Interesting questions on the interplay between The Sick Industrial Companies (Special Provisions) Act, 1985 (“SICA“) and The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act“) have been answered in Madras Petrochem Ltd. v. BIFR, [Civil Appeal Nos. 614-615 of 2016] by Nariman J.
My Lord, Is it true that after the enactment of SARFAESI Act because of the presence of Section 22(1) of SICA, none of the measures taken by the secured creditors under Section 13 of SARFAESI Act can be proceeded with because of the bar contained in Section 22(1) of SICA?
“SICA prevails in all situations where there are earlier enactments with non obstante clauses similar to SICA… Where there are later enactments with similar non obstante clauses, SICA has been held to prevail only in a situation where the reach of the non obstante clause in the later Act is limited – such as in the case of The Arbitration and Conciliation Act, 1996 – or in the case of the later Act expressly yielding to SICA, as in the case of the Recovery of Debts Due To Banks And Financial Institutions Act, 1993. Where such is not the case, as in the case of The Special Courts Act, 1992, it is The Special Courts Act, 1992 which was held to prevail over SICA… Notwithstanding the non obstante clauses in Section 22(1) and (4), read with Section 32, Section 22 of SICA will have to give way to the measures taken under SARFAESI Act more particularly referred to in Section 13 of the said Act.”