In Brief
Indiabulls Housing Finance challenged a High Court order that quashed SARFAESI Act proceedings against Deccan Chronicle. The High Court had held that since the original loan came from a non-banking company (IBFSL) not covered by SARFAESI, and IBFSL had already initiated arbitration, SARFAESI could not be invoked even after IBFSL merged with Indiabulls. The Supreme Court held that SARFAESI Act has retroactive effect and applies to all existing debts when the Act becomes applicable to a lender. A successor-in-interest through merger can invoke SARFAESI provisions. Simultaneous SARFAESI and arbitration proceedings are permissible as they are complementary remedies. The appeal was allowed and the High Court judgment was set aside.
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