State Bank of India vs Santosh Gupta - Supreme Court Case
State Bank of India vs Santosh Gupta - Supreme Court Important Judgment 2016 -
On 16th December, 2016, in the case of State Bank of India vs Santosh Gupta and Anr. Etc. [Civil Appeal Nos. 12237- 12238 of 2016], while examining the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI”) in its applicability to the State of Jammu & Kashmir, it was held that the entire SARFAESI Act, including Sections 17A and 18B, is in pith and substance referable to Entries 45 and 95 of List I of the VIIth Schedule to the Constitution, and therefore the Act as a whole would necessarily operate in the State of Jammu & Kashmir.
Observing that the High Court was absolutely wrong in finding that as Section 140 of the Jammu & Kashmir Transfer of Property Act will be infracted, SARFAESI cannot be held to apply to the State of Jammu & Kashmir, the Bench held that “Entries 45 and 95 of List I clothe Parliament with exclusive power to make laws with respect to banking”, and “anything that comes in the way of SARFAESI by way of a Jammu & Kashmir law must necessarily give way to the said law by virtue of Article 246 of the Constitution of India as extended to the State of Jammu & Kashmir, read with Section 5 of the Constitution of Jammu & Kashmir.” The Bench observed that “the State of Jammu & Kashmir has no vestige of sovereignty outside the Constitution of India and its own Constitution, which is subordinate to the Constitution of India.”