In the realm of debt recovery, Section 35 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act, 2002) plays a crucial role, establishing the SARFAESI Act's rules as paramount in cases of debt recovery. This section acts as a legal declaration, stating unequivocally that the provisions of the SARFAESI Act take precedence over any conflicting laws or regulations.

What Does Section 35 Mean?

• Overriding Authority: Section 35 asserts that the SARFAESI Act shall prevail, even in the presence of inconsistent provisions found in other laws. The court has interpreted this to mean that the SARFAESI Act overrides every other regulation operating within the same domain, ensuring a clear hierarchy in legal authority.

Why Emphasize the SARFAESI Act's Supremacy?

1. Efficiency and Clarity: The SARFAESI Act provides a specific set of rules and procedures for debt recovery, creating a well-defined roadmap for lenders, borrowers, and authorities. This clarity prevents confusion and streamlines the recovery process, allowing for quicker resolutions.

2. Specialized Expertise: The Act establishes dedicated institutions, such as Debt Recovery Tribunals, specifically designed to handle debt recovery issues. Recognizing their primacy allows these specialized bodies to utilize their expertise effectively without the complications of navigating multiple legal frameworks.

3. System Stability: A consistent approach to debt recovery fosters predictability and stability in the financial system. This benefits all parties involved, from lenders seeking to recover dues to borrowers looking for equitable solutions.

Important Caveats to Consider

Despite the supremacy of the SARFAESI Act, there are crucial caveats:

• Fundamental Rights: The Act cannot infringe upon the fundamental rights guaranteed by the Constitution. If actions taken under the SARFAESI Act violate these rights, individuals can still seek redress through the general legal system.

• Concurrent Application: In certain cases, provisions of other laws may not directly conflict with the SARFAESI Act but remain relevant. In such instances, both sets of rules may apply simultaneously, depending on the specifics of the situation.

Conclusion

In summary, Section 35 of the SARFAESI Act establishes it as the primary legal framework for debt recovery, emphasizing efficiency, clarity, and stability in financial dealings. While it prioritizes the SARFAESI Act's provisions, it also upholds fundamental rights and acknowledges the potential relevance of other laws. This clear hierarchy aims to facilitate effective debt recovery while safeguarding individual rights within the financial ecosystem. By recognizing the supremacy of the SARFAESI Act, stakeholders can navigate the complexities of debt recovery with greater assurance and clarity