Enforcement of security interest

When Immoveable property is obtained as security by way of Mortgage, for its sale and realization of money court intervention is required. Similarly in case of moveable property , except the pledged security, court intervention is required.

The SARFAESI Act empowers bank and financial institutions to enforce securities in the event of default of borrower without intervention of either civil court or the DRT.Manner and Effect of Takeover of Management

No Compensation to the directors for loss of office


Right to Prefer Application to DRT

Any person, including borrower, aggrieved by the any of the measures taken by the SC or his authorised officer for taking possession of the security may apply to the DRT with prescribed fees within 45 Days.

If application by borrower, he has to deposit 50% of the amount claimed in the notice under Section 13(2) of the SARFAESI Act.

The DRT has to dispose of the application within 60 Days. If not possible, then DRT has to record reasons for delay but such delay should not be beyond 4 Months. If any such application is not disposed within 4 Months, the aggrieved party can prefer an application to the Appellate Tribunal for seeking early disposal of the application.


Appeal to Appellate Authority

Any person aggrieved by any order by the DRT under can prefer appeal along with the prescribed fees to the Appellate Tribunal within 30 Days from the date of the receipt of the order of the DRT. Different fees for borrower?s appeal and appeal by any other than borrower. The borrower has to deposit 50% of the debt claimed by the SC. The Tribunal has power to reduce this amount up to 25%.


Right of Borrower for Compensation and Costs

1. If the DRT /AT as the case may be, on the appeal holds that

The possession of secured asset by the SC is not in accordance with the provisions of the Acts or Rules

The SC should return such secured asset to the concerned borrower, with compensation and cost as may be determined by DRT/AT.

2. No pecuniary limit is fixed by the Act for the Appellate Jurisdiction.
If any Person contravenes or attempts to contravenes provisions of the SARFAESI Act or rules there under he shall be punishable with imprisonment for a term which may extend to one year or with fine or with both.

Section 12 : RBI is statutorily empowered to issue directions to the SC/RC. If any such company fails to comply with any of the directions issued by the RBI then such company is punishable with fine not exceeding 5 Lakh rupees for the default. In case of further continuation of the offence additional fine is up to Rs. 10 thousand per day of default can be imposed.

Section 31 : Exclusions of possessory securities to which act is NOT APPLICABLE

1. A Lien on any goods, money or security given by or under the Indian Contract Act, 1872.
2. A pledge of moveable within meaning of Section 172 of the Indian Contract Act, 1872.
3. Any conditional sale, hire-purchase or lease or any other contract in which security interest has been created.
4. Any rights of unpaid seller.
5. Any security interest for securing repayment of any financial asset not exceeding Rs. 1 Lakh rupees.
6. Any security interest created on agricultural land.

Section 20, 21 to 27 that provide for registration of security interest created, satisfaction of charge created.

 

Accounting & Finance for Banking

Principles & Practices of Banking Module E Pdf

Free
Module E PPB ePDFs available in our android app. Get them all at https://iibf.info/app

Accounting and Finance for Banking Module A Pdf

Free
Accounting and finance for bankers all ePDFs are available in our an app. Get them all at https://iibf.info/app

Accounting and Finance for Banking Module A Pdf

Free
Accounting and finance for bankers all ePDFs are available in our an app. Get them all at https://iibf.info/app
Learning Sessionshttps://iibf.info
Btech, JAIIB CAIIB and a tutor. Have taken more than 900+ hours online classes with more than 1,25,000 students

Popular

Free Live Classes

spot_img

More from author

What next after CAIIB? IIBF Certifications at a Glance

What next after CAIIB? 15 Certificate Exams in Finance and Banking useful for Bankers:: Introduction As per the IBA settlement, bankers who have passed JAIIB and CAIIB...

JAIIB Mega Mock Test for Free | Principles and Practices of Banking

ppb mock test:- Jaiib Exam 2020 dates will be announced soon for May 2020 by iibf. It is high time for preparing for all...

JAIIB Study Material Principles and Practices of Banking Live Class Previous Year Questions

https://www.youtube.com/watch?v=BG2s7lPiX9A Jaiib Study Material PDF Notes Papers Mock Tests - In this post you can get JAIIB Study Material PDF files as shared by other...

Principles and Practices of Banking – PPB Most important Questions

Hello friends, today in this article by the learning sessions we will share important questions and memory called topics of PPB that is principles...