SARFAESI Act

Constitutional Validity of SARFAESI Act of 2002 tested under ‘Mardia Chemicals vs. UOI’

Finance - Constitutional Validity of SARFAESI Act of 2002 tested under ‘Mardia Chemicals vs. Union of India’ Introduction: ♦ The constitutional validity of SARFAESI was assailed, in particular Sections 13, 15, 17, 34 on the basis that these sections are unreasonable and arbitrary. ♦ IDBI Bank served a notice upon Mardia when the Act...

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Priority of Secured Creditors over Government Dues

Finance - Till 31.08.2016 and with effect from 1.9.2016, the Government dues have lost priority of its tax dues against the banks or financial institutions secured creditors ('secured creditors') since the Recovery of Debts and Bankruptcy Act, 1993 and Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2...

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Overview of SARFAESI Act 2002 & Note on process of Enforcement of Security Interest under Section 13

Finance - The right of the secured creditor to enforce the security interest under the SARFAESI Act does not arise unless the account of the borrower has been classified as an NPA in the books of account of the secured creditor (banks or financial institutions) in accordance with the guidelines issued by the Reserve Bank of India (RBI)....

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IBC v. SARFAESI Act – Interplay and Overlapping

Finance - 1. Introduction 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.[1] This single codified framework has been brought in to unify the erstwhile laws relating to this subject matter, which were spread ...

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Is Moratorium required at Pre-admission stage?

Finance - Under Insolvency and Bankruptcy code, the application for initiation of corporate insolvency Resolution Proceedings can be initiated by 1) Financial Creditor under section 7(1) 2) Operational Creditor under section 9(1) 3) Corporate Debtor under section 10(1) Financial creditor means as per the section 5(7)  the person to whom the financ...

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SARFAESI Act, 2002: 3 month imprisonment if borrower not provide asset details

Finance - The Central Govt has initiated formulation of laws to secure prudential banking & help effect a culture of credit discipline including Insolvency and Bankruptcy Code, 2016 (IBC) has been enacted to create a unified framework for resolving insolvency and bankruptcy matters. IBC,by adopting a creditor-in-saddle approach,with the interim...

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Draft ‘Fugitive Economic Offenders Bill, 2017’ -Govt invite comments

Finance - It is widely felt that the spectre of high-value economic offenders absconding from India to defy the legal process seriously undermines the rule of law in India. It is, therefore, felt necessary to provide an effective, expeditious and constitutionally permissible deterrent to ensure that such actions are curbed....

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Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Bill, 2011 approved

Finance - The Union Cabinet today approved introduction of the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Bill, 2011 in the next session of Parliament. The proposed amendments would enable banks to improve their operational efficiency, deploy more funds for credit disbursement to retail investors, home loan borrowers, e...

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Mere Balance Sheet entries not amounts to acknowledgment of Debt under Limitation Act

Bishal Jaiswal Vs Asset Reconstruction Company (India) Ltd. & Anr. (NCLAT Delhi) - Section 18 of the Limitation Act, 1963 would have no application to proceedings under I&B Code. Therefore, the issue raised as regards acknowledgement of liability by reflection in the Balance Sheet/ Annual Return would be irrelevant....

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Mortgage of secured creditor gets prior charge over charge for tax/VAT dues

State Bank of India Vs State of Maharashtra (Bombay High Court) - State Bank of India Vs State of Maharashtra (Bombay High Court) In our considered view the facts in the case at hand being similar to the facts in the case of ASREC (India) Limited (Supra) that decision would squarely be applicable to the facts of this case that if any Central statute creates priori...

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Bank can institute/continue with proceedings against a Guarantor under SARFAESI despite IBC proceedings against Principal Borrower

Kiran Gupta Vs State Bank of India & Anr. (Delhi high Court) - Kiran Gupta Vs State Bank of India & Anr. (Delhi high Court) Whether a Bank/Financial Institution can institute or continue with proceedings against a Guarantor under the SARFAESI Act, when proceedings under the IBC have been initiated against the Principal Borrower & the same are pending ad...

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Remedy u/s 14 of SARFAESI Act not rendered redundant if District Magistrate unable to handover possession

C. Bright Vs District Collector & Ors. (Supreme Court of India) - C. Bright Vs District Collector & Ors. (Supreme Court) Whether the time limit of 30 days which is further extendable by a further period 30 days for a District Collector to secure the possession of a secured asset is mandatory or directory? The challenge in the present appeal is to an order pass...

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SARFAESI Act applicable to even Cooperative Banks: SC

Pandurang Ganpati Chaugule Vs Vishwasrao Patil Murgud Sahakari (Supreme Court of India) - Pandurang Ganpati Chaugule Vs Vishwasrao Patil Murgud Sahakari (Supreme Court) (1) (a) The co-operative banks registered under the State legislation and multi-State level co-operative societies registered under the MSCS Act, 2002 with respect to ‘banking’ are governed by the legislation ...

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Housing financial companies | Financial institutions | SARFAESI Act

Notification No. S.O. 2405(E) - (17/06/2021) - Central Government hereby specifies such housing financial companies registered under sub-section (5) of section 29A of the National Housing Bank Act, 1987 (53 of 1987), having assets worth rupees one hundred crore and above, as financial institutions for the purposes of the Securitisation and Recon...

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SARFAESI (Central Registry) (Amendment) Rules, 2020

Notification No. G.S.R. 45(E). - (24/01/2020) - Government notifies Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Central Registry) (Amendment) Rules, 2020. MINISTRY OF FINANCE (Department of Financial Services) NOTIFICATION New Delhi, the 24th January, 2020 G.S.R. 45(E).—In exercise of powers confe...

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Security Interest (Enforcement) Amendment Rules, 2018

Notification No. G.S.R. 1040(E) - (17/10/2018) - Sale notice for sale of movable properties- E-Auction Sale Notice for Sale of Movable Assets under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 read with proviso to Rule 6(2) of the Security Interest (Enforcement) Rules, 2002...

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SARFAESI Act 2002: Collection of taxes out of attached properties

F. No. 1(380)/DIT(R)/SARFAESI/ 17-18/ - (06/09/2017) - The SARFAESI Act has been amended on 12-08-2016 to extend the scope of the Act to provide for registration of security interest held by all other creditors, in addition to the banks and financial institutions defined as secured creditors under the Act. T...

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Setting up of Central Electronic Registry under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002

RBI/2010-2011/545 DNBS (PD) CC. No. 24/SCRC/26.03.001/2010-2011 - (25/05/2011) - DNBS (PD) CC. No. 24/SCRC/26.03.001/2010-2011 - Pursuant to the announcement made by the Finance Minister in the budget speech for 2011-12, Government of India, Ministry of Finance notified the establishment of the Central Registry vide notification F. No. 56/05/2007-BO-II dated March 31, 2011. The ...

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Recent Posts in "SARFAESI Act"

Housing financial companies | Financial institutions | SARFAESI Act

Notification No. S.O. 2405(E) 17/06/2021

Central Government hereby specifies such housing financial companies registered under sub-section (5) of section 29A of the National Housing Bank Act, 1987 (53 of 1987), having assets worth rupees one hundred crore and above, as financial institutions for the purposes of the Securitisation and Reconstruction of Financial Assets and Enforc...

Read More

Constitutional Validity of SARFAESI Act of 2002 tested under ‘Mardia Chemicals vs. UOI’

Constitutional Validity of SARFAESI Act of 2002 tested under ‘Mardia Chemicals vs. Union of India’ Introduction: ♦ The constitutional validity of SARFAESI was assailed, in particular Sections 13, 15, 17, 34 on the basis that these sections are unreasonable and arbitrary. ♦ IDBI Bank served a notice upon Mardia when the Act...

Read More
Posted Under: Finance |

Priority of Secured Creditors over Government Dues

Till 31.08.2016 and with effect from 1.9.2016, the Government dues have lost priority of its tax dues against the banks or financial institutions secured creditors ('secured creditors') since the Recovery of Debts and Bankruptcy Act, 1993 and Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2...

Read More
Posted Under: Finance |

Overview of SARFAESI Act 2002 & Note on process of Enforcement of Security Interest under Section 13

The right of the secured creditor to enforce the security interest under the SARFAESI Act does not arise unless the account of the borrower has been classified as an NPA in the books of account of the secured creditor (banks or financial institutions) in accordance with the guidelines issued by the Reserve Bank of India (RBI)....

Read More
Posted Under: Finance |

Mere Balance Sheet entries not amounts to acknowledgment of Debt under Limitation Act

Bishal Jaiswal Vs Asset Reconstruction Company (India) Ltd. & Anr. (NCLAT Delhi)

Section 18 of the Limitation Act, 1963 would have no application to proceedings under I&B Code. Therefore, the issue raised as regards acknowledgement of liability by reflection in the Balance Sheet/ Annual Return would be irrelevant....

Read More
Posted Under: Finance | |

IBC v. SARFAESI Act – Interplay and Overlapping

1. Introduction 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.[1] This single codified framework has been brought in to unify the erstwhile laws relating to this subject matter, which were spread ...

Read More
Posted Under: Finance |

Mortgage of secured creditor gets prior charge over charge for tax/VAT dues

State Bank of India Vs State of Maharashtra (Bombay High Court)

State Bank of India Vs State of Maharashtra (Bombay High Court) In our considered view the facts in the case at hand being similar to the facts in the case of ASREC (India) Limited (Supra) that decision would squarely be applicable to the facts of this case that if any Central statute creates priority of […]...

Read More

Bank can institute/continue with proceedings against a Guarantor under SARFAESI despite IBC proceedings against Principal Borrower

Kiran Gupta Vs State Bank of India & Anr. (Delhi high Court)

Kiran Gupta Vs State Bank of India & Anr. (Delhi high Court) Whether a Bank/Financial Institution can institute or continue with proceedings against a Guarantor under the SARFAESI Act, when proceedings under the IBC have been initiated against the Principal Borrower & the same are pending adjudication? Section 128 of the Contract ...

Read More

Remedy u/s 14 of SARFAESI Act not rendered redundant if District Magistrate unable to handover possession

C. Bright Vs District Collector & Ors. (Supreme Court of India)

C. Bright Vs District Collector & Ors. (Supreme Court) Whether the time limit of 30 days which is further extendable by a further period 30 days for a District Collector to secure the possession of a secured asset is mandatory or directory? The challenge in the present appeal is to an order passed by the […]...

Read More

Is Moratorium required at Pre-admission stage?

Under Insolvency and Bankruptcy code, the application for initiation of corporate insolvency Resolution Proceedings can be initiated by 1) Financial Creditor under section 7(1) 2) Operational Creditor under section 9(1) 3) Corporate Debtor under section 10(1) Financial creditor means as per the section 5(7)  the person to whom the financ...

Read More
Posted Under: Finance |

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