Central securitisation law prevails over conflicting State land restriction; valuation requirements for auction sale were also satisfied.

The later Central securitisation law prevails over the Tripura land revenue restriction to the extent the State provision barred sale of mortgaged property to a non-tribal purchaser, because enforcement of secured assets forms part of banking and an inconsistent State law must yield in the overlapping field. The challenge to the sale notice on valuation also failed, as the record showed an approved valuer's report, a reserve price, and a sale above that reserve price, satisfying the prescribed valuation requirements under the Enforcement Rules. The auction process was therefore not vitiated on the alleged valuation ground.

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Issues: (i) Whether the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 prevails over Section 187 of the Tripura Land Revenue and Land Reforms Act, 1960 so as to permit sale of mortgaged property to a non-tribal purchaser. (ii) Whether the sale notification was invalid for non-compliance with the valuation requirements under the Security Interest (Enforcement) Rules, 2002.

Issue (i): Whether the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 prevails over Section 187 of the Tripura Land Revenue and Land Reforms Act, 1960 so as to permit sale of mortgaged property to a non-tribal purchaser.

Analysis: The operative question was one of legislative competence and conflict between a later Parliamentary law dealing with banking and enforcement of security interest and an earlier State law restricting sale of mortgaged property. Article 246 embodies federal supremacy where an irreconcilable conflict exists between Union and State legislation in their respective fields. The Court held that sale of secured assets by a bank is an integral part of banking, and that the Central enactment authorises sale to any purchaser without restricting the class of buyers. Section 187 of the State Act, to the extent it imposed a restriction inconsistent with the Central law, constituted an encroachment into the banking field and had to yield.

Conclusion: The Central Act prevailed, and Section 187 of the Tripura Land Revenue and Land Reforms Act, 1960 was inoperative to the extent of inconsistency.

Issue (ii): Whether the sale notification was invalid for non-compliance with the valuation requirements under the Security Interest (Enforcement) Rules, 2002.

Analysis: The Court examined the reserve price mentioned in the sale proclamation and the approved valuer's report placed on record. It found that valuation had in fact been obtained and the property was sold for a price higher than the reserve price. The requirements under Rule 5 and Rule 8(5) were therefore treated as complied with.

Conclusion: The challenge based on alleged violation of the valuation rules failed.

Final Conclusion: The impugned High Court order was unsustainable, as the Parliamentary law governing enforcement of security interest prevailed over the inconsistent State restriction and the auction process was not vitiated on the valuation ground.

Ratio Decidendi: Where a later Parliamentary enactment in the Union field authorises sale of secured assets by a bank without restricting the category of purchasers, any inconsistent State law operating in an overlapping area must yield to the extent of conflict.

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