Section 26E commencement under SARFAESI depends on notification and cannot retrospectively displace earlier recovery steps.

Section 26E of the SARFAESI Act gives priority to a secured creditor only after the provision is brought into force by notification. The Court noted that the relevant amendment was not notified to commence Section 26E from 01.09.2016, so the earlier view that it had already operated from that date could not stand. It also held that Section 26E was not retrospective and could not unsettle recovery steps taken before its commencement. The prior finding on commencement was therefore set aside, while the secured creditor was left free to proceed in accordance with law.

---

---

Issues: Whether Section 26E of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 had come into force from 01.09.2016 and could override the revenue recovery proceedings and auction notice in favour of the secured creditor.

Analysis: Section 26E contains a non obstante clause and gives priority to the secured creditor after registration of security interest. However, the provision could operate only when brought into force by an appropriate notification. The material notification chronology showed that the relevant provisions of the amendment were not notified to commence Section 26E from 01.09.2016. The Court also held that the provision was not retrospective so as to invalidate steps already taken before its commencement. The earlier finding that Section 26E had come into force on 01.09.2016 was therefore unsustainable.

Conclusion: Section 26E had not come into force on 01.09.2016, and the finding to that effect was set aside. The appeal succeeded to that extent, while the Bank was left free to proceed in accordance with law.

Ratio Decidendi: A statutory priority provision that depends upon governmental notification cannot be treated as operative before its notified commencement, and it cannot be applied retrospectively to displace prior recovery steps unless the legislature has clearly so provided.

---