JUDGMENT :

Kamal Khata, J.

1) By this Appeal, the Appellant seeks to set aside the impugned Order dated 8th March, 2023 passed by the Special Judge assigned MPID matters at Bombay in Miscellaneous Application No.500 of 2019 in MPID Special Case No. 1 of 2014 in C.R. No. 89 of 2013.

2) By an Application, the Appellant had sought permission to auction and sell the duly mortgage properties of the Respondent No. 4 as per the provisions of the SARFAESI Act. The said Application was rejected. The present Appeal arises from that rejection.

3) The Appellant had sanctioned certain credit facilities to the Respondent No.4 from time to time and to secure the same, certain documents were executed in favour of the Appellant including Mortgage Deeds dated 1st December, 2009, 3rd March, 2010, 12th March, 2010, 2nd July, 2010, 6th August, 2010, 17th January, 2011, 9th May, 2011, 10th May, 2012.

4) In view of the repeated defaults by Respondent No.4, it was classified as Non-Performing Asset (NPA) on 27th February, 2015 in terms of the RBI Prudential Guidelines on Income Recognition and Asset Classification. Pursuant to this classification, the Appellant issued a Demand Notice to the Respondent No.4 and its guarantors under Section 13(2) of the SARFAESI Act 2002, dated 4th March, 2015. Despite the receipt of the notice, the Respondent Nos. 4 to 8 failed to comply with the requisitions and discharge their liabilities within the stipulated period of 60 days. The Appellant Bank took symbolic possession of all the secured assets under Section 13(4) of the SARFAESI Act 2002.

5) The Respondent Nos.4 to 8 challenged the action of the Appellant before the Debt Recovery Tribunal, which came to be dismissed on 31st January 2017.

6) In the meantime, the Respondent No.1 had issued a notice dated 8th January, 2016, under reference OW 31/EOW/Unit-V/CR No. 89-13/2016 to the Appellant informing that, the EOW, Mumbai was investigating an offence in the NSEL Scam under Sections 465, 467, 468, 471, 474, 477(A), 120(B) IPC read with Sections 3 and 4 of the MPID Act 1999.

7) Meanwhile on 19th January 2016, the Respondent No. 3 filed Misc. Application No. 28 of 2016 in MPID Case No.1 of 2014 seeking a restraint order against the Appellant from taking physical possession of the properties and selling them under the provisions of the SARFAESI Act.

8) As a counter, on 16th February 2016, the Appellant preferred a Misc. Application bearing No. 66 of 2016 before the Trial Court for lifting attachment and permitting sale of the mortgaged properties, formally possessed by the Appellant.

9) Upon hearing both Applications, the Trial Court vide its order dated 15th September 2017, partly allowed the Misc. Application No. 66 of 2016 preferred by the Appellant and consequently the Misc. Application of the Respondent No. 3 stood disposed of.

10) Notably, the Government of Maharashtra, Home Department had vide its Notifications dated 22nd June 2015, 17th March 2016 and 6th April 2017, provisionally attached the properties mortgaged to the Appellant.

11) Despite being fully aware that the said properties were mortgaged to the Appellant the Respondent No. 2 failed to make the Appellant a party to its Application.

12) Upon such publication, the Respondent No. 2 – the Competent Authority moved Misc. Application No. 1512 of 2017 to confirm the said attachment in respect of the aforesaid properties.

13) The trial Court rejected the Application by the Appellant, as well as the Review preferred therefrom on the ground that the MPID Act (which is a State Statute) would prevail over the SARFAESI Act (which is the Union Statute). Consequently, the present Appeal came to be preferred.

14) Dr. Saraf representing the Appellants submits that, the learned Judge of trial Court has committed a serious error of law in rejecting the Appellants Application. He submitted that the trial Court erred in observing that, the Appellant had failed to obey the Order dated 15th September, 2017, which directed the Appellant