The Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as ‘IBC’) was introduced for the consolidation of laws relating to reorganization and insolvency in a time bound manner. This single codified framework has been brought in to unify the erstwhile laws relating to this subject matter, which were spread across numerous statues. Ever since the introduction of IBC, India gained momentum at the global economic forefront and is successfully being recognized as a potential investment destination. The success of IBC cannot be doubted; the proof is India’s improved ranking and a big jump on the Ease of Doing Business Index which is released by the World Bank, owing to the improvement in efficiency in resolving insolvency, which is one of the 7 indicators used to calculate the Index. Therefore, IBC is undoubtedly one of the most significant reforms in the legal as well as financial setting of India.
On the other hand, The Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (hereinafter referred to as ‘SARFAESI Act’) was introduced for the purpose of allowing financial institutions to determine the asset quality in various ways.  Basically, SARFAESI Act provides for allowing financial institutions to recover loans through the auction of properties of the defaulter.  Securitization can be understood to be a procedure of pooling of financial assets into marketable securities which can be further sold to the investors; this process, asset reconstruction as well as enforcement of the security is dealt with by the SARFAESI Act and is regulated by the Reserve Bank of India (hereinafter referred to as ‘RBI’).
2. Research Questions
Now that we have a brief understanding of both the enactments, it will be better to clearly identify the research questions which have been considered for the purpose of analysis. It is clear that both, IBC as well as SARFAESI Act are directed towards recovery of bad debt, by the way of identifying the assets of a debtor, which can be consequently used to fill in the default in the form of bad debt. While identifying these assets and also under many other circumstances, considering that these enactments are directed towards more or less the same objective in many areas, it is inevitable to avoid the clash between the two.
Furthermore, IBC after it was introduced, consolidated and amended nearly 11 other laws and the overlapping provisions in all these laws were done away with. These acts included major enactments such as inter alia Sick Industrial Companies (Special Provisions) Act, 1985, The Recovery of Debts Due to Banks and Financial Institutions Act, 1993, the SARFAESI Act and The Companies Act, 2013. IBC has also specifically provided for the overriding clause in the form of Sec. 238. This Sec. reads as follows-
Provisions of this Code to override other laws – The provisions of this Code shall have an effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law.
Notwithstanding the existence of this express provision, the tribunals have witnessed a lot of cases relating to the interplay and overlapping of IBC with other acts, specifically the SARFAESI Act. Now, to understand the key differences, the interplay of these enactments and the overriding provisions in detail, the following research questions will be extensively dealt with in the analysis-
2.1 When these two laws come at loggerheads, which one shall prevail?
2.2 What are the key differences between both the laws?
2.3 Which one of the two laws is preferred for the recovery of dues and why?
The non-obstante provision of Sec. 238 in the IBC as aforementioned, provides it supremacy over any other law for matters which are overlapping. This has been explained properly by the way of judicial pronouncements which have been discussed in detail to answer the identified research questions. For this Analysis, the Author has relied on secondary sources of research, inter alia, Journals, Online Articles, Books & Legal Blogs. Before analyzing the case laws to observe the judicial trend in this regard, it will be helpful to critically analyze the already available information in this regard; for this purpose, the Author has reviewed the following literature which extensively answers the first research question at hand-
3.1 LITERATURE REVIEW
The Interplay of Insolvency & Bankruptcy Code and SARFAESI Act- A Judicial Trend : By Varun Akar.
This literature has been published in the form of an expert article on this topic and it comprehensively deals with the non-obstante clause and its application in cases where both the IBC as well as the SARFAESI Act are triggered simultaneously. The article starts with explaining the non-obstante clause and its overriding effect over any other law in matters which clash, and also explains that still the adjudicating authorities come across cases in which the question is similar. For this, the article has relied on several judicial pronouncements to explain the overriding effect of the non-obstante clause. This preference of IBC over SARFAESI was first observed in the case of M/S Unigreen Global Private Limited v. Punjab National Bank.  It was held in this case that once the moratorium is imposed under the IBC, then proceedings under Sec. 13(4) of the SARFAESI Act shall not proceed. Furthermore, in another case of Rakesh Kumar Gupta v. Mahesh Bansal, it was held that the pending proceedings under SARFAESI Act shall not hinder the proceedings triggered by the financial creditor under the IBC. Therefore, even when proceedings under SARFAESI Act have already been initiated, fresh proceedings under IBC can still be accepted because of the non obstante clause.  This article concluded that the IBC will prevail over SARFAESI. The scope of the non obstante clause was also thrown light upon that Sec. 238 will render all the provisions of IBC to prevail over any other laws dealing with the same subject matter. IBC is independent from SARFAESI Act and it is because of this reason that proceedings under any other law do not affect the creditor’s right to file an application under IBC. This literature has successfully answered the first research question at hand, however, it does not talk about the remaining two, which shall be covered further. Also, as per my understanding, I would say that the article has also missed out on some of the landmark decisions in this regard which are necessary to understand the judicial trend. I have covered the same in the subsequent sections of my analysis.
3.2 JUDGMENT REVIEW
Encore Asset Reconstruction Company Pvt. Ltd v. Ms. Charu Sandeep Desai
This is a landmark case which extensively deals with the scenario when the two laws at question come at loggerheads. This case cleared the air in this regard which should be understood properly. The facts of this case were that in 2011, the corporate debtor secured a loan from Dena Bank by mortgaging the property. There was a default, subsequent to which proceedings were triggered under the SARFAESI Act and the property was taken over by the bank in the year 2017. Further, in late 2017, fresh proceedings were initiated under the IBC as an application was filed u/s 7 against the Corporate Debtor by the State Bank of India. Moratorium was declared under the IBC. Dena Bank then approached the NCLT seeking an order to stop the Interim Resolution Professional (hereinafter referred to as ‘IRP’) from demanding custody of the property as it was already in their possession because of the proceedings under SARFAESI Act.
For arguments, Dena Bank relied on the Apex Court’s judgment in Transcore v. Union of India and argued that as they have already taken possession of the property, all the rights in relation to the same are vested with them. The NCLT analyzed this judgment of the Supreme Court and observed that the rights in the asset can be claimed by the financial institution “as if” it is the owner of the asset and the words “as if” denote deemed ownership and not actual ownership of the property. They further held that the IRP was bound by the law to take custody of the property in question u/s 18 of IBC.
This decision was appealed to the NCLAT and the NCLAT observed that as stipulated by Sec. 18, the IRP is duty bound to take custody of the property. The NCLAT further said that the afore cited judgment of Transcore was way before the IBC came into existence and cannot be relied upon because of the IBC and its non-obstante clause which gives it an overriding effect over the SARFAESI Act.
3.3 FORUM SHOPPING
On similar lines, another landmark verdict was pronounced in the recent case of Punjab National Bank v. M/s Vindhya Cereals Pvt. Ltd. In this case the NCLAT set aside the decision of the NCLT on the ground forum shopping in a matter where the NCLT rejected an application under IBC on the ground that the matter was already pending under the SARFAESI Act. Basically, forum shopping is a practice in which litigants initiate cases in courts where the believe that a favourable verdict can be gotten and it can lead to unfairness and can create distortions in the legal system because of unnecessary burden on the courts. However, in the aforementioned case, the NCLAT observed that because simultaneous proceedings under the IBC and SARFAESI can exist, this was not a case of forum shopping. They also observed tat the objective behind the introduction of IBC is to ensure speedy justice.
A similar stand was taken in many other caselaws, inter alia, Bimalkumar Manubhai Savalia v. Bank of India, Digamber Bhondwe v. JM Financial Asset Reconstruction Company Limited and Mr Srikanth Dwarakanath Liquidator of Surana Power Limited v. Bharat Heavy Electricals Limited.
3.4 DIFFERENCES BETWEEN BOTH THE LAWS
The following are the key differences between both the laws in pointers-
3.5 WHICH ONE OF THE TWO LAWS IS PREFERRED AND WHY?
Ever since the introduction of IBC in the year 2016, it has been observed that the lenders prefer it over SARFAESI Act. Even after the amendments in SARFAESI Act, a lot of issues still have been left unaddressed and the Act has failed to prove its effectiveness in numbers as well. Talking about the data of the year 2018-19, the recovery rate under the SARFAESI Act was 14.5% only, whereas the same under IBC was 42.4% which is way more than the former.  Furthermore, pending cases continue to be a problem with SARFAESI Act. As on June 30, 2017, there were 109,598 cases pending across Debt Recovery Tribunal (DRT) with recovery dues of Rs 6,35,000 crore. Under the IBC, as of November 2019, the resolved cases were 160. The number of cases admitted till September 2019 was 2,542. Therefore, mainly because of the fact that IBC provides a speedy remedy and is also efficient for reviving the business and safeguarding the interests of all the stakeholders, it is preferred over the SARFAESI Act.
We have seen the judicial trend to understand the applicability and implications of both the laws and circumstances when the clash with each other. We have also discussed the key differences between the two and the reasons why IBC is preferred over the SARFAESI Act for the recovery of debt. Even though there is an explicit provision of the non-obstante clause, cases are still witnessed where both the laws overlap and hence clash which each other, further delaying the proceedings. What can be concluded on the basis of this observation is that even though the legislature has made considerable efforts to bring harmony between both the laws, the same is not being implemented properly.
The existence of multiple laws in relation to the same subject matter in itself is a problematic concern. Interplay of the Code with debt recovery laws such as the SARFAESI Act and DRT Act has not been fully addressed, and there is an apparent tension between these statutes. However, for an insolvency regime to function effectively, clear harmonization for the interplay of the different laws will have to be done.
The above discussed judgments have given a lot of clarity for the application of the non-obstante clause of the IBC, still, considering the fact the lenders have the liberty to move the different tribunals and trigger multiple proceedings, this issue will continue to pose a threat to the speedy recovery goals of IBC as well as the objectives of SARFAESI. Often, there are instances where the multiple proceedings are triggered under different enactments and forum shopping is practiced with a fraudulent and malicious motive to pressurize the other party by the way of opening the floodgates of litigation. This concern should be addressed more clearly on the ground level and the interplay between both these enactments will have to be identified more clearly by either the legislature or the Supreme Court.
 The Insolvency and Bankruptcy Code, 2016 (Act No. 31 of 2016), Preamble.
 Dipak Mondal, How IBC helped improve India’s ease of doing business ranking, Business Today, (Oct 24, 2020 at 5.09 pm), https://www.businesstoday.in/current/economy-politics/how-ibc-helped-improve-india-ease-of-doing-business-rankings/story/386544.html#:~:text=India’s%20ranking%20in%20the%20World,used%20to%20build%20the%20index.&text=The%20rest%20of%20the%20cases%20are%20at%20different%20stages%20of%20insolvency.
 Srijan Anant, Aayushi Mishra, A Study Of Insolvency And Bankruptcy Code And
Its Impact On Macro Environment Of India, Vol. 7 Issue 3, Int, J of Dev. & Res., 28, 28-35 (2019).
 Jai Bajpai, Battle for Claiming Secured Assets: Insolvency Code vs SARFAESI Act, India Corp Law, (25th Oct. 2020, 4.30 pm), https://indiacorplaw.in/2019/06/battle-claiming-secured-assets-insolvency-code-vs-sarfaesi-act.html#:~:text=Battle%20for%20Claiming%20Secured%20Assets%3A%20Insolvency%20Code%20vs%20SARFAESI%20Act,-By%20Guest&text=The%20objective%20of%20the%20Insolvency,solutions%20for%20non%2Dperforming%20assets.&text=The%20SARFAESI%20Act%20deals%20with,banks%20and%20other%20secured%20creditors.
 CS Ishrat Siddiqui, Synopsis on Sarfaesi Act Vs Insolvency and Bankruptcy code, 2016, Tax Guru, (24th Oct 2020, 9.20 pm), https://taxguru.in/corporate-law/synopsis-sarfaesi-act-insolvency-bankruptcy-code-2016.html
 supra note 4.
 The Insolvency and Bankruptcy Code, 2016 (Act No. 31 of 2016), § 238.
 Varun Akar, The Interplay of Insolvency & Bankruptcy Code and SARFAESI Act- A Judicial Trend,  117 taxmann.com 831 (Article).
 Company Appeal (At) (Insolvency) No. 81 of 2017
 Company Appeal (At) (Insolvency) No. 1408 of 2019.
 The Insolvency and Bankruptcy Code, 2016 (Act No. 31 of 2016), § 7.
 supra note 8.
 Company Appeal (At) (Insolvency) No. 719 of 2018.
 The Insolvency and Bankruptcy Code, 2016 (Act No. 31 of 2016), § 14.
 2008 (1) SCC 125.
 The Insolvency and Bankruptcy Code, 2016 (Act No. 31 of 2016), § 18.
 supra note 16.
 Company Appeal (At) (Insolvency) No. 854 of 2019.
 Company Appeal (At) (Insolvency) No. 1166 of 2019.
 Company Appeal (AT) (Insolvency) No. 1379 of 2019.
 Company Appeal (AT) (Insolvency) No. 1510 of 2019.
 supra note 5.
 SARFAESI Act vs Invoking IBC, AAA Insolvency, (25th Oct 2020, 11.00 am), https://insolvencyandbankruptcy.in/presentation/sarfaesi-act-vs-invoking-ibc/
 Divyansh Nayar, Interplay between the IBC and SARFAESI for recovery of dues, The ICLRAP Blog, (25th Oct 2020, at 3.14 pm), http://iclrap.in/interplay-between-the-ibc-and-sarfaesi-for-recovery-of-dues/#:~:text=The%20inconsistency%20here%20was%20that,of%20the%20defaulting%20corporate%20debtor
 “Explained: Why lenders prefer IBC over SARFAESI Act for recovery of dues” Business Standard, (25th Oct. 2020, 7.06 pm), https://www.business-standard.com/article/economy-policy/explained-why-lenders-prefer-ibc-over-sarfaesi-act-for-recovery-of-dues-120011900913_1.html