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17. The principles laid down in the Transcore judgment dealt with the interplay between the Recovery of Debts and Bankruptcy Act (RDB Act) and the SARFAESI Act. The Hon'ble Supreme Court held that the first and third provisos to Section 19(1) of the DRT Act are enabling provisions introduced to align the DRT Act, NPA Act, and Order XXIII CPC. Withdrawal of the O.A. is not a precondition for invoking the NPA Act, and the bank/FI may act under the NPA Act with or without DRT's permission, depending on the circumstances. The doctrine of election does not apply to the DRT Act and the NPA Act, as they are not inconsistent or repugnant but together constitute a single, complementary remedy. The NPA Act 2025:KER:55397 provides a non-adjudicatory mechanism for enforcing the security interest created by the borrower in favour of the bank/FI, based not only on default in repayment but also on the borrower's failure to maintain margin and asset value, thereby enabling secured creditors to act without court intervention. Issuance of notice under Section 13(2) of the SARFAESI Act constitutes initiation of "action" within the meaning of the first proviso to Section 19(1) of the DRT Act.

2025:KER:55397

19. In M.D. Frozen Foods Exports (supra), the Supreme Court reaffirmed Transcore (supra) on the permissibility of simultaneous SARFAESI and DRT proceedings, and extended its reasoning to arbitration. Citing Section 37 of the SARFAESI Act, the Court held that SARFAESI remedies are in addition to other legal remedies, including those under the Arbitration Act, even though not expressly mentioned. It clarified that SARFAESI applies prospectively to all subsisting and enforceable debts, irrespective of when the NPA was declared, once the Act becomes applicable to the lender. Arbitral proceedings do not suspend SARFAESI enforcement, and the presence of an arbitration clause does not preclude statutory recovery under SARFAESI. The judgment upheld concurrent statutory and contractual remedies, so long as they are not mutually inconsistent.