Section 26E (Priority to secured creditors) under Chapter IVA (Registration by secured creditors and other creditors) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 —
“Notwithstanding anything contained in any other law for the time being in force, after the registration of security interest, the debts due to any secured creditor shall be paid in priority over all other debts and all revenues, taxes, cesses and other rates payable to the Central Government or State Government or local authority.
Explanation.—For the purposes of this section, it is hereby clarified that on or after the commencement of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), in cases where insolvency or bankruptcy proceedings are pending in respect of secured assets of the borrower, priority to secured creditors in payment of debt shall be subject to the provisions of that Code.”
Extra Notes for Readers
(1) Section 26E of SARFAESI Act, 2002 was inserted by the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016 (Act 44 of 2016), sec. 18, (w.e.f. 1-Sep-2016).