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2017 (9) TMI 1266 - SC - Indian LawsSimultaneous proceedings of arbitration proceedings along with the SARFAESI proceedings - Whether resort can be had to Section 13 of the SARFAESI Act in respect of debts which have arisen out of a loan agreement/mortgage created prior to the application of the SARFAESI Act to the respondent? - lender invoking the SARFAESI Act provision where its notification as financial institution under Section 2(1)(m) has been issued after the account became an NPA under Section 2(1)(o) of the said Act? - Held that:- SARFAESI proceedings are in the nature of enforcement proceedings, while arbitration is an adjudicatory process. In the event that the secured assets are insufficient to satisfy the debts, the secured creditor can proceed against other assets in execution against the debtor, after determination of the pending outstanding amount by a competent forum. SARFAESI proceedings and arbitration proceedings, thus, can go hand in hand. The date on which a debt is declared as an NPA would again have no impact. We are, thus, of the view that the provisions of the SARFAESI Act would become applicable qua all debts owing and live when the Act became applicable to the respondent in terms of the parameters contended by learned senior counsel for the respondent and enlisted at serial Nos. i to iv in para 18. We are, thus, of the view that the appeal is completely devoid of merit, and is only an endeavour to prolong the ultimate “date of judgment” for the appellants to meet their obligations.
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