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2015 (4) TMI 1197 - HIGH COURT OF ANDHRA PRADESHViolation of the provisions of SICA - seeking to take possession of the immovable properties of the petitioner company pursuant to the notice issued under the provisions of SICA Act - Held that:- The present Writ petition is, barred by the principles of res-judicata and is liable to be dismissed on this short ground. The present Writ Petition has been filed only to drag on proceedings, again prevent the respondent-bank from taking possession of their immoveable properties, and in realising even a part of the mounting debt by putting the secured assets to sale. The present Writ Petition is clearly an abuse of process of Court, and is liable to be dismissed as such. Though the Writ Petition is liable to be dismissed on the aforesaid two grounds, we shall examine the contentions urged by Sri C.B.Rammohan Reddy, Learned Counsel for the petitioner, on the scope of the relevant provisions of SICA and the SARFAESI Act, as these issues would frequently arise. As the SARFAESI Act came into force on 21.06.2002 the starting point for the third proviso, to Section 15(1) of SICA, to be attracted is on or after 21.06.2002. If proceedings were pending before the BIFR on 21.06.2002, and on the conditions stipulated in the third proviso being satisfied, the reference stood abated. As the petitioners made a reference to the BIFR, under Section 15(1) of SICA, by their application dated 10.10.2013, the question of pendency of a reference before the BIFR, on or after the commencement of the SARFAESI Act, does not arise and the third proviso to Section 15(1) of SICA has no application. The SARFAESI Act is concerned mainly with the recovery of the debt, by banks and financial institutions, without recourse to any court or tribunal. It permits securitisation of the debt and aims at minimising non-performing assets. The SICA, a pre -existing legislation, provides for timely detection of sick and potentially sick companies owning industrial undertakings and the speedy determination by the BIFR of remedial and ameliorative measures, and enforcement of such measures. The different purposes of the two Acts must be kept in mind while examining the inter -play between the provisions of the two and eschew, if permissible, a readiness to hold that their provisions overlap or tread over each other While interpreting a provision containing a non-obstante clause it should first be ascertained what the enacting part of the Section provides, on a fair construction of the words used according to their natural and ordinary meaning, and the non-obstante clause is to be understood as operating to set aside as no longer valid anything contained in any other law which is inconsistent with the Section containing the non-obstante clause. While Section 35 of the SARFAESI Act gives over-riding effect of that Act over other laws which are inconsistent therewith, the second and third provisos, which were inserted into the SICA in the year 2002, by the SARFAESI Act itself, cannot be construed as being inconsistent with the SARFAESI Act. On a reading of Sections 35 and 37 of the SARFAESI Act together it is clear that, in the event of any of the provisions of the SICA not being inconsistent with the provisions of the SARFAESI Act, the application of both the Acts, namely, the SARFAESI Act and the SICA would complement each other. Since, however, the second proviso, divesting the jurisdiction of the BIFR, has been incorporated in Section 15(1) of SICA itself, in view of Section 41 of the SARFAESI Act and the Schedule thereto, a harmonious construction of the provisions of SICA and the SARFEASI Act, especially where the second proviso to Section 15(1) of SICA is attracted, does not arise. From the proceedings of the BIFR dated 21.01.2014, it is evident that the assets of the petitioner, mortgaged to Karur Vysya Bank Ltd. and Axis Bank Ltd were acquired from them by IARC (a securitisation company). The requirement of Section 5(1) of the SARFAESI Act was, therefore, satisfied. Consequently the second proviso to Section 15(1) was attracted, and the petitioner was prohibited from making a reference to the BIFR by their letter dated 10.10.2013, more than a decade after the SARFAESI Act, 2002 came into force on 21.06.2002. The pre-condition for the BIFR to cause an enquiry under Section 16 is, a reference made to it, by the board of directors of a sick industrial company, under Section 15(1) of SICA and its first proviso. As no reference could have been made by the petitioner to the BIFR, in view of the embargo placed on it by the second proviso to Section 15(1) of SICA, the non-obstante clause under Section 22(1) of SICA has no application, and neither the securitisation company nor the first respondent-bank, are obligated to obtain the consent of BIFR to realise the security in accordance with the provisions of the SARFAESI Act and the Rules made thereunder. It is no function of the Court to add words to the second proviso to Section 15(1) of SICA on the premise that it would, otherwise, defeat the objects of SICA. Hardship if any, which may possibly result, is for the legislative branch of the State to consider. In view of the bar under the second proviso to Section 15(1) of SICA, the very reference to the BIFR is without jurisdiction, and consequently the subsequent act of registration of the reference as Case No.89 of 2013, or commencement of the enquiry under Section 16(1) of SICA or for that matter remedial measures being taken under Section 17 to 19 of SICA, by the BIFR are also without jurisdiction and a nullity. Once the jurisdiction of the BIFR has been divested by the mandatory impact of the second proviso to Section 15(1), the BIFR cannot pass any orders under SICA. As the invalidity of proceedings before a Court/Tribunal, which suffer from inherent lack of jurisdiction, can be set up even in collateral proceedings it would suffice for this Court to declare the reference made by the petitioner to the BIFR, by their letter dated 10.10.2013, and registration of the reference as Case No.89 of 2013, as a nullity. As these proceedings are void, it is enough for the Court to declare it so, and it collapses automatically. Viewed from any angle, the petitioner is not entitled to the relief sought for. The Writ Petition must be, and is accordingly, dismissed.
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