Central Board of Trustees, Employees Provident Fund v. IndusInd Bank Ltd. & Ors.

2002. He would submit that considering the language of Section 11, Statement of Objects and Reasons of EPF Act, 1952 and its legislative intent, the EPF Act, 1952 was enacted for the benefit of workmen and employees as a beneficial legislation, hence any default in payment of Provident Fund dues would render priority in recovery and first charge over the assets of the defaulting employer i.e. Respondent No.2 – Company in the present case. Hence he would contend that all notices and orders issued and passed by Petitioner are valid in law, justified as per Section 11(2) of EPF Act, 1952 and carried out to the last letter. He 9 of 32 would urge me to therefore allow the present Petition in order to recover Provident Fund dues from Respondent No.2 – Company in priority over the claim of Respondent No.1 – Bank in order to provide relief to the affected employees.

4.6. In support of his above submissions, he has referred to and relied upon the following decisions of the Supreme Court and High Courts to contend that present Petition deserves to be allowed in view of the above ratio cited in the following cases:- (1) Maharashtra State Co-operative Bank Limited V/s Assistant Provident Fund Commissioner and Others[1]; (2) Indian Overseas Bank N. Paripatti Branch, N. Paripatti, Dindigul District, Rep. by its Principal Officer / Manager… V/s The Employees Provident Fund Organization, Regional Office, Chokkikulam, Madurai -2 and Others[2]; (3) UCO Bank V/s Employees Provident Fund Organization and Others 3; (4) Alchemist Asset Reconstruction Company Ltd V/s The Regional Provident Fund Commissioner – II 4; (5) Employees Provident Fund Commissioner V/s Offical Liquidator of Esskay Pharmaceuticals Limited 5; (6) Indian Overseas Bank V/s Employees Provident Fund Organization 6 and (7) Recovery Officer and Provident Fund Commissioner V/s

4.7. He would draw my attention to the additional affidavit dated 08.12.2025 placing reliance on a recent decision of the Supreme Court dated 20.11.2025 in the case of Jalgaon District Cooperative Bank V/s. State of Maharashtra[8] and contends that in paragraph No. 25 the Supreme Court has held as under:-

5. Mr. Samanataray, learned Advocate for Respondent No.1 – Bank would oppose the Petition and submit that dues owed to secured creditors under SARFAESI Act, 2002 of any entity prima facie takes precedence over any and all other debts owed by that entity to any other person.

5.1. He would submit that present Petition is not maintainable on the ground that all Respondents are private parties and none of the 7 (2002) 2 KLT 723

8 Special Leave Petition (C) No.27740 of 2011 decided on 20/11/2025 11 of 32 Respondents carry out any public function. He would submit that Petitioner has wrongly invoked Writ jurisdiction of this Court. He would submit that it is trite law that Writ jurisdiction of High Court cannot be invoked against private financial institutions which do not perform any public function and that an alternate efficacious remedy under Section 17 of the SARFAESI Act, 2002 needs to be exhausted by Petitioner before approaching this Court. He would submit that in commercial law, if an effective and alternate remedy is created by statute, such remedy must be exhausted before approaching this Court. On merits he would submit that Petitioner ought to have approached the Debts Recovery Tribunal under Section 17 of SARFAESI Act, 2002 since Petitioner seeks to challenge steps taken by Respondent No.1 – Bank to recover its dues by sale of Respondent No.2’s secured assets in priority to satisfy its claim. He would submit that Section 34 of SARFAESI Act, 2002 bars jurisdiction of Civil Court from entertaining matters which are to be heard by the Debts Recovery Tribunal and Debts Recovery Appellate Tribunal. He would submit that measures taken by secured creditor cannot be enforced before Civil Court and instead recourse to Debts Recovery Tribunal or Debts Recovery Appellate Tribunal has to be taken to determine if there is any illegality in the measures adopted / taken by the secured creditor. He would submit that any legislation enacted subsequently overrides the earlier legislation and in the present case although both Acts are enacted by 12 of 32 the Central Government, EPF Act, 1952 was enacted well before the SARFAESI Act, 2002. Hence SARFAESI, Act 2002 becomes a subsequent legislation and prevails over the EPF Act, 1952 and Section 26E of SARFAESI Act 2002 would therefore prevail over Section 11 of the EPF Act, 1952.

5.2. He would submit that Petitioner seeks to restrain Respondent No.1 – Bank from taking physical possession of the secured assets mortgaged to it and prevent implementation of Order dated 18.09.2023 passed by the Additional Chief Metropolitan Magistrate hence present Petition is not maintainable before the Single Judge bench as Rule 18(3) of Bombay High Court Appellate Side Rules, 1960 bars this Court from hearing the present Petition. Instead the same is to be placed and heard before Division Bench of this Court for the reliefs prayed for in this Petition.

5.3. He would submit that Section 26E of SARFAESI Act, 2002 gives priority to secured creditors who have registered their charge / security interest and such priority is given over debts owed and payable to Central and State Government agencies or any local authority and more specifically when the Petitioners have not even registered their charge. He would submit that if a secured creditor registers his charge with Central Registry of Securitisation Asset Reconstruction and Security Interest of India (for short “CERSAI”) the dues of secured 13 of 32 creditor will have priority over other dues including those owed to government agencies. He would submit that Respondent No.1 – Bank registered its charge over Respondent No.2 – Company’s assets with CERSAI on 07.05.2020 well before Order dated 25.04.2022 was passed under Section 7A of EPF Act, 1952 by Petitioner. He would submit that Petitioner did not register its charge over Respondent No.2 – Company’s assets and hence cannot claim right, title and interest over the same merely on the strength of the Order passed under Section 7A of EPF Act, 1952. He would submit that Petitioner claims that Directors of Respondent No.2 – Company fraudulently sold various assets through their Power of Attorney and hence it is open for Petitioner to challenge sale of aforementioned assets and have their sale set aside in order to satisfy its dues, however it is seen that Petitioner has taken no such steps. He would submit that on the basis of above submissions, present Petition deserves to be dismissed.

5.4. In support of his above submissions, he has referred to and Courts to contend that present Petition deserves to be dismissed in view of the ratio laid down in the following cases:- (1) Phoenix ARC Private Limited V/s. Vishwa Bharti Vidya Mandir & Others.9;

14 of 32 (2) South Indian Bank Limited & Others V/s Naveen Mathew Philip & Another 10; (3) Jagdish Singh V/s. Heeralal & Others11; (4) Gujrat State Civil Supplies Corporation Limited V/s. Mahakali Foods Private Limited.12; and (5) Janta Sahakari Bank Limited & Another V/s. Joint Commissioner of Sales Tax and Another13

5.5. Mr. Mishra, learned Advocate for Respondent No.6 – Financial Institution i.e. M/s. Cholamandalam Investtment & Financial Co. opposes the Petition and would submit that present Petition is not maintainable and deserves to be dismissed on the ground of maintainability and overriding prevalence of the provisions of Section 26E of SARFAESI Act over Section 11 of EPF Act, 1952. He would submit that Petitioner ought to have approached the Debts Recovery Tribunal under Section 17 of SARFAESI Act, 2002 in order to challenge the order and actions taken by the secured creditor instead of invoking the Writ jurisdiction of this Court as such recovery as public dues, taxes, cess, fees cannot be recovered in Writ jurisdiction of this Court rather the alternative statutory remedy available to Petitioner is to be exhausted. He would submit that none of the Respondents impleaded are public parties nor perform public functions, hence on this ground alone present Petition deserves to be dismissed. He would submit that

13 (2022) SCC OnLine Bom 1767 15 of 32 Respondent No.6 – Financial Institution has also registered its charge over Respondent No.2 – Company’s assets on 19.01.2022 well before the Order dated 05.04.2022 was passed under Section 7A of EPF Act, 1952, hence under Section 26E of SARFAESI Act, 2002 dues of Respondent No.6 – Financial Institution will have priority over Petitioner’s claim. He would submit that Respondent No.6 – Financial Institution has followed the letter of the law and cannot be deprived of auctioning Respondent No.2 – Company’s assets to recover its dues in priority over Petitioner’s dues. He would submit that both EPF Act, 1952 and SARFAESI Act, 2002 are Central legislations with non obstante clauses which are not repugnant to each other however since SARFAESI Act, 2002 came into force subsequently, it will undoubtedly prevail over EPF Act,1952. He adopts the rest of submissions made by Mr. Samantaray which for the sake of brevity, are not reiterated herein.

5.6. In support of his above submissions, he has referred to and Courts to contend that present Petition deserves to be dismissed in view of the ratio laid down in the following cases:- (1) PHR Invent Educational Society V/s UCO Bank & Others14; (2) Phoenix Asset Reconstruction Company Private Limited V/s Vishwa Bharti Vidya Mandir and Others (Supra) 14 (2024) SCC OnLine 528 16 of 32 (3) Kotak Mahindra Bank Limited V/s Girnar Corrugatrors Private Limited & Others15 (4) Jalgaon Janta Sahakari Bank Limited and Another V/s Joint Commissioner Sales Tax and Another (Supra) (5) Gujrat State Civil Supplies Corporation Limited V/s Mahakali Foods Private Limited and Another (Supra)

6. I have heard Mr. Rattesar, learned Advocate for Petitioner, Mr. Samantaray, learned Advocate for Respondent No.1 – Bank and Mr. Mishra, learned Advocate for Respondent No.6 – Financial Institution and perused the record of the case with their able assistance. Submissions made by the learned Advocates at the bar have received due consideration of the Court.

7. It is seen that as Respondent No.2 – Company failed to repay its loan / credit facility availed from Respondent No.1 – Bank and Respondent No.6 – Financial Institution, Respondent No.1 – Bank after following the due process of law and registering its charge filed application under Section 14 of SARFAESI Act, 2002 before Additional Chief Metropolitan Magistrate who passed Order dated 18.09.2023 allowing the application and directing Respondent No.1 – Bank to take possession of Respondent No.2 – Company’s flats in the Society. It is seen that Petitioner filed present Petition seeking to restrain Respondent No.1 – Bank from taking possession of said flats in pursuance of Order dated 18.09.2023 passed by Additional Chief

17 of 32 Metropolitan Magistrate under SARFAESI Act, 2002 on the premise that present Petition arises from an Order passed under SARFAESI Act,

2002. In this regard, attention is drawn to Rule 18(3) of Bombay High Court Appellate Side Rules, 1960 pertaining to powers of Single Judge to dispose of application under Article 226 or 227 is relevant which is reproduced hereunder:- “11 [18. Single Judge's powers to finally dispose of applications under Article 226 or 227.— Notwithstanding anything contained in Rules 1,[4] and 17 of this Chapter, applications under Article 226 or under Article 227 of the Constitution (or applications styled as applications under Article 227 of the Constitution read with Article 226 of the Constitution) arising out of— (1) xxxxxx (2) xxxxxx (3) The decrees or the orders passed by any Subordinate Court or by any quasi Judicial Authority in any suit or proceeding (including suits and proceedings under any Special or Local Laws), but excluding those arising out of the Parsi Chief Matrimonial Court and orders passed under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993; the Administrative Tribunals Act, 1985; the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and Maharashtra Scheduled Castes, Scheduled Tribes, De-notified Tribes, (Vimukta Jatis), Nomadic Tribes, Other Backward Classes and Special Backward Category (Regulation of Issuance and Verification of) Caste Certificate Act, 2000;]”

8. It is seen from the above that Petitioner seeks to restrain Respondent No.1 – Bank from executing Order dated 18.09.2023 and this Order arises out of proceedings under SARFAESI Act, 2002. It is seen that Rule 18 of Bombay High Court Appellate Side Rules, 1960 lays down the types of matters which are to be heard by the Single Judge. Rule 18(3) of Bombay High Court Appellate Side Rules, 1960 18 of 32 clearly excludes jurisdiction of Single Judge from hearing matters arising out of orders under the SARFAESI Act, 2002. Therefore this Rule dispossesses this Court, being a Single Bench, of power to grant reliefs prayed for in the present Petition. Thus it is seen that only the Division Bench of this Court is possessed of powers to rule upon the reliefs prayed for by Petitioner in the present Petition.

9. It is seen that one dispute between Petitioner and Respondent No.2 arises out of Respondent No.2 – Company’s default in depositing statutory remittances towards Provident Fund dues of its employees from whose salary contribution towards Provident Fund was admittedly deducted and due to such default employees of Respondent No.2 – Company filed numerous complaints with Petitioner who initiated proceedings under Section 7A of EPF Act, 1952 and Order dated 25.04.2022 was passed by Regional Provident Fund Commissioner – I directing Respondent No.2 – Company to pay Rs.14,00,63,857/-. Second dispute interwoven with the above dispute is between Petitioner on the one hand and Respondent No.1 – Bank on the other, both seeking priority of their respective claims over Respondent No.2 – Company’s assets. Same is the dispute between Petitioner and Respondent No.6 – Financial Institution. It is seen that Respondent No.2 – Company availed loans / credit facilities from Respondent No.1 – Bank and Respondent No.6 – Financial Institution and on default by following the due process of law both these entities 19 of 32 duly registered their debts with CERSAI in accordance with Section 26E of SARFAESI Act, 2002 on 07.05.2020 and 19.01.2022 respectively. Section 7A order under EPF Act, 1952 was passed on 25.04.2022. Petitioner seeks to execute this order by seeking reliefs in the present Petition for sale of assets (flats) of Respondent No.2 which are mortgaged with Respondent No.1. It is seen that Respondent No.1 Bank filed Securitization Application under SARFAESI Act, 2002 before the Additional Chief Metropolitan Magistrate which came to be allowed vide Order dated 18.09.2023. Hence dispute raised and question to be answered is whether Section 11 of EPF Act, 1952 will prevail over Section 26E of SARFAESI Act, 2002 in cases where Respondent No. 2 is in default of payment of its Provident Fund dues to its employees among other debts due to its secured creditors? Admittedly, Respondent No.2 – Company deducted Provident Fund contribution regularly from its employees salary however it failed to deposit these monies with Petitioner. It is seen that on the basis numerous complaints received from employees of Respondent No.2 – Company, quasi – judicial proceedings were initiated against the Company under Section 7A of EPF Act, 1952 before Regional Provident Fund Commissioner – I who passed order dated 25.04.2022 determining Provident Fund liability of Rs.14,00,63,857/- along with costs of Rs.50,000/-. It is seen that numerous correspondence was exchanged between Petitioner and Respondent No.1 – Bank, 20 of 32 Respondent No.6 – Financial Institution and the Society where assets of Respondent No.2 i.e. flats are situated with each party claiming first charge and priority over the said assets.

10. At the outset, it is seen that Petitioner being a machinery of the Central Government filed present Petition under this Court’s Writ Jurisdiction seeking reliefs against Respondent Nos.[1] and 6 both being private banking and non banking financial institutions respectively. It is seen that since Respondent No.1 – Bank and Respondent No.6 – Financial Institution are private entities being duty bound to their respective account holders and do not perform any public function or duty to public at large, neither do they fall within the definition of “State” as contemplated in Article 12 of the Constitution of India, hence prima facie Petitioner has wrongly invoked this Court’s Writ Jurisdiction to obtain relief against Respondent Nos.[1] and 6. In this regard, I would like to quote paragraph No.18 of the Supreme Court judgment in the case of Phoenix ARC Private Limited V/s. Vishwa Bharati Vidya Mandir and Others (Supra) wherein it is held that private financial institutions cannot be subjected to Writ Jurisdiction of this Court to challenge actions under SARFAESI Act, 2002. The contents of the said paragraph apply squarely to the facts of the case and before me. It is reproduced below:-

18. Even otherwise, it is required to be noted that a writ petition against the private financial institution — ARC — the 21 of 32 appellant herein under Article 226 of the Constitution of India against the proposed action/actions under Section 13(4) of the SARFAESI Act can be said to be not maintainable. In the present case, the ARC proposed to take action/actions under the SARFAESI Act to recover the borrowed amount as a secured creditor. The ARC as such cannot be said to be performing public functions which are normally expected to be performed by the State authorities. During the course of a commercial transaction and under the contract, the bank/ARC lent the money to the borrowers herein and therefore the said activity of the bank/ARC cannot be said to be as performing a public function which is normally expected to be performed by the State authorities. If proceedings are initiated under the SARFAESI Act and/or any proposed action is to be taken and the borrower is aggrieved by any of the actions of the private bank/bank/ARC, borrower has to avail the remedy under the SARFAESI Act and no writ petition would lie and/or is maintainable and/or entertainable. Therefore, decisions of this Court in Praga Tools Corpn. [Praga Tools Corpn. v. C.A. Imanual, (1969) 1 SCC 585] and Ramesh Ahluwalia [Ramesh Ahluwalia v. State of Punjab, (2012) 12 SCC 331: (2013) 3 SCC (L&S) 456: 4 SCEC 715] relied upon by the learned counsel appearing on behalf of the borrowers are not of any assistance to the borrowers.

11. The above ratio clearly applies to the facts of the present case viz. subjecting private banks and non banking financial institutions to Writ Jurisdiction of this Court. It is also seen that there are six Respondents impleaded in the present Petition and none of them are functionaries of the State neither do they perform any public function and hence they cannot be subjected to the Writ Jurisdiction of this Court.

12. It is seen that Petitioner seeks to recover Provident Fund dues from Respondent No.2 – Company however Petitioner cannot seek to challenge Order passed in proceedings arising out of SARFAESI Act, 2002 under Writ Jurisdiction of this Court without exhausting the 22 of 32 efficacious and alternate remedies available in law. In this regard I would like to quote paragraph No.10 from the Supreme Court judgment in the case of South Indian Bank Limited & Ors. V/s. Naveen Mathew Philip and Anr. (Supra) which is relied upon by Mr. Samanataray. The aforementioned paragraph No.10 is reproduced hereunder:- “10. The learned Senior Counsel brought to the notice of this Court that a writ petition involving private individuals over a financial transaction is not maintainable. Despite the position being settled, the interference by various High Courts continues. The very objective of Act 54 of 2002 is being frustrated by such interference. The alternative remedy being effective and efficacious, the extraordinary jurisdiction of the High Court under Article 226 of the Constitution of India, either be a writ of certiorari or mandamus, ought not to have been invoked. One has to see the impact on the appellants of the repeated interference by the High Court. The learned Senior Counsel took us through the following decisions: (i)Phoenix ARC (P) Ltd.v. Vishwa Bharati Vidya Mandir [Phoenix ARC (P) Ltd.v.Vishwa Bharati Vidya Mandir, (2022) 5 SCC 345: (2022) 3 SCC (Civ) 153] (ii)Federal Bank Ltd.v.Sagar Thomas[Federal Bank Ltd.v.Sagar Thomas, (2003) 10 SCC 733]. (iii)SBI v. Arvindra Electronics (P) Ltd.[SBI v.Arvindra Electronics (P) Ltd., (2023) 1 SCC 540: (2023) 2 SCC (Civ) 364] (iv)United Bank of India v. Satyawati Tondon[United Bank of India v.Satyawati Tondon, (2010) 8 SCC 110:

(v)State Bank of Travancore v. Mathew K.C.[State Bank of Travancore v. Mathew K.C., (2018) 3 SCC 85: (2018) 2 SCC (Civ) 41] (vi)Varimadugu Obi Reddy v. B. Sreenivasulu [Varimadugu Obi Reddy v. B. Sreenivasulu, (2023) 2 SCC 168: (2023) 1 SCC (Civ) 58].”

13. It is seen that Petitioner possesses an effective and efficacious alternate remedy in law in approaching the Debts Recovery Tribunal under Section 17 of SARFAESI Act, 2002. It is seen that it is trite law that in commercial cases when an alternative, effective and efficacious 23 of 32 remedy in law exists then Petitioner ought to have pursued such remedy instead of approaching this Court under its Writ Jurisdiction. It is seen that Section 17 of SARFAESI Act, 2002 enables any aggrieved person to approach the Debts Recovery Tribunal if the grievance lies against action taken to recover secured debts. In this regard I would also like to rely on the decision of the Supreme Court passed in the case of Kotak Mahindra Bank Limited V/s. Girnar Corrugators Private Limited (Supra). In paragraph No.34 it is held that any person aggrieved from steps taken under Section 13(4) of SARFAESI Act, 2002 or orders passed under Section 14 of SARFAESI Act, 2002 ought to approach the Debts Recovery Tribunal under Section 17 of SARFAESI Act, 2002. Paragraph No.34 is reproduced hereunder:-

14. In the present case, Petitioner is aggrieved by Order dated 18.09.2023 passed by the Additional Chief Metropolitan Magistrate directing Respondent No.1 – Bank to take possession of flats owned by Respondent No.2 – Company hence it ought to have approached the Debts Recovery Tribunal. It is seen that since said flats owed by 24 of 32 Respondent No.2 – Company are situated within the territorial jurisdiction of Debts Recovery Tribunal, hence Petitioner is not precluded from approaching the DRT to seek appropriate reliefs and more so it ought to have approached DRT especially when the legislature has provided the mechanism to obtain the reliefs as prayed for in the present Petition. Therefore Petitioner ought to have approached the Debts Recovery Tribunal to seek the desired relief against Respondent Nos.[1] and 6 before approaching this Court under its Writ Jurisdiction.

15. In regards to merits of the present case, controversy between parties pertains to whether Section 11 of EPF Act, 1952 would prevail over Section 26E of SARFAESI Act, 2002. In this regard, attention is drawn to Section 11 of EPF Act, 1952 and Section 26E of SARFAESI Act, 2002. Section 11 EPF Act, 1952 reads thus:- “Section 11. Priority of payment of contributions over other debts. (1)] 2 [Where any employer is adjudicated insolvent or, being a company, an order for winding up is made, the amount due-- (a) from the employer in relation to 3 [an establishment] to which any 4 [Scheme or the Insurance Scheme] applies in respect of any contribution payable to the Fund 5 [or, as the case may be, the Insurance Fund], damages recoverable under section 14B, accumulations required to be transferred under sub-section (2) of section 15 or any charges payable by him under any other provision of this Act or of any provision of the 6 [Scheme or the Insurance Scheme]; or (b) from the employer in relation to an exempted [establishment] in respect of any contribution to 8 [the Provident Fund or any Insurance Fund] (in so far it relates to exempted employees), under the the rules of 8 [the Provident Fund or any Insurance Fund], 9 [any contribution payable by him towards the Family Pension Fund under sub-section (6) of section 17], damages recoverable under section 14B or any 25 of 32 charges payable by him to the appropriate Government under any provision of this Act or under any of the conditions specified under section 17, shall, where the liability thereof has accrued before the order of adjudication or winding up is made, be deemed to be included among the debts which under section 49 of the Presidency-towns Insolvency Act, 1909 (3 of 1909), or under section 61 of the Provincial Insolvency Act, 1920 (5 of 1920), or under 10[section 530 of the Companies Act, 1956 (1 of 1956)], are to be paid in priority to all other debts in the distribution of the property of the insolvent or the assets of the company being wound up, as the case may be. [Explanation.--In this sub-section and in section 17, "insurance fund" means any fund established by an employer under any scheme for providing benefits in the nature of life insurance to employees, whether linked to their deposits in provident fund or not, without payment by the employees of any separate contribution or premium in that behalf. [(2) Without prejudice to the provisions of sub-section (1), if any amount is due from an employer 13 [whether in respect of the employees contribution (deducted from the wages of the employee) or the employer's contribution], the amount so due shall be deemed to be the first charge on the assets of the establishment, and shall, notwithstanding anything contained in any other law for the time being in force, be paid in priority to all other debts. Section 26E of SARFAESI reads as under:- [26E. Priority to secured creditors.--Notwithstanding anything contained in any other law for the time being in force, after the registration of security interest, the debts due to any secured creditor shall be paid in priority over all other debts and all revenues, taxes, cesses and other rates payable to the Central Government or State Government or local authority. Explanation.--For the purposes of this section, it is hereby clarified that on or after the commencement of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), in cases where insolvency or bankruptcy proceedings are pending in respect of secured assets of the borrower, priority to secured creditors in payment of debt shall be subject to the provisions of that Code.]”

16. Section 11 EPF Act 1952 and Section 26E SARFAESI Act, 2002 both contain non – obstante clauses with regard to payment of dues. Section 11(2) of EPF Act, 1952 states that when money is due from any employer which may be deducted from employees’ salary or employers contribution this amount shall have first charge over assets 26 of 32 of employer and shall be paid prior to all debts notwithstanding any law for the time being in force. It is seen that on the basis of the above provision, dues of employer towards Provident Fund are to be paid in priority to other dues owed to other entities / financial institutions and the wording of the provision is mandatory and not directory. Section 26E of SARFAESI, Act 2002 states that after secured creditor registers debt / security interest then debts due to such secured creditor shall be paid to him over all other debts payable to Central Government and / or State Government entities notwithstanding any law for the time being in force. Further Section 35 SARFAESI Act, 2002 states that it shall have effect over other laws for the time being in force. Hence it seen that not only does Section 11(2) EPF Act, 1952 clash with Section 26E SARFAESI Act, 2002 but both provisions form part of Central legislation and contain identical non obstante clauses. It is trite law that where there are two Central Laws which contain provisions with non obstante clauses which conflict and both provisions are not repugnant to each other, then the later law must prevail over the earlier law on the ground that it was enacted later and while enacting the later law, legislature was fully aware of the earlier law and intended provisions of the later law are therefore to prevail over the provisions of the earlier law. It the legislative had intended otherwise, then in the later law, appropriate provision would have been enacted.

17. Attention is drawn to the decision of the Supreme Court in 27 of 32 the case of Kotak Mahindra Bank Limited V/s. Girnar Corrugators Private Limited and Others (Supra) relied upon by Mr. Mishra to show that statute enacted by legislature later in time would prevail over statute enacted by legislature prior in time and in this regard paragraph No.30 of the said decision is relevant and is reproduced below:-

18. It is seen that Section 26E of SARFAESI Act, 2002 was inserted into SARFAESI Act, 2002 through amendment in 2016 whereas Section 11(2) of EPF Act, 1952 was inserted into EPF Act, 1952 through an amendment in 1976. Hence Section 26E of SARFAESI Act 2002 is the later law and it shall prevail over Section 11(2) EPF Act 1952. It is seen that Section 26E of SARFAESI Act, 2002 mandatorily states that creditors who secure their debts should be entitled to payment of such debts in priority to debts and other monies owed to other entities including functionaries of State and Central 28 of 32 Government. The term is clear and unambiguous. Even the Supreme Court’s recent decision relied upon by Mr. Rattesar in paragraph No. 25 hold that the time in which the statute was enacted or the provision was incorporated assumes significance and the provision later in time would prevail. It further holds that only if there is a first charge statutorily created validly, dehors the non-obstante clause conferring priority over other debts, the statutory charge would prevail. Such is not the present case of the parties. It is seen that Respondent No.1 – Bank’s charge / debt was registered with CERSAI on 07.05.2020 as per law. It is also seen that after Respondent No.6 – Financial Institution disbursed loan and extended credit facility to Respondent No.2 – Company, their charge / debt was registered with CERSAI on 19.01.2022 as per law. However, Petitioner did not register its charge / debt over Respondent No.2 – Company’s assets despite having complaints received from employees, it having investigated the complaints and having passed Order dated 25.04.2022 holding Respondent No.2 – Company in default. Petitioner ought to have registered its charge, i.e. dues of Respondent No.2 – Company’s contribution to Provident Fund, with CERSAI and initiated proceedings before the appropriate forum in accordance with law. In this regard, I would like to refer to a judgment of this Court in the case of Jalgaon Janta Sakhari Bank Ltd. and Another V/s. Joint Commissioner of Sales Tax and Another (Supra) which is relied upon by Mr. Samanataray and 29 of 32 Mr. Mishra both to contend that registration of charge / debt with CERSAI is mandatory and secured creditors who register the same are entitled to priority of payment of dues over other debtors. Paragraph Nos.78, 79, 88 and 89 of the above decision are relevant in this regard and are reproduced hereunder:- “78. Section 26E, also beginning with a non obstante clause, is unambiguous in terms of language, effect, scope and import. A “priority” in payment over all other dues is accorded to a secured creditor in enforcement of the security interest, if it has a CERSAI registration, except in cases where proceedings are pending under the provisions of the Insolvency and Bankruptcy Code, 2016.

79. The disabling provision in section 26D and the enabling provision in section 26E, both begin with non obstante clauses, as noticed above. The scheme of Parts III and IV-A of the SARFAESI Act envisages benefits to a secured creditor who is diligent and obtains CERSAI registration while depriving a secured creditor of even taking recourse to Chapter III without the requisite registration. xxxxxx xxxxxx

88. Bare perusal of the 2016 Amending Act would show that the dues of the Central/State Governments were in the specific contemplation of Parliament while it amended the RDDB Act and the SARFAESI Act, both of which make specific reference to debts and all revenues, taxes, cesses and other rates payable to the Central Government or State Government or local authority and ordains that the dues of a secured creditor will have “priority”, i.e., take precedence. Significantly, the statute goes quite far and it is not only revenues, taxes, cesses and other rates payable to the State Government or any local authority but also those payable to the Central Government that would have to stand in the queue after the secured creditor for payment of its dues.

89. The effect of using the word “priority” in section 26E of the SARFAESI Act, according to us, is this. The rights accorded to “first charge” holders by Central as well as State legislation having been known to Parliament, in such a situation, what Parliament intended by exercising its legislative power by introducing amendments in the SARFAESI Act, more particularly by incorporating section 26E therein, was to explicitly make the 30 of 32 valuable right of the “first charge” holder subordinate to the dues of a second creditor. The rights of such of the first charge holders accorded by several legislations enacted by the State, having regard to the language in which section 26E is couched, would rank subordinate to the right of the secured creditor as defined in section 2(1)(zd) subject, of course, to compliance with the other provisions of the statute. Acceptance of the contra-arguments of learned counsel for the State/respondents would undo what Parliament has chosen to do.”

19. In view of my above observations and findings and the facts and circumstances of the present case, I hold that Petitioner does not possess any ground in law to restrain Respondent No.1 – Bank and Respondent No.6 – Financial Institution from taking possession of Respondent No.2 – Company’s flats in the Society and auctioning the same and to use its proceeds to repay the loans / credit facilities owed by Respondent No.2 – Company to Petitioner in accordance with law. Resultantly, the Petition fails.

20. However, Petitioner is at liberty to approach the Debts Recovery Tribunal under Section 17 of SARFAESI Act, 2002 or take recourse to any other appropriate remedy as available to Petitioner in law. Writ Petition is dismissed. [ MILIND N. JADHAV, J. ]

21. After the above judgment is pronounced in Court Mr. Rattesar pursuades the Court to stay the judgment to enable the Petitioner to approach the Supreme Court to test the validity and legality of the judgment. I have considered his request. However in 31 of 32 view of my observations and findings returned hereinabove, I am not inclined to accede to his request. Stay of judgment is declined. [ MILIND N. JADHAV, J. ] Ajay 32 of 32 TRAMBAK UGALMUGALE