts should not adopt an approach, an interpretation, which
                has the effect of or tends to have the effect of whittling down
                the powers reserved to the States.
 G           94. Although Parliament cannot legislate on any ofthe entries in
             the State List, it may do so incidentally while essentially legislating
             within the entries under the Union List. Conversely, the State
             Legislatures may encroach on the Union List, when such an
      ' (2002) 9 sec 232
H     6(1994)3SCCI
       UCO BANK AND ANR. v. DIPAK DEBBARMA & ORS.                             735
                   [RANJAN GOGOi, J.]

          encroachment is merely ancillary to an exercise of power             A
          intrinsically under the State List. The fact of encroachment does
          not affect the vires of the law even as regards the area of
          encroachment. [A.S. Krish.na vs. State of Madras, AIR I 957
          SC 297; Chaturbhai M. Pate.I vs. Union oflndia, (I 960) 2 SCR
          362; State ofRajasthan vs. G Chawla, AIR 1959 SC 544; lshwari        B
          Khetan Sugar Mills (P) Ltd. vs. State ofU.P., (1980) 4 SCC
          136]. This principle commonly known as the doctrine of pith and
          substance, does not amount to an extension of the legislative
          fields. Therefore, such incidental encroachment in either event
          does not deprive the State Legislature ~n the first case or          c
          Parliament in the second, of their exclusive powers under the
          entry so encroached upon. In the event the incidental
          encroachment conflicts with legislation actually enacted by the
          dominant power, the dominant legislation will prevail."
       14. The aforesaid view in the concurringjudgment of Ruma Pal,           D
J. in ITC Ltd. vs. Agricultural Produce Market Committee and
Ors. (supra), seems to have been echoed in a recent pronouncement of
this Court in Vishal N. Kaisaria vs. Bank oflndia & Ors. 7 , wherein
this Court had held that the provisions ofthe Act of2002 will not have an
overriding effect on the provisions of the State Rent Control Acts.            E
        15. In the present case the conflict between the Central and the
State Act is on account of an apparent overstepping by the provisions of
the State Act dealing with land reform into an area of banking covered
by the Central Act. The test, therefore, would be to find out as to which
is the dominant legislation having regard the area of encroachment.             F
        16. The provisions of the Act of2002 enable the bank to take
possession of any property where a security interest has been created in
its favour. Specifically, Section 13 of the 2002 Act enables the bank to
take possession of and sell such property to any person to realise its
dues. The purchaser ofsuch property acquires a clear title to the property     G
sold, subject to compliance with the requirements prescribed.
      17. Section 187 of the TripuraAct of 1960, on the other hand,
prohibits the bank from transferring the property which has been
1
    {2016) 3 sec 762                                                           H
736             SUPREME COURT REPORTS                          [2016] II S.C.R.


A     mortgaged by a member of a scheduled tribe to any person other than a
      memberof a scheduled tribe. This is a clear restriction on what is permitted
      by the Act of2002 for the realisation of amounts due to the bank.
         18. The Act of2002 is relatable to the Entry of banking which is
  included in List I of the Seventh Schedule. Sale of mortgaged property
B by a bank is an inseparable and integral part of the business of banking.
  The object of the State Act, as already noted, is an attempt to consolidate
  the land revenue law in the State and also to provide measures ofagrarian
  reforms. The field of encroachment made by the State legislature is in
  the area of banking. So long there did not exist any parallel Central Act
C dealing with sale of secured assets and referable to Entry 45 of List I,
  the State Act, including Section 187, operated validly. However, the
  moment Parliament stepped in by enacting such a law traceable to Entry
  45 and dealing exclusively with activities relating to sale ofsecured assets,
  the State law, to the extent that it is inconsistent with the Act of2002,
D must give way. The dominant legislation being the Parliamentary
  legislation, the provisions of the Tri pura Act of I 960, pro tanto, (Section
  187) would be invalid. It is the provisions of the Act of2002, which do
  not contain any embargo on the category ofpersons to whom mortgaged
  property can be sold by the bank for realisation of its dues that will
E prevail over the provisions contained in Section 187 ofthe TripuraAct of
  1960.
              19. The decision of this Court in Central Bank oflndia vs.
      State ofKerala and Ors.8 , holding that the provisions of the Bombay
      Sales Tax Act, 1959 and the Kerala General Sales Tax Act, 1963 providing
 F    for a first charge on the property of the person liable to pay sales tax, in
      favour of the State, is not inconsistent with the provisions contained in
      the Recovery of Debts Due to Banks and Financial Institutions, Act
      1993 (for short the "DRT Act") and also the Act of 2002 must be
      understood by noticing the absence ofany specific provision in either of
0     the Central enactments containing a similar/parallel provision of a first
      charge in favour of the bank. The judgment of this Court holding the
      State enactments to be valid and the Central enactments not to have any
      overriding effect, proceeds on the said basis i.e. absence of any provision


H     ' (2009) 4 sec 94
    UCO BANK AND ANR. v. DIPAK DEBBARMA & ORS.                                    737
                [RANJAN GOGOI, J.]

creating a first charge in favour of the bank in either of the Central             A
enactments.
       20. The High Court in the judgment under challenge has also
taken the view that the impugned sale Notification dated 26.06.2012 is
invalid for infraction of Rule 5 and Rule 8(5) of the Security Interest
(Enforcement) Rules, 2002, in as much as the bank did not obtain any               B
valuation report ofthe property before resorting to the impugned auction
sale. The Rules in question read as follows.
       "5. Valuation of movable secured assets.-
       After taking possession under sub-rule (1) ofrule 4 and in any              c
       case before sale, the authorised officer shall obtain the estimated
       value ofthe movable secured assets and thereafter, if considered
       necessary, fix in consultation with the secured creditor, the reserve
       price of the assets to be sold in realisation of the dues of the
       secured creditor."                                                          D
       "8. Sale ofimmovable secured assets.-
        (5) Before effecting sale of the immovable property referred to
        in sub-rule (1) ofrule 9, the authorised officer shall obtain valuation
        of the property from an approved valuer and in consultation with
        the secured creditor, fix the reserve price of the property and            E
        may sell the whole or any part of such immovable secured asset
        by any ofthe following methods:
       21. Our attention had been specifically drawn to the stand ofthe
appellant-Bank before the High Court in the counter filed (paragraph
                                                                                   F
20). Taking into account the averments made in the said affidavit, we
find that the sale proclamation had mentioned a reserve price of Rs. 275
lacs and the property had been actually sold by auction at Rs. 416 lacs.
That apart, the valuation report dated 14.06.2012 of the approved valuer
valuing the property at Rs. 341.15 lacs has also been placed before us by
way of an additional document which we are inclined to take on record.             G
The requirements under Rule 5 and Rule 8(5) have, therefore, been
complied with and the sale proclamation and the sale effected pursuant
thereto cannot be invalidated on the above ground.

                                                                                   H
738                SUPREME COURT REPORTS                 [20I6] II S.C.R.


A          22. For the aforesaid reasons, the impugned order passed by the
      High Court has to be set aside which we hereby do. The appeals are
      consequently allowed. There will, however, be no order as to costs.


      Ankit Gyan                                             Appeals allowed.