RESTRICTIVE REMEDY UNDER SECTION 14 OF SARFAESI ACT

By Richa Saraf , (legal@vinodkothari.com)

In a recent Calcutta High Court (“Hon’ble High Court”) ruling of Union Bank of India & Anr. v. State of West Bengal & Ors. (01.09.2017), the object and intention behind Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”) was discussed. The issue for consideration before the Hon’ble High Court was whether the District Magistrate can consider and dispose of an application under Section 14, subsequent to sale of the immovable property, over which security interest was claimed and the Hon’ble High Court answered in negative. Below, we discuss the ruling. Read more

Guidance Note to NBFCs for nomination of counsel in Delhi High Court

By Richa Saraf, (legal@vinodkothari.com)

BACKGROUND:

  1. In exercise of its powers under sub clause (iv) of clause (m) of sub section (1) of section 2 read with section 31A of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ( “SARFAESI Act”), the Central Government issued a notification[1] dated August 5, 2016 notifying 196 Non- Banking Financial Companies (“Notified NBFCs”) as “Financial Institutions”, registered with the Reserve Bank of India (RBI) and having asset of Rs. 500 crore and above as per their last audited balance sheet, on which the SARFAESI Act is applicable. Read more

Legal Implication of Business Transfer Agreement, by Legal Team, on 22nd May, 2017

Business restructuring is a comprehensive process be it financial or technological or market or organisational. There are various modes by way of which it can take place such as re-organisation of capita, compromise/arrangement, merger/amalgamation, demerger, acquisition/takeover, slump sale, strategic alliance and such other similar modes. The primary motive behind undertaking any such rearrangement would be to prosper both in size and profits. The corporate restructuring process can be either be by any of the much traversed gradual way or a much faster way of selling off the business undertaking. Read more

A Two-section Ordinance, holding the key to India’s NPA crisis By Vinod Kothari

The much-awaited ordinance, expected to make a tangible impact on India’s crisis of piling non-performing loans, was signed into a law by the President on 5th May 2017. The Ordinance, consisting of barely two sections, makes amendments to the regulatory framework of banking in India, viz., the Banking Regulation Act. After reading the law, one is forced to think – if this is what was holding up the resolution of NPA crisis in the country, did it actually have to take all this time?

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Independence and Impartiality of Arbitrators: A Step Closer Towards Alternate Dispute Resolution, by Sneha Bhawnani & Swatilekha Chakraborty

In the recent times, a significant change has been noticed in the attitude and approach of the society, at large, in relation to resolution of disputes. It has been witnessed in some of the prominent Western countries, especially, the United States of America, that the Courts have adopted an approach which is clearly in favour of pro arbitration mechanisms. However, there is much scholarly debate to subject such alternate dispute mechanisms to a particular specified standard in order to avoid any conflict between the traditional way of delivering justice by means of Courts and the new method of resolving disputes by means of arbitration. Read more