Secured creditor's right to enforce security independently under SARFAESI prevails over insolvency constraints and title-deed deposit demands.

A secured creditor who elects to realise security under SARFAESI may stand outside insolvency proceedings and enforce the secured asset independently. Section 48 of the Presidency-Towns Insolvency Act, read with Rules 9 to 11 of the Second Schedule, preserves the creditor's choice to realise the security, surrender it for the common benefit of creditors, or retain it and claim only for the balance; mere pendency of insolvency does not displace that election. The later and special SARFAESI framework authorises independent enforcement of the security interest, so no fetter could be imposed by requiring deposit of the title deeds with the Official Assignee. The direction to deposit the title deeds was therefore unsustainable.

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Issues: Whether a secured creditor, having invoked the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, could stand outside the insolvency proceedings and enforce the secured asset without being compelled to deposit the title deeds with the Official Assignee.

Analysis: Section 48 of the Presidency-Towns Insolvency Act, 1909, read with Rules 9, 10 and 11 of the Second Schedule, recognises the position of a secured creditor who may either realise security, surrender it for the general benefit of creditors, or retain it and prove only for the balance. The secured creditor's election to realise security is preserved by the insolvency framework and is not displaced by the mere pendency of insolvency proceedings. The scheme of the SARFAESI Act, 2002, as a special and later enactment, enables the secured creditor to enforce its security interest independently. The Court treated the insolvency regime as pari materia with liquidation principles and held that no fetters could be placed on the secured creditor's statutory right to proceed under SARFAESI. The direction requiring deposit of title deeds with the Official Assignee was therefore unsustainable.

Conclusion: The secured creditor was entitled to stand outside the insolvency proceedings and proceed under SARFAESI without depositing the title deeds with the Official Assignee.

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