Court dismisses writ petition, upholding the SARFAESI Act's supremacy in cases involving mental disability property without need for Local Level Committee approval.
In a landmark judgment, the Kerala High Court has reinforced the supremacy of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) over the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (National Trust Act) in cases involving property proceedings against individuals with mental disabilities. The ruling was delivered by Justice P.V. Balakrishnan in the case of P.A. Banaseer Banu v. Canara Bank.
The case involved a writ petition filed by P.A. Banaseer Banu and her daughter, who is mentally challenged, challenging the proceedings initiated by Canara Bank under the SARFAESI Act. The petitioners contended that the bank could not proceed with the sale of their property without obtaining prior permission from the Local Level Committee constituted under the National Trust Act.
The Court, however, dismissed the writ petition, stating that the SARFAESI Act prevails over the National Trust Act when conflicts arise between these two special enactments, both of which contain non-obstante clauses. The Court clarified that statutory authorities do not require prior permission from the Local Level Committee to proceed against the property of a person with mental disabilities under the SARFAESI Act.
Moreover, the judgment highlighted that writ petitions challenging SARFAESI proceedings are not maintainable due to the existence of an alternative and efficacious remedy before the Debt Recovery Tribunal (DRT). Citing precedents set by the Supreme Court, the Court reiterated that individuals aggrieved by SARFAESI proceedings should seek redressal through the DRT.
This decision underscores the judicial preference for statutory mechanisms over writ jurisdiction in financial recovery matters, ensuring that the SARFAESI Act's objectives are not hindered by procedural delays or conflicting statutory interpretations.
Bottom line:-
Proceedings initiated under the SARFAESI Act against the property of a person with mental disability do not require prior permission from the Local Level Committee constituted under the National Trust Act, as the SARFAESI Act prevails over the National Trust Act in case of conflict. Additionally, writ petitions challenging SARFAESI proceedings are not maintainable due to the availability of an alternative remedy before the DRT.
Statutory provision(s): Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999
P.A. Banaseer Banu v. Canara Bank, (Kerala) : Law Finder Doc id # 2925263
