Finance : The paper shows that loan fraud persists due to enforcement failures, not lack of legal provisions. It highlights delays in detect...
Corporate Law : The Court held that insolvency proceedings cannot be invoked after completion of SARFAESI auction to stall recovery. It clarified ...
Corporate Law : Learn the critical protections available to borrowers facing recovery actions, including notice, appeal, and redemption rights, to...
Corporate Law : Learn how secured creditors can relinquish or realize their security interest during liquidation under IBC, including timelines an...
Corporate Law : Explore how the SARFAESI Act transformed banking practices, enhancing recovery processes while raising concerns about borrowers' r...
Corporate Law : Ministry of Finance addresses Lok Sabha questions on misuse of SARFAESI Act, detailing existing safeguards for borrowers and regul...
Finance : There is no mention of the term re-sealing of property in SARFAESI Act, 2022 and the Recovery of Debts and Bankruptcy (RDB) Act, 1...
Corporate Law : The Central Govt has initiated formulation of laws to secure prudential banking & help effect a culture of credit discipline i...
Fema / RBI : The Gross Advances of Scheduled Commercial Banks (SCBs) increased from Rs.25,03,431 crore as on 31.3.2008 to Rs. 68,75,748 crore...
Fema / RBI : It is widely felt that the spectre of high-value economic offenders absconding from India to defy the legal process seriously unde...
Income Tax : The ITAT Mumbai ruled that income earned by a securitisation trust created under the SARFAESI Act was taxable in the hands of Secu...
Corporate Law : The Court held that disputed issues and ongoing statutory proceedings cannot be challenged through a writ petition. It emphasized ...
Corporate Law : The High Court held that DRT orders are appealable under Section 18 of the SARFAESI Act. It ruled that writ jurisdiction cannot be...
Corporate Law : The Tribunal admitted the voluntary insolvency application after examining financial statements, bank records, and other documents...
Corporate Law : The tribunal relied on Supreme Court precedent to hold that a second proceeding cannot be filed when an earlier challenge has been...
CA, CS, CMA : CA. Ravish Maniyar found guilty of professional misconduct by ICAI for failing to disclose pending SARFAESI proceedings in an audi...
Fema / RBI : Reserve Bank of India (RBI) has issued Circular RBI/2023-24/63 on September 25, 2023, addressing the display of information relate...
Finance : Central Government hereby specifies such housing financial companies registered under sub-section (5) of section 29A of the Nation...
Corporate Law : Government notifies Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Central Registry) ...
Fema / RBI : Sale notice for sale of movable properties- E-Auction Sale Notice for Sale of Movable Assets under the Securitisation and Reconstr...
It is very clear that the Banks should follow RBI guidelines on Asset-Classification before classifying any loan account as ‘Non-performing Asset (NPA)’. There were judgments saying that it is mandatory for the Banks to follow RBI guidelines while classifying an account as ‘Non-Performing Asset (NPA)’ and any deviation in this regard can vitiate the proceedings […]
There is every need for the Government to enable/assist the Banks in reducing their NPAs (Non-performing Assets) and it is beyond doubt that the Banks are now well assisted/equipped through the legal frame-work in recovering their dues.
A creditor can maintain a winding up petition if he complies with the provisions of Sections 433, 434 and 439 of the said Act of 1956. In the present case, the respondent-Bank was admittedly a creditor of the company. The company did not dispute such relationship. The company did not dispute receipt of the notice, hence, the winding up petition was maintainable.
It is alleged that the Banks or the officials of the Bank often misuse the provision of ‘The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002)”. It is also alleged that the Bank officials help some clients/borrowers using all technicalities and their expertise in financial matters. While the Bank officials help few, they tend to be very perfect and sincere in respect of other cases where there is enough security and where the default is negligible and can be corrected.
After the constitution of Debt Recovery Tribunals (DRT) and Debt Recovery Appellate Tribunals (DRAT) under The Recovery of Debts due to Banks and Financial Institutions Act, 1993 and after conferring the authority to entertain appeals from the aggrieved persons under section 17 of SARFAESI Act, 2002, Banks have gained an upper-hand in the course of recovery of their dues. It is hard to see a Bank now going to Civil Court or facing a Civil Proceeding in-respect of recovery of their dues.
Under the provisions of ‘Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’ in short), the Bank can invoke the process of recovery of money on its own without any adjudicatory process. The Banks can proceed with the enforcement of ‘security’ under the provisions of SARFAESI Act, 2002. If any borrower or any person is aggrieved with the action initiated by the Bank under the provisions of SARFAESI Act, 2002, then, he can approach the Debt Recovery Tribunal (DRT) under section 17 of the Act by paying the prescribed fee.
Company Law Board exercises very important functions under section 397/398 of the Companies Act, 1956 providing relief to the shareholders against ‘oppression and mis-management’ in the Company. When a group of shareholders are oppressed in any company or the company is mis-managed causing loss to the interests of the shareholders, shareholders very frequently exercise the option of approaching the Company Law Board under section 397/398 of the Companies Act, 1956 if they are qualified to do so under section 399.
It is always welcome to enable the Banks to recover their dues using the provisions of SARFAESI Act, 2002. It is known that it is very difficult for the Banks to approach Civil Court asking for a decree and getting that decree executed. With the intention of enabling the Banks to reduce their NPAs through faster recovery of dues, ‘The Recovery of Debts Due to Banks and Financial Institutions Act, 1993’ was enacted.
As per Sub-section (2), the ISARC becomes a lender of the financial assets in place of SIDBI and thus, has all the rights of SIDBI in relation to the financial assets which were acquired by it. The contention of the learned counsel for the petitioner that no financial facility was extended by SIDBI to ISARC and so the cheques in question would not be financial assets within Sub-section (2), is highly misplaced. SIDBI had advanced certain loans to the petitioners,
It would be clueless for the professionals at times in answering the queries of the borrowers facing proceedings under ‘The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002’. If the Bank initiates proceedings under the provisions of SARFAESI Act, 2002, then, in view of section 34, no Civil Court shall have jurisdiction to entertain any suit or legal proceeding in respect of the same subject matter.
