Whether PMLA Prevails Over SARFAESI Act? Supreme Court To Hear SBI's Plea On October 20

The Supreme Court will hear on October 20th plea filed by State Bank of India challenging the Punjab and Haryana High Court's decision that Prevention Of Money Laundering Act(PMLA) prevails over the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act (SARFAESI Act)

A Bench comprising Justice AM Khanwilkar, Justice Dinesh Maheshwari and Justice CT Ravikumar was considering the case State Bank of India v. Enforcement Directorate.

Solicitor General of India Tushar Mehta submitted hat the issue pertains to "whether PMLA could prevail SARFAESI Act",  and requested the bench to hear it independently from the other batch of matters relating to PMLA.

Accepting this request, the bench posted the matter to October 20.

The present special leave petition has been filed challenging the Punjab and Haryana High Court's order holding that the PMLA would prevail over the SARFAESI Act, and another order dismissing an application seeking its recall or modification.

A Division Bench of the Punjab and Haryana High Court comprising Justice Rajan Gupta and Justice Ajay Tiwari through its order 22nd January 2021 had dismissed an application filed seeking recall/modification of order dated 28th Feb 2020 whereby it was held that on conjoint reading of both the Acts, that the PMLA would prevail over the SARFAESI Act.

It may be noted that the Delhi High Court had in 2019 held that the SARFAESI Act along with the Recovery of Debts and Bankruptcy Act and Insolvency and Bankruptcy Code does not prevail over the provisions of Prevention of Money-Laundering Act.

The Bench while considering appeals against appellate tribunal (as constituted under PMLA), which held that the RDBA, SARFAESI Act and IBC prevail over relevant statutory provisions of PMLA, had observed that these laws be construed and enforced in harmony, without one being in derogation of the other. 

Case Title: State Bank of India vs Enforcement Directorate|SLP(Crl) 4835/2021

Click here to read/download the review order of P&H HC