The SARFAESI Act takes precedence over the BUDS Act, allowing for the registration of sale certificates despite ongoing investigations under the latter.

JUDGMENT :

The petitioner, a Non-Banking Financial Company, has approached this Court seeking a writ of mandamus directing the 2^nd respondent to register Ext.P3 sale certificate issued by it in terms of the provisions contained in the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the SARFAESI Act) and consequently for a direction to the revenue authorities to carry out the mutation of the property covered by Ext.P3 Sale Certificate.

The brief facts:-

2. One Rajeev A.R and one Sunitha Kumari S.R (the borrowers) availed loans from the petitioner-financial institution by mortgaging all pieces and parcels of the land having an extent of 01.69 Ares in Re-Survey No. 4/149 along with a building bearing No. TC 69/123(2) of Manacaud Village in Thiruvananthapuram Taluk. The borrowers defaulted on loan repayment, prompting the petitioner to initiate proceedings under the SARFAESI Act. Physical possession of the property was taken on 05.12.2023. Thereafter, the property was put up for auction and sold to the 3^rd respondent for a sum of Rs. 56,10,443/-. However, when the 3^rd respondent attempted to register the sale certificate, it was informed that the 4^th respondent has issued a communication (viz Communication No. 253/GL/CB-EOW/TVPM Unit/2023) dated 27.02.2023 to the 1^st respondent, restraining the transfer of the property. According to the 4^th respondent, FIRs were registered against the aforesaid Rajeev A.R as FIR No. 1266/2022 of Vanchiyoor Police Station and FIR No. 81/2023 dated 31.01.2023 was registered by the State Crime Branch for misappropriating amounts of the BSNL Engineers Co-operative Society. During the course of the investigation, certain offences under the Banning of Unregulated Deposit Schemes Act, 2019 (hereinafter referred to as the ‘BUDS Act’) were also incorporated.

3. Sri. Paulochan Antony P., the learned counsel appearing for the petitioner, submits that the proceedings under the BUDS Act have no bearing on those initiated under the SARFAESI Act. He submits that Sections 12 and 13 of the BUDS Act start with the expression ‘Save as otherwise provided in the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002) or the Insolvency and Bankruptcy Code, 2016 (31 of 2016)’, and therefore, the proceedings under the SARFAESI Act and the Insolvency and Bankruptcy Code (IBC) are saved from the operation of the provisions in the BUDS Act. Therefore, it is his submission that Ext.P4 communication of the 4^th respondent cannot interfere with the proceedings initiated under the SARFAESI Act. He also refers to the judgment of the Supreme Court in Central Bureau of Investigation v. State of Bihar and Others ; 2010 (5) SCC 1 in support of his contention.

4. Sri. Appu P.S, the learned Government Pleader appearing for official respondents No. 1, 2 and 4, opposes the grant of any relief to the petitioner. He submits that Section 8 of the BUDS Act constitutes a Designated Court exclusively for trying the cases under the BUDS Act while Section 18(1)(c) empowers the competent authority to take possession of any asset belonging to the deposit taker and sell, transfer or release the attached asset. He further contends that any person aggrieved by an order of the Designated Court can prefer an appeal before the High Court within the stipulated time under Section 19 of the Act. Therefore, considering the availability of an alternative remedy, the discretionary jurisdiction under Article 226 of the Constitution of India may not be invoked. Moreover, he also refers to Sections 5, 12 and 13 of the BUDS Act to contend that depositors have a right to restitution and the order of provisional attachment shall have preced