Corporate Law : It is very clear that the Banks should follow RBI guidelines on Asset-Classification before classifying any loan account as ‘Non...
Finance : In the recent past, there is much talk among the business people, media and also society about India’s growth story, consequence...
Corporate Law : With great pain from the bottom of my heart, I have been writing this article. I have got great respect for legal profession, lega...
Corporate Law : There is every need for the Government to enable/assist the Banks in reducing their NPAs (Non-performing Assets) and it is beyond ...
Fema / RBI : It is known that while some loan transactions with the Bank like Housing Loan, Educational Loan etc. are very simple, some commerc...
Recovery of its due has been a hectic exercise for the Banks in the absence of a special legislation. ‘Non-performing Assets’ were growing and a need was felt to reduce the ‘Non-performing Assets’ of the Banks drastically. As the recovery through Courts was a difficult exercise for the Banks, initially, a special legislation called ‘The Recovery of Debts due to Banks and Financial Institutions Act, 1993’ was enacted creating a Special Tribunal called ‘Debt Recovery Tribunal’.
It is known that proceedings under section 397/398 of the Companies Act, 1956 are always complicated. There will often be criticism that the jurisdiction of Company Law Board (CLB) under section 397/398 of the Companies Act, 1956 is being misused.
Legal profession is a wonderful profession if young lawyers know as to how to succeed in profession. I have recently heard an interview of Shri Gopal Subramaniyam where he was emphasizing on various law colleges in the country apart from ‘National Law Schools’. He was clearing the doubts about the ‘Qualifying Examination’. On another occasion, I have heard him referring to the responsibilities of ‘Senior Advocates’ in profession and as to how the Senior Advocates should provide an opportunity to the young professionals who has no privileged background.
Many argue that the provisions of SARFAESI Act, 2002 are draconian in nature. Borrowers do often refer to their good relations with the Bank for a considerable time and they express angst at the Bank’s action under the provisions of the SARFAESI Act, 2002. The borrowers do often question as to why the Bank should not consider the reputation of the customer, understand the temporary difficulties and grant time rather proceeding against the ‘Secured Asset’ using the provisions of the SARFAESI Act, 2002 mechanically.
It may be true that Banks do face numerous difficulties in recovering the dues despite having ‘security’. But, there can not be any difficulty for the Banks in recovering their dues under SARFAESI Act, 2002. It is alleged that even the Debt Recovery Tribunals and Appellate Tribunal do favour Banks and keep on insisting on making substantial payment to the Bank without looking into the merits or demerits in the Appeal filed by the borrower under the Act. According to me, earlier, the High Courts used to discourage the borrowers filing Writ Petitions and Civil Revision Petitions under Article 227 either during the pendency of the Appeal before the Tribunal or before filing the Appeal.
We may very often say great things about Indian Judiciary or legal system. It is true that we have had great legal luminaries, who played a very important role in our democracy defending the Fundamental Rights of the people, expanding the scope of Part-III of Indian Constitution and who played a very important role in preserving and upholding the Constitutional Principles. People with no exposure to Courts, may appreciate our legal system and Indian Judiciary when they look at the intervention of High Courts and Supreme Courts in the matters of public importance.
There were judgments on section 397/398 of the Companies Act, 1956 relying on technicalities even at the final stage. Now, in my opinion, technicalities are ignored and the substance is keenly noted in a petition under section 397/398 of the Companies Act, 1956. For example, there were many decisions on the issue of ‘consent’ under section 399 of the Act and there were judgments saying that disputed facts can not be decided by the Company Law Board and those require Trial. In the recent past, there were no such pronouncements.
Though I had to face inevitable struggles in legal profession even after having the required qualities to succeed in profession, I always feel that the legal profession is one of the noble professions which can contribute alot to the society apart from the personal development of that particular professional. When it comes to law, I always felt that it is not important as to which college one studies, and it all depends upon the encouragement provided by few faculty members and alot depends upon the interest of that particular student to excel in his studies. I have had the privilege of associating with highly talented students even in ordinary law colleges or Government Law Colleges in this Country. It is true that a law student requires some guidance and he should have good understanding of the legal profession and the requirement of possessing certain basic qualities like drafting, thinking, logical thinking, hard-work, planning etc.
I am extremely happy to listen to the discussion conducted by Mr.Arnab Goswamy of Times Now in his News Hour programme highlighting the observations made by Justice Markandeya Katju of Supreme Court on the functioning of lower judiciary. In any democratic set-up, independent and efficient judiciary is very important. We have very good systems in place in India and the only thing I feel is that we remain stagnant.
There can be disputes between majority group and minority shareholders in any Company and these disputes come very frequently in closely held companies or Private Limited Companies. The Companies Act, 1956 provides certain rights to the shareholders
