NATIONAL SPOT EXCHANGE LIMITED versus UNION OF INDIA & ORS.

Citation: [2025] 7 S.C.R. 252 · Decided: 14-05-2025 · Supreme Court of India · Bench: BELA M. TRIVEDI
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Judgment (excerpt)

[2025] 7 S.C.R. 252 : 2025 INSC 694
National Spot Exchange Limited 
v. 
Union of India & Ors.
(Writ Petition (Civil) No. 995 of 2019)
15 May 2025
[Bela M. Trivedi* and Satish Chandra Sharma, JJ.]
Issue for Consideration
Whether the Secured creditors would have priority of interest over 
the assets attached under the Provisions of Prevention of Money 
Laundering Act, 2002, (PMLA) and Maharashtra Protection of 
Investors and Depositors Act, 1999 (MPID Act), by virtue of the 
provisions of SARFAESI Act, 2002 and RDB Act, 1993; whether 
the properties of the Judgment Debtors and Garnishees attached 
under the Provisions of MPID Act, 1999 would be available 
for the execution of the decrees against Judgment Debtors in  
view of the Provision of Moratorium under Section 14 of the  
IBC, 2016.
Headnotes†
Prevention of Money Laundering Act, 2002 (PMLA) – 
Maharashtra Protection of Investors and Depositors Act, 
1999 (MPID Act) – s.4 – Securitisation and Reconstruction 
of Financial Assets and Enforcement of Security Interest 
Act, 2002 (SARFAESI Act) – s.26E – Recovery of Debts and 
Bankruptcy Act, 1993 (RDB Act) – Constitution of India – 
Article 246 – Commodity Exchange Platform of National 
Spot Exchange Limited committed payment defaults and 
fraud of about Rs.5,600 Crores – Secured creditors, if would 
have priority of interest over the assets attached under the  
PMLA and MPID Act, by virtue of the SARFAESI Act and RDB 
Act:
Held: No priority of interest can be claimed by the Secured 
Creditors against the properties attached under the MPID Act – 
The provisions of MPID Act would override any claim for priority 
of interest by the Secured Creditors in respect of the properties 
* Author
[2025] 7 S.C.R. 
253
National Spot Exchange Limited v. Union of India & Ors.
which have been attached under the MPID Act – Monies or 
deposits of depositors/investors, who were allegedly defrauded 
by the Financial Establishment, and for the recovery of which 
the MPID Act has been enacted, could not be said to be a “debt” 
contemplated in s.26E of the SARFAESI Act, and hence also the 
provisions of s.26E are not attracted to the facts of the case – Order 
passed by the Supreme Court Committee on 10.08.2023 upheld.  
[Paras 43, 44, 53]
Maharashtra Protection of Investors and Depositors Act, 1999 
(MPID Act) – ss.4, 4(2), 5, 7 – Insolvency and Bankruptcy Code, 
2016 – s.14 – The properties of the Judgment Debtors and 
Garnishees attached under the MPID Act, if would be available 
for the execution of the decrees against Judgment Debtors in 
view of the provision of moratorium u/s.14, IBC:
Held: Yes – Properties of the Judgment Debtors and Garnishees 
attached under the provisions of the MPID Act, would be available 
for the execution of the decrees against the Judgment Debtors by 
the Supreme Court Committee, despite the provision of moratorium 
u/s.14, IBC – Order passed by the Supreme Court Committee on 
08.01.2024 upheld. [Paras 52, 53]
Constitution of India – Article 246, 254; Seventh Schedule – 
Federal Structure Doctrine – Maharashtra Protection of 
Investors and Depositors Act, 1999 (MPID Act) – Securitisation 
and Reconstruction of Financial Assets and Enforcement of 
Security Interest Act, 2002 (SARFAESI Act) – Recovery of 
Debts and Bankruptcy Act, 1993 (RDB Act) – Prevention of 
Money Laundering Act, 2002 (PMLA) – Conflict between the 
laws made by the Parliament and the law made by the State 
Legislature – Overlapping of legislative fields – Whether the 
MPID Act covers or relates to the same subject matter as 
covered under the Central Legislations i.e., SARFAESI Act 
and RDB Act as also PMLA:
Held: State of Maharashtra was within its legislative competence 
to enact the MPID Act, the subject matter of which in pith and 
substance was relatable to Entries 1, 30 and 32 of the State List 
(List II) of the Seventh Schedule of the Constitution of India – The 
subject matter of PMLA is traceable to the Entry-13 of Union List 
254
[2025] 7 S.C.R.
Supreme Court Reports
(List-I) of Seventh Schedule – Further, both SARFAESI and RDB 
Act have been enacted with regard to the matter pertaining to 
“Banking,” which subject matter is relatable to the Entry 45 “Banking” 
falling in the Union List (List-I) of Seventh Schedule – Considering 
the pith and substance of the State and the Central Legislations 
in question, the Central Legislations i.e., SARFAESI Act or RDB 
Act cannot be permitted to prevail over the State Legislation i.e., 
M
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