In Brief
The State Bank of India and other banks challenged a Jammu & Kashmir High Court judgment that held SARFAESI (the 2002 securitization and debt recovery law) beyond Parliament's legislative competence when applied to the State. The Supreme Court held that SARFAESI, in its entirety, falls within Entry 45 (Banking) and Entry 95 (Court jurisdiction) of Union List I and applies fully to Jammu & Kashmir under Article 370. Recovery of debts is integral to banking. Section 140 of the State's Transfer of Property Act—which protects the right of permanent residents to acquire property—does not conflict with SARFAESI as Rule 8(5) of SARFAESI Rules preserves that protection. Article 35A shields permanent residents' special property rights from fundamental-rights challenges but does not curtail Parliament's competence. The Court affirmed that Jammu & Kashmir, though specially treated, is an integral part of the Union and subject to parliamentary legislation within its competence. The appeals were allowed and the High Court's judgment set aside.
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