THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002

PREAMBLE

What is the object of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 as stated in the preamble?

 To regulate securitisation and reconstruction of financial assets, enforcement of security interest, provide for a Central database of security interests created on property rights, and for matters connected therewith or incidental thereto.

What is the Act number of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act?

 Act No. 54 of 2002.

On which date did the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 receive assent?

 17th December, 2002.

By whom was the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 enacted?

 Parliament.

In which year of the Republic of India was the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 enacted?

 The Fifty-third Year of the Republic of India.

CHAPTER – 1

PRELIMINARY

What is the subject matter of Section 1 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Short title, extent and commencement.

What is the short title of the Act under Section 1?

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

To what extent does the Act extend?

It extends to the whole of India.

From which date is the Act deemed to have come into force?

The Act is deemed to have come into force on the 21st day of June, 2002.

What is the subject matter of Section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Definitions.

What is meant by "Appellate Tribunal" under Section 2(1)(a)?

A Debts Recovery Appellate Tribunal established under section 8(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

What is meant by "asset reconstruction" under Section 2(1)(b)?

Acquisition by an asset reconstruction company of any right or interest of any bank or financial institution in any financial assistance for the purpose of realisation of such financial assistance.

What is meant by "asset reconstruction company" under Section 2(1)(ba)?

A company registered with the Reserve Bank under section 3 for carrying on the business of asset reconstruction or securitisation, or both.

What entities are included in the definition of "bank" under Section 2(1)(c)?

A banking company, corresponding new bank, State Bank of India, subsidiary bank, multi-State co-operative bank, and any other bank notified by the Central Government.

What is meant by "banking company" under Section 2(1)(d)?

A banking company as defined in section 5(c) of the Banking Regulation Act, 1949.

What is meant by "Board" under Section 2(1)(e)?

The Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992.

Who is a "borrower" under Section 2(1)(f)?

Any person or pooled investment vehicle granted financial assistance by a bank or financial institution or who has given a guarantee or created a mortgage or pledge as security for such financial assistance.

Who is also included in the definition of "borrower" under Section 2(1)(f)?

A person or pooled investment vehicle becoming a borrower of an asset reconstruction company upon acquisition of rights or interest by it in such financial assistance.

Who is further included in the definition of "borrower" under Section 2(1)(f)?

A person who has raised funds through issue of debt securities.

What is meant by "Central Registry" under Section 2(1)(g)?

The registry set up or caused to be set up under section 20(1).

What is meant by "company" under Section 2(1)(ga)?

A company as defined in section 2(20) of the Companies Act, 2013.

What is meant by "corresponding new bank" under Section 2(1)(h)?

A corresponding new bank as defined in section 5(da) of the Banking Regulation Act, 1949.

What is meant by "debt" under Section 2(1)(ha)?

Debt as defined in section 2(g) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

What is included in the definition of "debt" under Section 2(1)(ha)(i)?

Unpaid portion of the purchase price of any tangible asset given on hire, financial lease, conditional sale or any other contract.

What is included in the definition of "debt" under Section 2(1)(ha)(ii)?

Any right, title or interest in any intangible asset or licence or assignment thereof securing payment of the unpaid purchase price or credit extended for acquisition or licence of such asset.

What is meant by "Debts Recovery Tribunal" under Section 2(1)(i)?

The Tribunal established under section 3(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

What is meant by "debt securities" under Section 2(1)(ia)?

Debt securities listed in accordance with the regulations made by the Securities and Exchange Board of India under the Securities and Exchange Board of India Act, 1992.

What is meant by "default" under Section 2(1)(j)?

Non-payment of debt or any other amount payable by the borrower as specified under clauses (i) and (ii).

What constitutes default under Section 2(1)(j)(i)?

Non-payment of any debt or other amount payable by the borrower to a secured creditor resulting in classification of the borrower's account as a non-performing asset.

What constitutes default under Section 2(1)(j)(ii)?

Non-payment of any debt or other amount payable with respect to debt securities after ninety days' notice demanding payment served by the debenture trustee or other authority in whose favour the security interest is created.

How many days' notice is required before default under Section 2(1)(j)(ii) arises?

Ninety days.

Who may serve the notice under Section 2(1)(j)(ii)?

The debenture trustee or any other authority in whose favour the security interest is created for the benefit of the holders of debt securities.

What is meant by "financial assistance" under Section 2(1)(k)?

Any loan or advance granted, debentures or bonds subscribed, guarantees given, letters of credit established or any other credit facility extended by any bank or financial institution.

What additional transactions are included within "financial assistance" under Section 2(1)(k)?

Funds provided for acquisition of a tangible asset on hire, financial lease, conditional sale or other contract, obtaining assignment or licence of an intangible asset, or purchase of debt securities.

What is meant by "financial asset" under Section 2(1)(l)?

Debt or receivables and the items included in clauses (i) to (vi).

What is included in "financial asset" under Section 2(1)(l)(i)?

A claim to any debt or receivables or part thereof, whether secured or unsecured.

What is included in "financial asset" under Section 2(1)(l)(ii)?

Any debt or receivables secured by mortgage of, or charge on, immovable property.

What is included in "financial asset" under Section 2(1)(l)(iii)?

A mortgage, charge, hypothecation or pledge of movable property.

What is included in "financial asset" under Section 2(1)(l)(iv)?

Any right or interest in the security underlying such debt or receivables, whether full or part.

What is included in "financial asset" under Section 2(1)(l)(v)?

Any beneficial interest in movable or immovable property or in debt or receivables, whether existing, future, accruing, conditional or contingent.

What is included in "financial asset" under Section 2(1)(l)(va)?

Any beneficial right, title or interest in a tangible asset given on hire, financial lease, conditional sale or other contract securing payment of the unpaid purchase price or credit extended for acquisition of such asset.

What is included in "financial asset" under Section 2(1)(l)(vb)?

Any right, title or interest in an intangible asset or licence or assignment thereof securing payment of the unpaid purchase price or credit extended for acquisition or licence of such intangible asset.

What is included in "financial asset" under Section 2(1)(l)(vi)?

Any financial assistance.

What is meant by "financial institution" under Section 2(1)(m)?

The institutions specified in clauses (i) to (iv) of Section 2(1)(m).

Which public financial institutions are included in the definition of "financial institution" under Section 2(1)(m)(i)?

Public financial institutions within the meaning of section 4A of the Companies Act, 1956.

Which institutions notified under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 are included in the definition of "financial institution"?

Institutions specified by the Central Government under section 2(h)(ii) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

Which international body is included in the definition of "financial institution" under Section 2(1)(m)(iii)?

The International Finance Corporation established under the International Finance Corporation (Status, Immunities and Privileges) Act, 1958.

Which debenture trustee is included in the definition of "financial institution" under Section 2(1)(m)(iiia)?

A debenture trustee registered with the Board and appointed for secured debt securities.

Which asset reconstruction company is included in the definition of "financial institution" under Section 2(1)(m)(iiib)?

An asset reconstruction company acting as such or managing a trust created for securitisation or asset reconstruction.

Which other institutions may be specified as financial institutions under Section 2(1)(m)(iv)?

Any other institution or non-banking financial company notified by the Central Government.

What is meant by "financial lease" under Section 2(1)(ma)?

A lease of a tangible asset under which the lessee becomes the owner at the expiry of the lease term or on payment of the agreed residual amount.

Which assets are covered under a "financial lease" under Section 2(1)(ma)?

Tangible assets other than negotiable instruments or negotiable documents.

What is meant by "hypothecation" under Section 2(1)(n)?

A charge on movable property created by a borrower in favour of a secured creditor without delivery of possession as security for financial assistance.

What charges are included within "hypothecation" under Section 2(1)(n)?

Floating charge and crystallisation of such charge into a fixed charge on movable property.

What is meant by "negotiable document" under Section 2(1)(na)?

A document embodying a right to delivery of tangible assets and satisfying the requirements of negotiability under law.

Which documents are specifically included in the definition of "negotiable document" under Section 2(1)(na)?

Warehouse receipt and bill of lading.

What is meant by "non-performing asset" under Section 2(1)(o)?

An asset or account of a borrower classified as sub-standard, doubtful or loss asset.

How is a non-performing asset classified where the bank or financial institution is regulated by a statutory authority under Section 2(1)(o)(a)?

In accordance with the directions or guidelines issued by such authority or body.

How is a non-performing asset classified in other cases under Section 2(1)(o)(b)?

In accordance with the directions or guidelines issued by the Reserve Bank.

What is meant by "notification" under Section 2(1)(p)?

A notification published in the Official Gazette.

What is meant by "obligor" under Section 2(1)(q)?

A person liable to the originator to pay a financial asset or discharge any obligation in respect of a financial asset and includes the borrower.

What obligations are covered under the definition of "obligor" under Section 2(1)(q)?

Existing, future, conditional or contingent obligations.

What is meant by "originator" under Section 2(1)(r)?

The owner of a financial asset acquired by an asset reconstruction company for securitisation or asset reconstruction.

What is meant by "prescribed" under Section 2(1)(s)?

Prescribed by rules made under this Act.

What is meant by "property" under Section 2(1)(t)?

Immovable property, movable property, debt, receivables and intangible assets specified in clauses (i) to (v).

What is included in "property" under Section 2(1)(t)(i)?

Immovable property.

What is included in "property" under Section 2(1)(t)(ii)?

Movable property.

What is included in "property" under Section 2(1)(t)(iii)?

Any debt or any right to receive payment of money, whether secured or unsecured.

What is included in "property" under Section 2(1)(t)(iv)?

Receivables, whether existing or future.

What intangible assets are included in "property" under Section 2(1)(t)(v)?

Know-how, patent, copyright, trade mark, licence, franchise or any other business or commercial right of similar nature as may be prescribed by the Central Government in consultation with the Reserve Bank.

What is meant by "qualified buyer" under Section 2(1)(u)?

A financial institution, insurance company, bank, State Financial Corporation, State Industrial Development Corporation, trustee, registered asset reconstruction company, asset management company investing on behalf of a mutual fund, foreign institutional investor, category of non-institutional investors specified by the Reserve Bank or any other body corporate specified by the Board.

What is meant by "Registrar of Companies" under Section 2(1)(w)?

The Registrar defined in section 2(40) of the Companies Act, 1956.

What is meant by "Reserve Bank" under Section 2(1)(x)?

The Reserve Bank of India constituted under section 3 of the Reserve Bank of India Act, 1934.

What is meant by "scheme" under Section 2(1)(y)?

A scheme inviting subscription to security receipts proposed to be issued by an asset reconstruction company.

What is meant by "securitisation" under Section 2(1)(z)?

Acquisition of financial assets by an asset reconstruction company from an originator by raising funds from qualified buyers through issue of security receipts representing undivided interest in such financial assets or otherwise.

What is meant by "security agreement" under Section 2(1)(zb)?

An agreement, instrument, document or arrangement under which security interest is created in favour of the secured creditor, including mortgage by deposit of title deeds.

What is meant by "secured asset" under Section 2(1)(zc)?

The property on which security interest is created.

Who is a "secured creditor" under Section 2(1)(zd)?

The persons specified in clauses (i) to (v) of Section 2(1)(zd).

Who is a secured creditor under Section 2(1)(zd)(i)?

Any bank or financial institution or consortium or group of banks or financial institutions holding any right, title or interest upon any tangible or intangible asset.

Who is a secured creditor under Section 2(1)(zd)(ii)?

A debenture trustee appointed by any bank or financial institution.

Who is a secured creditor under Section 2(1)(zd)(iii)?

An asset reconstruction company acting as such or managing a trust set up for securitisation or reconstruction.

Who is a secured creditor under Section 2(1)(zd)(iv)?

A debenture trustee registered with the Board and appointed for secured debt securities.

Who is a secured creditor under Section 2(1)(zd)(v)?

Any other trustee holding securities on behalf of a bank or financial institution in whose favour security interest is created for due repayment of financial assistance.

What is meant by "secured debt" under Section 2(1)(ze)?

A debt which is secured by any security interest.

What is meant by "security interest" under Section 2(1)(zf)?

Right, title or interest of any kind, other than those specified in section 31, upon property created in favour of any secured creditor.

What is excluded from the definition of "security interest" under Section 2(1)(zf)?

Rights, title or interest specified in section 31.

What is included in "security interest" under Section 2(1)(zf)(i)?

Any mortgage, charge, hypothecation, assignment or any right, title or interest in a tangible asset retained by the secured creditor as owner under hire, financial lease, conditional sale or any other contract securing payment of the unpaid purchase price or credit extended for acquisition of the asset.

What is included in "security interest" under Section 2(1)(zf)(ii)?

Any right, title or interest in an intangible asset or assignment or licence thereof securing payment of the unpaid purchase price or credit extended for acquisition or licence of the intangible asset.

What is meant by "security receipt" under Section 2(1)(zg)?

A receipt or other security issued by an asset reconstruction company to a qualified buyer under a scheme evidencing an undivided right, title or interest in the financial asset involved in securitisation.

What is meant by "sponsor" under Section 2(1)(zh)?

A person holding not less than ten per cent of the paid-up equity capital of an asset reconstruction company.

What is the minimum paid-up equity capital required to qualify as a sponsor under Section 2(1)(zh)?

Not less than ten per cent.

What is meant by "State Bank of India" under Section 2(1)(zi)?

The State Bank of India constituted under section 3 of the State Bank of India Act, 1955.

What is meant by "subsidiary bank" under Section 2(1)(zj)?

A subsidiary bank as defined in section 2(k) of the State Bank of India (Subsidiary Banks) Act, 1959.

How are words and expressions not defined in this Act to be construed under Section 2(2)?

They shall have the meanings assigned to them in the Indian Contract Act, 1872, the Transfer of Property Act, 1882, the Companies Act, 1956 or the Securities and Exchange Board of India Act, 1992, as applicable.

               CHAPTER - 2

REGULATION OF SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS OF BANKS AND FINANCIAL INSTITUTIONS

What is the subject matter of Section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Registration of asset reconstruction companies.

Can an asset reconstruction company commence or carry on the business of securitisation or asset reconstruction without obtaining a certificate of registration?

No, it shall first obtain a certificate of registration granted under this section.

What is the minimum net owned fund required for an asset reconstruction company under Section 3(1)(b)?

Not less than two crore rupees or such higher amount as the Reserve Bank may specify by notification.

Can the Reserve Bank prescribe different amounts of owned fund for different classes of asset reconstruction companies?

Yes, by notification.

Within what period must an existing asset reconstruction company apply for registration after the commencement of the Act?

Before the expiry of six months from the commencement of the Act.

Can an existing asset reconstruction company continue its business pending disposal of its registration application?

Yes, until the certificate of registration is granted or rejection of the application is communicated.

To whom shall an asset reconstruction company apply for registration under Section 3(2)?

The Reserve Bank.

In what manner shall an application for registration be made under Section 3(2)?

In such form and manner as specified by the Reserve Bank.

How may the Reserve Bank satisfy itself regarding an application for registration under Section 3(3)?

By inspection of the records or books of the asset reconstruction company or otherwise.

What condition regarding losses must an asset reconstruction company satisfy under Section 3(3)(a)?

It must not have incurred losses in any of the three preceding financial years.

What arrangement relating to financial assets must an asset reconstruction company have under Section 3(3)(b)?

Adequate arrangements for realisation of the financial assets acquired for securitisation or asset reconstruction.

What financial capability must an asset reconstruction company possess under Section 3(3)(b)?

It shall be able to pay periodical returns and redeem investments on their respective due dates made by qualified buyers or other persons.

What qualification must the directors of an asset reconstruction company possess under Section 3(3)(c)?

Adequate professional experience in matters relating to finance, securitisation and reconstruction.

What condition regarding conviction of directors is prescribed under Section 3(3)(e)?

No director shall have been convicted of any offence involving moral turpitude.

What condition must the sponsor of an asset reconstruction company satisfy under Section 3(3)(f)?

The sponsor must be a fit and proper person in accordance with the criteria specified in the Reserve Bank guidelines.

What prudential requirement must an asset reconstruction company satisfy under Section 3(3)(g)?

It must have complied with or be in a position to comply with the prudential norms specified by the Reserve Bank.

What additional requirement is prescribed under Section 3(3)(h)?

The asset reconstruction company must have complied with one or more conditions specified in the guidelines issued by the Reserve Bank.

When may the Reserve Bank grant a certificate of registration under Section 3(4)?

After being satisfied that the conditions specified in sub-section (3) are fulfilled.

Can the Reserve Bank impose conditions while granting a certificate of registration under Section 3(4)?

Yes, it may impose such conditions as it considers fit.

When may the Reserve Bank reject an application for registration under Section 3(5)?

If it is satisfied that the conditions specified in sub-section (3) are not fulfilled.

What opportunity must be given before rejecting an application for registration under Section 3(5)?

A reasonable opportunity of being heard.

For what changes is prior approval of the Reserve Bank mandatory under Section 3(6)?

Any substantial change in management, including appointment of any director, managing director or chief executive officer, change in the location of the registered office, or change in the company's name.

Whose decision on whether a change in management is substantial is final under the proviso to Section 3(6)?

The decision of the Reserve Bank.

What does the expression "substantial change in management" mean under the Explanation to Section 3?

Change in management by transfer of shares, change affecting the sponsorship in the company by transfer of shares, amalgamation, or transfer of the business of the company.

What is the subject matter of Section 4 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Cancellation of certificate of registration.

Who is empowered to cancel the certificate of registration of an asset reconstruction company under Section 4(1)?

The Reserve Bank.

When may the Reserve Bank cancel the certificate of registration under Section 4(1)(a)?

When the asset reconstruction company ceases to carry on the business of securitisation or asset reconstruction.

When may the Reserve Bank cancel the certificate of registration under Section 4(1)(b)?

When the asset reconstruction company ceases to receive or hold any investment from a qualified buyer.

When may the Reserve Bank cancel the certificate of registration under Section 4(1)(c)?

When the asset reconstruction company fails to comply with any condition subject to which the certificate of registration was granted.

When may the Reserve Bank cancel the certificate of registration under Section 4(1)(d)?

When the asset reconstruction company fails at any time to fulfil any of the conditions referred to in clauses (a) to (g) of sub-section (3) of section 3.

When may the Reserve Bank cancel the certificate of registration under Section 4(1)(e)(i)?

When the asset reconstruction company fails to comply with any direction issued by the Reserve Bank under this Act.

When may the Reserve Bank cancel the certificate of registration under Section 4(1)(e)(ii)?

When the asset reconstruction company fails to maintain accounts in accordance with the requirements of any law or any direction or order issued by the Reserve Bank under this Act.

When may the Reserve Bank cancel the certificate of registration under Section 4(1)(e)(iii)?

When the asset reconstruction company fails to submit or offer for inspection its books of account or other relevant documents when demanded by the Reserve Bank.

When may the Reserve Bank cancel the certificate of registration under Section 4(1)(e)(iv)?

When the asset reconstruction company fails to obtain the prior approval of the Reserve Bank required under sub-section (6) of section 3.

What opportunity must ordinarily be given before cancellation under clause (c), clause (d) or sub-clause (iv) of clause (e) of Section 4(1)?

The Reserve Bank shall give the asset reconstruction company an opportunity, on such terms as it may specify, to take necessary steps to comply with the provisions or fulfil the conditions.

When may the Reserve Bank dispense with the opportunity before cancellation under the proviso to Section 4(1)?

When it is of the opinion that delay in cancellation would be prejudicial to the public interest, the interests of the investors or the asset reconstruction company.

Who may appeal against an order cancelling the certificate of registration under Section 4(2)?

An aggrieved asset reconstruction company.

To whom does an appeal under Section 4(2) lie?

The Central Government.

Within what period must an appeal under Section 4(2) be preferred?

Within thirty days from the date on which the order of cancellation is communicated.

What opportunity must be given before rejecting an appeal under Section 4(2)?

A reasonable opportunity of being heard.

What is the status of an asset reconstruction company holding investments of qualified buyers whose registration application is rejected or certificate is cancelled?

It shall be deemed to be an asset reconstruction company until it repays the entire investments held by it together with interest, if any.

Within what period must such deemed asset reconstruction company repay the investments under Section 4(3)?

Within such period as the Reserve Bank may direct.

What is the subject matter of Section 5 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Acquisition of rights or interest in financial assets.

Notwithstanding what may an asset reconstruction company acquire financial assets under Section 5(1)?

Notwithstanding anything contained in any agreement or any other law for the time being in force.

Whose financial assets may be acquired by an asset reconstruction company under Section 5(1)?

The financial assets of any bank or financial institution.

How may an asset reconstruction company acquire financial assets under Section 5(1)(a)?

By issuing a debenture, bond or any other security in the nature of a debenture for agreed consideration on agreed terms and conditions.

How may an asset reconstruction company acquire financial assets under Section 5(1)(b)?

By entering into an agreement with the bank or financial institution for transfer of the financial assets on agreed terms and conditions.

Which documents are exempt from stamp duty under Section 5(1A)?

Documents executed by a bank or financial institution in favour of an asset reconstruction company acquiring financial assets for the purposes of asset reconstruction or securitisation.

Under which provision is the stamp duty exemption under Section 5(1A) granted?

Section 8F of the Indian Stamp Act, 1899.

When does the stamp duty exemption under Section 5(1A) not apply?

Where the acquisition of financial assets is for purposes other than asset reconstruction or securitisation.

What is the status of an asset reconstruction company upon acquisition of financial assets under Section 5(2)?

It shall be deemed to be the lender.

What happens to the rights of the bank or financial institution on acquisition of financial assets under Section 5(2)?

All its rights in relation to the financial assets vest in the asset reconstruction company.

What happens to the right, title or interest held by a bank or financial institution over tangible or intangible assets under Section 5(2A)?

Such right, title or interest vests in the asset reconstruction company on acquisition of the financial assets.

What type of security interests are covered under Section 5(2A)?

Rights, title or interest securing unpaid purchase price, obligations incurred, credit provided for acquisition of tangible assets, or assignment or licence of intangible assets.

What is the effect of acquisition on subsisting contracts and other instruments under Section 5(3)?

They continue in full force and effect against or in favour of the asset reconstruction company as if it were the original party or beneficiary.

Which instruments continue to have effect under Section 5(3)?

All contracts, deeds, bonds, agreements, powers-of-attorney, grants of legal representation, permissions, approvals, consents, no-objections and other instruments relating to the financial asset.

What is the effect of acquisition on pending suits, appeals or proceedings under Section 5(4)?

They shall not abate, be discontinued or be prejudicially affected by the acquisition.

Who may continue, prosecute and enforce pending suits, appeals or proceedings after acquisition under Section 5(4)?

The asset reconstruction company.

Can an asset reconstruction company seek substitution of its name in pending proceedings under Section 5(5)?

Yes, with the consent of the originator.

Before which authorities may an application for substitution be filed under Section 5(5)?

The Debts Recovery Tribunal, the Appellate Tribunal, any court or any other Authority.

What is the duty of the Debts Recovery Tribunal, Appellate Tribunal, court or Authority upon receiving an application under Section 5(5)?

It shall pass orders for substitution of the asset reconstruction company in the pending suit, appeal or other proceedings.

What is the subject matter of Section 5A of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Transfer of pending applications to any one of Debts Recovery Tribunals in certain cases.

When may an asset reconstruction company apply for transfer of pending applications under Section 5A(1)?

When the financial asset acquired comprises secured debts of more than one bank or financial institution and recovery applications are pending before two or more Debts Recovery Tribunals.

Who may apply for transfer of pending applications under Section 5A(1)?

The asset reconstruction company.

To whom shall the application for transfer under Section 5A(1) be made?

The Appellate Tribunal having jurisdiction over any of the Debts Recovery Tribunals in which the applications are pending.

What is the purpose of an application under Section 5A(1)?

Transfer of all pending applications to any one of the Debts Recovery Tribunals as the asset reconstruction company deems fit.

What opportunity must the Appellate Tribunal provide before passing an order under Section 5A(2)?

An opportunity of being heard to the parties to the application.

What order may the Appellate Tribunal pass under Section 5A(2)?

An order transferring all pending applications to any one of the Debts Recovery Tribunals.

What is the effect of an order passed by the Appellate Tribunal under Section 5A(2)?

It is binding on all the Debts Recovery Tribunals referred to in sub-section (1).

How is an order under Section 5A(2) treated under Section 5A(3)?

As if it had been passed by the Appellate Tribunal having jurisdiction over each such Debts Recovery Tribunal.

Notwithstanding which Act does Section 5A(3) operate?

The Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

How shall a recovery certificate issued by the Debts Recovery Tribunal after transfer under Section 5A(4) be executed?

In accordance with sub-section (23) of section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

Which provisions apply to the execution of a recovery certificate under Section 5A(4)?

Sub-section (23) of section 19 and the other provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

What is the subject matter of Section 6 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Notice to obligor and discharge of obligation of such obligor.

Who may give notice of acquisition of financial assets under Section 6(1)?

The bank or financial institution.

When may a bank or financial institution give notice of acquisition of financial assets under Section 6(1)?

If it considers appropriate.

To whom may notice of acquisition of financial assets be given under Section 6(1)?

The concerned obligor, any other concerned person and the concerned registering authority (including the Registrar of Companies).

To which registering authority may notice be given under Section 6(1)?

The registering authority in whose jurisdiction the mortgage, charge, hypothecation, assignment or other interest created on the financial assets had been registered, including the Registrar of Companies.

What must the obligor do on receipt of notice of acquisition of financial asset under Section 6(2)?

Make payment to the concerned asset reconstruction company.

What is the effect of payment made by the obligor to the asset reconstruction company after receipt of notice under Section 6(2)?

It is a full discharge to the obligor from all liability in respect of such payment relating to the financial asset specified in the notice.

What is the status of money or other property received by a bank or financial institution where no notice under Section 6(1) is given?

It constitutes monies or properties held in trust for the benefit of and on behalf of the asset reconstruction company.

For whose benefit are monies or properties held where no notice under Section 6(1) is given?

For the benefit of and on behalf of the asset reconstruction company.

What is the duty of the bank or financial institution regarding monies or properties received where no notice under Section 6(1) is given?

It shall forthwith make over or deliver such payment or property to the asset reconstruction company or its duly authorised agent.

Who may receive the payment or property on behalf of the asset reconstruction company under Section 6(3)?

Its agent duly authorised in this behalf.

What is the subject matter of Section 7 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Issue of security by raising of receipts or funds by asset reconstruction company.

Without prejudice to which enactments does Section 7(1) operate?

The Companies Act, 1956, the Securities Contracts (Regulation) Act, 1956 and the Securities and Exchange Board of India Act, 1992.

When may an asset reconstruction company offer security receipts under Section 7(1)?

After acquisition of any financial asset under sub-section (1) of section 5.

To whom may an asset reconstruction company offer security receipts under Section 7(1)?

Qualified buyers or such other category of investors, including non-institutional investors, as may be specified by the Reserve Bank in consultation with the Board.

In accordance with which laws shall security receipts be offered under Section 7(1)?

In accordance with the Companies Act, 1956, the Securities Contracts (Regulation) Act, 1956 and the Securities and Exchange Board of India Act, 1992.

How may an asset reconstruction company raise funds under Section 7(2)?

By formulating schemes for acquiring financial assets from qualified buyers.

What accounts must an asset reconstruction company maintain under Section 7(2)?

Separate and distinct accounts for each scheme in respect of every financial asset acquired out of investments made by a qualified buyer.

How must realisations of financial assets be applied under Section 7(2)?

Towards redemption of investments and payment of returns assured on such investments under the relevant scheme.

What may be the nature of the scheme under Section 7(2A)(a)?

A trust to be managed by the asset reconstruction company.

In what capacity does an asset reconstruction company hold assets or funds under Section 7(2A)(a)?

In trust for the benefit of the qualified buyers holding security receipts or from whom the funds are raised.

Which Act applies to the trust referred to in Section 7(2A)(a)?

The Indian Trusts Act, 1882, except to the extent inconsistent with this Act.

When are qualified buyers entitled to call a meeting under Section 7(3)?

In the event of non-realisation of financial assets under sub-section (2).

What minimum holding is required to call a meeting under Section 7(3)?

Security receipts of not less than seventy-five per cent of the total value of the security receipts issued under a scheme by the asset reconstruction company.

On whom is a resolution passed at a meeting under Section 7(3) binding?

The asset reconstruction company.

What procedure shall qualified buyers follow at a meeting under Section 7(4)?

As nearly as possible, the same procedure as is followed at meetings of the board of directors of the asset reconstruction company.

What is the subject matter of Section 8 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Exemption from registration of security receipt.

Notwithstanding which provision is the exemption under Section 8 granted?

Sub-section (1) of section 17 of the Registration Act, 1908.

Which security receipt is exempt from compulsory registration under Section 8(a)?

A security receipt issued by the asset reconstruction company under sub-section (1) of section 7 satisfying the conditions specified in Section 8(a).

What condition relating to immovable property must a security receipt satisfy to qualify for exemption under Section 8(a)?

It must not create, declare, assign, limit or extinguish any right, title or interest in immovable property except to the extent it entitles the holder to an undivided interest afforded by a registered instrument.

What is the nature of the holder's interest in immovable property permitted under Section 8(a)?

An undivided interest afforded by a registered instrument.

Is transfer of security receipts compulsorily registrable under Section 8(b)?

No, any transfer of security receipts shall not require compulsory registration.

What is the subject matter of Section 9 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Measures for assets reconstruction.

Whether the provisions of Section 9 are without prejudice to any other law for the time being in force?

Yes, the provisions of Section 9 are without prejudice to any other law for the time being in force.

Who may provide measures for the purposes of asset reconstruction under Section 9(1)?

An asset reconstruction company.

For what purpose may an asset reconstruction company provide measures under Section 9(1)?

For the purposes of asset reconstruction.

What measure relating to the management of the borrower's business may an asset reconstruction company adopt under Section 9(1)(a)?

Proper management of the business of the borrower by change in, or take over of, the management of the business of the borrower.

What measure relating to the borrower's business may an asset reconstruction company adopt under Section 9(1)(b)?

Sale or lease of a part or whole of the business of the borrower.

What measure relating to repayment of debts may an asset reconstruction company adopt under Section 9(1)(c)?

Rescheduling of payment of debts payable by the borrower.

What measure relating to security interest may an asset reconstruction company adopt under Section 9(1)(d)?

Enforcement of security interest in accordance with the provisions of this Act.

What measure relating to borrower's dues may an asset reconstruction company adopt under Section 9(1)(e)?

Settlement of dues payable by the borrower.

What measure relating to secured assets may an asset reconstruction company adopt under Section 9(1)(f)?

Taking possession of secured assets in accordance with the provisions of this Act.

What measure relating to debt conversion may an asset reconstruction company adopt under Section 9(1)(g)?

Conversion of any portion of debt into shares of a borrower company.

What is the effect of the proviso to Section 9(1)(g)?

Conversion of any part of debt into shares of a borrower company shall be deemed always to have been valid as if the provisions of the clause were in force at all material times.

Who is empowered to determine the policy for the purposes of Section 9(1)?

The Reserve Bank.

What directions may the Reserve Bank issue under Section 9(2)?

Necessary directions including directions for regulation of management of the business of the borrower and fees to be charged.

In accordance with whose policies and directions shall an asset reconstruction company take measures under Section 9(1)?

The policies and directions of the Reserve Bank determined under Section 9(2).

What is the subject matter of Section 10 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Other functions of asset reconstruction company.

Which asset reconstruction company may perform the functions specified under Section 10?

An asset reconstruction company registered under section 3.

For whom may an asset reconstruction company act as an agent under Section 10(1)(a)?

Any bank or financial institution.

For what purpose may an asset reconstruction company act as an agent under Section 10(1)(a)?

For recovering the dues of the bank or financial institution from the borrower.

On what basis may an asset reconstruction company act as an agent under Section 10(1)(a)?

On payment of such fee or charges as may be mutually agreed upon between the parties.

As whom may an asset reconstruction company act under Section 10(1)(b)?

As a manager referred to in clause (c) of sub-section (4) of section 13.

On what basis may an asset reconstruction company act as a manager under Section 10(1)(b)?

On such fee as may be mutually agreed upon between the parties.

When may an asset reconstruction company act as a receiver under Section 10(1)(c)?

If appointed by any court or tribunal.

When is an asset reconstruction company prohibited from acting as a manager?

When acting as a manager gives rise to any pecuniary liability.

Can an asset reconstruction company carry on any business other than securitisation or asset reconstruction without prior approval of the Reserve Bank?

No, except as otherwise provided in sub-section (1), prior approval of the Reserve Bank is required.

To which asset reconstruction company does the restriction under Section 10(2) apply?

An asset reconstruction company granted a certificate of registration under sub-section (4) of section 3.

Within what period must an asset reconstruction company cease carrying on any other business commenced on or before the commencement of the Act?

Within one year from the date of commencement of the Act.

Which businesses must an existing asset reconstruction company discontinue under the proviso to Section 10(2)?

Any business other than securitisation, asset reconstruction or the business referred to in sub-section (1).

What does the expression "asset reconstruction company" not include for the purposes of Section 10?

Its subsidiary.

What is the subject matter of Section 11 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Resolution of disputes.

What types of disputes are covered under Section 11?

Disputes relating to securitisation, reconstruction or non-payment of any amount due including interest.

Among whom must the dispute arise for Section 11 to apply?

Among the bank or financial institution or asset reconstruction company or qualified buyer.

How shall disputes covered under Section 11 be settled?

By conciliation or arbitration as provided in the Arbitration and Conciliation Act, 1996.

Which Act governs the conciliation or arbitration under Section 11?

The Arbitration and Conciliation Act, 1996.

What is the deemed consent of the parties under Section 11?

The parties shall be deemed to have consented in writing for determination of the dispute by conciliation or arbitration.

Do the provisions of the Arbitration and Conciliation Act, 1996 apply to disputes under Section 11?

Yes, the provisions of that Act shall apply accordingly.

What is the subject matter of Section 12 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Power of Reserve Bank to determine policy and issue directions.

When may the Reserve Bank determine policy and issue directions under Section 12(1)?

When it is satisfied that it is necessary or expedient in the public interest, to regulate the financial system to its advantage, or to prevent the affairs of any asset reconstruction company from being conducted detrimentally to investors or prejudicially to the company.

To whom may the Reserve Bank issue directions under Section 12(1)?

To all or any asset reconstruction company.

In relation to which matters may the Reserve Bank determine policy and issue directions under Section 12(1)?

Income recognition, accounting standards, provisions for bad and doubtful debts, capital adequacy based on risk weights for assets, and deployment of funds by the asset reconstruction company.

Is an asset reconstruction company bound to follow the policy determined and directions issued by the Reserve Bank under Section 12(1)?

Yes, it shall be bound to follow such policy and directions.

Does Section 12(2) prejudice the generality of the powers under Section 12(1)?

No, it is without prejudice to the generality of the powers under Section 12(1).

To whom may the Reserve Bank issue directions under Section 12(2)?

To any asset reconstruction company generally, to a class of asset reconstruction companies, or to any particular asset reconstruction company.

Regarding what may the Reserve Bank issue directions under Section 12(2)(a)?

The type of financial assets of a bank or financial institution that may be acquired, the procedure for acquisition, and their valuation.

Regarding what may the Reserve Bank issue directions under Section 12(2)(b)?

The aggregate value of financial assets that may be acquired by any asset reconstruction company.

Regarding what may the Reserve Bank issue directions under Section 12(2)(c)?

The fee and other charges that may be charged or incurred for management of financial assets acquired by any asset reconstruction company.

Regarding what may the Reserve Bank issue directions under Section 12(2)(d)?

Transfer of security receipts issued to qualified buyers.

What is the subject matter of Section 12A of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Power of Reserve Bank to call for statements and information.

Who is empowered to call for statements and information under Section 12A?

The Reserve Bank.

From whom may the Reserve Bank call for statements and information under Section 12A?

An asset reconstruction company.

When may the Reserve Bank direct an asset reconstruction company to furnish statements and information under Section 12A?

At any time.

Within what period must an asset reconstruction company furnish statements and information under Section 12A?

Within such time as may be specified by the Reserve Bank.

What may the Reserve Bank require an asset reconstruction company to furnish under Section 12A?

Such statements and information relating to the business or affairs of the asset reconstruction company as the Reserve Bank may specify.

Can the statements and information required under Section 12A relate to any business or affairs with which the asset reconstruction company is concerned?

Yes, they may include any business or affairs with which the company is concerned.

For what purpose may the Reserve Bank call for statements and information under Section 12A?

For the purposes of this Act, as the Reserve Bank may consider necessary or expedient.

What is the subject matter of Section 12B of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Power of Reserve Bank to carry out audit and inspection.

Who may carry out or cause to be carried out audit and inspection of an asset reconstruction company under Section 12B(1)?

The Reserve Bank.

For what purpose may the Reserve Bank carry out audit and inspection under Section 12B(1)?

For the purposes of this Act.

How frequently may the Reserve Bank carry out audit and inspection under Section 12B(1)?

From time to time.

What is the duty of an asset reconstruction company and its officers during audit or inspection under Section 12B(2)?

To provide assistance and cooperation to the Reserve Bank.

When may the Reserve Bank exercise its powers under Section 12B(3)?

When, on audit, inspection or otherwise, it is satisfied that the business of an asset reconstruction company is being conducted in a manner detrimental to public interest or to the interests of investors in security receipts issued by such company.

For what purpose may the Reserve Bank pass an order under Section 12B(3)?

For securing proper management of an asset reconstruction company.

What action may the Reserve Bank take under Section 12B(3)(a)?

Remove the Chairman or any director or appoint additional directors on the board of directors of the asset reconstruction company.

What action may the Reserve Bank take under Section 12B(3)(b)?

Appoint any of its officers as an observer to observe the working of the board of directors of the asset reconstruction company.

What procedural safeguard applies before removal of the Chairman or a director under Section 12B(3)(a)?

No order shall be made except after giving him an opportunity of being heard.

What is the duty of every director, officer or employee during an audit or inspection under Section 12B(4)?

To produce all books, accounts and other documents in his custody or control before the person conducting the audit or inspection.

What information must every director, officer or employee provide under Section 12B(4)?

Such statements and information relating to the affairs of the asset reconstruction company as may be required by the person conducting the audit or inspection.

Within what time must the books, documents, statements and information be furnished under Section 12B(4)?

Within the stipulated time specified by the person conducting the audit or inspection.

CHAPTER - 3

ENFORCEMENT OF SECURITY INTEREST

What is the subject matter of Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Enforcement of security interest.

Notwithstanding which provisions of the Transfer of Property Act, 1882 may a secured creditor enforce security interest under Section 13(1)?

Sections 69 and 69A of the Transfer of Property Act, 1882.

Can a secured creditor enforce security interest without the intervention of a court or tribunal under Section 13(1)?

Yes, in accordance with the provisions of this Act.

When may a secured creditor issue a demand notice under Section 13(2)?

When the borrower defaults in repayment of secured debt or any instalment thereof and the account is classified as a non-performing asset.

Within what period must the borrower discharge his liability under the notice issued under Section 13(2)?

Within sixty days from the date of the notice.

What is the consequence if the borrower fails to discharge liability within sixty days under Section 13(2)?

The secured creditor may exercise all or any of the rights under sub-section (4).

To whom does the requirement of classification of secured debt as a non-performing asset not apply under the proviso to Section 13(2)?

A borrower who has raised funds through issue of debt securities.

Who may enforce security interest where the borrower has raised funds through issue of debt securities?

The debenture trustee.

How shall the debenture trustee enforce security interest under the proviso to Section 13(2)?

In the same manner as provided under Section 13, with necessary modifications and in accordance with the terms and conditions of the security documents.

What particulars must be contained in the notice under Section 13(3)?

Details of the amount payable by the borrower and the secured assets intended to be enforced.

What must the secured creditor do if the borrower makes a representation or raises an objection under Section 13(3A)?

Consider the representation or objection.

Within what period must the secured creditor communicate reasons for non-acceptance under Section 13(3A)?

Within fifteen days of receipt of the representation or objection.

What must the secured creditor communicate if the borrower's representation or objection is not acceptable?

The reasons for non-acceptance of the representation or objection.

Do the reasons communicated under Section 13(3A) confer a right to approach the Debts Recovery Tribunal or the District Judge?

No, they do not confer such right.

When may the secured creditor take measures under Section 13(4)?

When the borrower fails to discharge his liability in full within the period specified in sub-section (2).

What measure may a secured creditor take under Section 13(4)(a)?

Take possession of the secured assets, including the right to transfer them by lease, assignment or sale.

What measure relating to management may a secured creditor take under Section 13(4)(b)?

Take over the management of the business of the borrower, including the right to transfer by lease, assignment or sale for realising the secured asset.

When can the right to transfer under Section 13(4)(b) be exercised?

Only where the substantial part of the business of the borrower is held as security for the debt.

What part of the business may be taken over where the business is severable under the second proviso to Section 13(4)(b)?

The part of the business relatable to the security for the debt.

What measure may a secured creditor take under Section 13(4)(c)?

Appoint a manager to manage the secured assets possession of which has been taken over.

Against whom may a notice be issued under Section 13(4)(d)?

Any person who has acquired secured assets from the borrower and from whom money is due or may become due to the borrower.

To what extent can payment be demanded under Section 13(4)(d)?

So much of the money as is sufficient to pay the secured debt.

What is the effect of payment made under Section 13(5)?

It gives the payer a valid discharge as if payment had been made to the borrower.

When may an authorised officer of the secured creditor bid for an immovable property under Section 13(5A)?

Where the sale has been postponed for want of a bid not less than the reserve price.

On whose behalf may an authorised officer bid under Section 13(5A)?

On behalf of the secured creditor.

How shall the purchase price be dealt with where the secured creditor becomes the purchaser under Section 13(5B)?

It shall be adjusted towards the amount of the secured creditor's claim.

Which provision applies to immovable property acquired by the secured creditor under Section 13(5C)?

Section 9 of the Banking Regulation Act, 1949, as far as may be.

What is the effect of transfer of secured assets under Section 13(6)?

The transferee acquires all rights in or in relation to the secured asset as if the transfer had been made by the owner.

From whom are costs, charges and expenses recoverable under Section 13(7)?

The borrower.

In what order shall money received by the secured creditor be applied under Section 13(7)?

First towards costs, charges and expenses, secondly towards discharge of the secured creditor's dues, and the residue to the person entitled thereto.

When can the borrower redeem the secured asset under Section 13(8)?

By tendering the dues together with all costs, charges and expenses before the date of publication of notice for public auction or inviting quotations or tender from public or private treaty.

What is the effect of tender of dues before publication of sale notice under Section 13(8)(i)?

The secured assets shall not be transferred by way of lease, assignment or sale.

What is the effect where transfer proceedings have already commenced before tender of dues under Section 13(8)(ii)?

No further step shall be taken for transfer by way of lease, assignment or sale of the secured assets.

What is the requirement for exercise of rights by secured creditors in cases of multiple or joint financing under Section 13(9)?

No secured creditor shall exercise the rights under sub-section (4) unless such exercise is agreed upon by secured creditors representing not less than sixty per cent in value of the amount outstanding as on the record date.

To what is Section 13(9) made subject?

The provisions of the Insolvency and Bankruptcy Code, 2016.

Is the action agreed upon under Section 13(9) binding on all secured creditors?

Yes, it is binding on all the secured creditors.

How shall the amount realised from the sale of secured assets of a company in liquidation be distributed under the first proviso to Section 13(9)?

In accordance with section 529A of the Companies Act, 1956.

What may a secured creditor of a company being wound up on or after the commencement of the Act retain under the second proviso to Section 13(9)?

The sale proceeds of the secured assets after depositing the workmen's dues with the liquidator in accordance with section 529A of the Companies Act, 1956.

What is the duty of the liquidator under the third proviso to Section 13(9)?

To intimate the secured creditor of the workmen's dues or, if they cannot be ascertained, the estimated amount of such dues.

What may a secured creditor do where the workmen's dues cannot be ascertained under the third proviso to Section 13(9)?

Retain the sale proceeds after depositing the estimated amount of workmen's dues with the liquidator.

What is the liability of the secured creditor after depositing estimated workmen's dues under the fourth proviso to Section 13(9)?

To pay the balance of the workmen's dues or receive the excess amount, if any, deposited with the liquidator.

What undertaking must a secured creditor furnish under the fifth proviso to Section 13(9)?

An undertaking to the liquidator to pay the balance of the workmen's dues, if any.

What does "record date" mean under the Explanation to Section 13(9)?

The date agreed upon by the secured creditors representing not less than sixty per cent in value of the amount outstanding on such date.

What does "amount outstanding" include under the Explanation to Section 13(9)?

Principal, interest and any other dues payable by the borrower to the secured creditor in respect of the secured asset as per the books of account of the secured creditor.

What remedy is available where the sale proceeds do not fully satisfy the dues of the secured creditor under Section 13(10)?

The secured creditor may file an application before the Debts Recovery Tribunal having jurisdiction or a competent court for recovery of the balance amount from the borrower.

In what manner shall an application under Section 13(10) be made?

In the form and manner as may be prescribed.

Can a secured creditor proceed against guarantors or sell pledged assets without first taking measures under Section 13(4)?

Yes, without prejudice to the rights under this section, the secured creditor may proceed against the guarantors or sell the pledged assets without first taking the measures specified in clauses (a) to (d) of sub-section (4).

By whom may the rights of a secured creditor under the Act be exercised under Section 13(12)?

One or more officers authorised by the secured creditor.

In what manner shall the rights under Section 13(12) be exercised?

In such manner as may be prescribed.

What restriction is imposed on the borrower after receipt of the notice under Section 13(2)?

The borrower shall not transfer by sale, lease or otherwise, except in the ordinary course of business, any secured asset referred to in the notice without the prior written consent of the secured creditor.

What is the subject matter of Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured asset.

When may a secured creditor make a request under Section 14(1)?

When possession of secured assets is required to be taken or any secured asset is required to be sold or transferred under this Act.

To whom may a secured creditor make a request under Section 14(1)?

The Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction the secured asset or related documents are situated or found.

For what purpose may a request be made under Section 14(1)?

For taking possession or control of the secured assets.

What is the duty of the Chief Metropolitan Magistrate or District Magistrate under Section 14(1)(a)?

To take possession of the secured asset and the documents relating thereto.

What is the duty of the Chief Metropolitan Magistrate or District Magistrate under Section 14(1)(b)?

To forward the secured asset and the documents relating thereto to the secured creditor.

What must accompany an application made by the secured creditor under the first proviso to Section 14(1)?

An affidavit duly affirmed by the authorised officer of the secured creditor.

What must the affidavit state regarding the financial assistance under Section 14(1), first proviso, clause (i)?

The aggregate amount of financial assistance granted and the total claim of the bank as on the date of filing the application.

What must the affidavit declare regarding the security interest under clause (ii)?

That the borrower has created security interest over various properties, the bank or financial institution holds a valid and subsisting security interest over them, and the claim is within the limitation period.

What must the affidavit specify regarding the secured properties under clause (iii)?

The details of the properties over which the borrower has created security interest.

What must the affidavit declare regarding default under clause (iv)?

That the borrower has committed default in repayment of the financial assistance aggregating the specified amount.

What must the affidavit declare regarding the borrower's account under clause (v)?

That the account has been classified as a non-performing asset.

What must the affidavit affirm regarding the demand notice under clause (vi)?

That the sixty days' notice under Section 13(2) demanding payment has been served on the borrower.

What must the affidavit state regarding the borrower's objection under clause (vii)?

That the objection or representation has been considered and reasons for non-acceptance have been communicated to the borrower.

What must the affidavit declare regarding entitlement to possession under clause (viii)?

That despite the notice the borrower has not repaid the financial assistance and the authorised officer is entitled to take possession under Sections 13(4) and 14.

What must the affidavit declare regarding compliance under clause (ix)?

That the provisions of this Act and the rules made thereunder have been complied with.

What must the Chief Metropolitan Magistrate or District Magistrate do after receiving the affidavit?

After satisfying himself as to its contents, pass suitable orders for taking possession of the secured assets.

Within what period should the order ordinarily be passed after receipt of the application?

Within thirty days from the date of the application.

Can the period for passing the order be extended beyond thirty days?

Yes, for reasons beyond the control of the Chief Metropolitan Magistrate or District Magistrate, after recording reasons in writing.

What is the maximum period within which the order may be passed after extension?

Not exceeding sixty days in the aggregate from the date of the application.

To which proceedings does the requirement of filing the affidavit not apply?

Proceedings pending before the District Magistrate or the Chief Metropolitan Magistrate on the date of commencement of the amendment.

Whom may the District Magistrate or Chief Metropolitan Magistrate authorise under Section 14(1A)?

Any officer subordinate to him.

For what purposes may a subordinate officer be authorised under Section 14(1A)?

To take possession of the secured assets and documents relating thereto and to forward them to the secured creditor.

What powers does the Chief Metropolitan Magistrate or District Magistrate have to secure compliance under Section 14(2)?

To take or cause to be taken such steps and use or cause to be used such force as may, in his opinion, be necessary.

Can acts done under Section 14 be questioned before any court or authority?

No, no act of the Chief Metropolitan Magistrate, District Magistrate or an officer authorised by them done under this section shall be called in question in any court or before any authority.

What is the subject matter of Section 15 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Manner and effect of take over of management.

When does Section 15 apply?

When the management of the business of a borrower is taken over by an asset reconstruction company under section 9(a) or by a secured creditor under section 13(4)(b).

How may the secured creditor appoint directors or an administrator under Section 15(1)?

By publishing a notice in one English newspaper and one Indian language newspaper circulating where the principal office of the borrower is situated.

Whom may the secured creditor appoint where the borrower is a company under Section 15(1)(a)?

Such persons as it thinks fit to be directors of the borrower in accordance with the Companies Act, 1956.

Whom may the secured creditor appoint where the borrower is not a company under Section 15(1)(b)?

Such persons as it thinks fit to be the administrator of the business of the borrower.

What is the effect of publication of notice on existing directors or persons in control under Section 15(2)(a)?

They shall be deemed to have vacated their offices.

What is the effect of publication of notice on management contracts under Section 15(2)(b)?

Any contract of management with the director or manager shall be deemed to be terminated.

What is the duty of directors or administrators appointed under Section 15(2)(c)?

To take into their custody or control all the property, effects and actionable claims of the borrower.

From when are the borrower's property and effects deemed to be in the custody of the directors or administrators under Section 15(2)(c)?

From the date of publication of the notice.

What powers do the directors or administrators appointed under Section 15(2)(d) possess?

They alone are entitled to exercise all the powers of the directors or persons exercising superintendence, direction and control of the business of the borrower.

From what sources may the powers exercised by the appointed directors or administrators arise under Section 15(2)(d)?

From the memorandum or articles of association of the borrower company or from any other source whatsoever.

Can shareholders or any other person appoint directors after takeover of management under Section 15(3)(a)?

No, it shall not be lawful to nominate or appoint any person as a director.

Can resolutions passed by shareholders take effect after takeover under Section 15(3)(b)?

Only with the approval of the secured creditor.

Can proceedings for winding up or appointment of a receiver be instituted after takeover under Section 15(3)(c)?

Only with the consent of the secured creditor.

When must the secured creditor restore the management of the business to the borrower under Section 15(4)?

On realisation of the debt in full.

When is the secured creditor not liable to restore the management under the proviso to Section 15(4)?

Where jointly with other secured creditors, an asset reconstruction company, financial institution or other assignee, it has converted part of its debt into shares and thereby acquired controlling interest in the borrower company.

What is the subject matter of Section 16 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

No compensation to directors for loss of office.

Notwithstanding what does Section 16(1) operate?

Anything to the contrary contained in any contract or any other law for the time being in force.

Who is not entitled to compensation under Section 16(1)?

The managing director, any other director, a manager or any person in charge of the management of the business of the borrower.

For what is compensation barred under Section 16(1)?

Loss of office or premature termination under this Act of any contract of management entered into with the borrower.

Does Section 16(2) affect the right to recover moneys otherwise than by way of compensation?

No, it does not affect such right.

What moneys may be recovered under Section 16(2)?

Moneys recoverable from the business of the borrower otherwise than by way of compensation.

What is the subject matter of Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Application against measures to recover secured debts.

Who may make an application under Section 17(1)?

Any person, including the borrower, aggrieved by any of the measures referred to in Section 13(4).

Against whose measures may an application under Section 17(1) be made?

Measures taken by the secured creditor or his authorised officer under this Chapter.

To which authority shall an application under Section 17(1) be made?

The Debts Recovery Tribunal having jurisdiction in the matter.

Within what period must an application under Section 17(1) be filed?

Within forty-five days from the date on which the measure was taken.

What must accompany an application under Section 17(1)?

Such fee as may be prescribed.

Can different fees be prescribed for different applicants under the proviso to Section 17(1)?

Yes, different fees may be prescribed for the borrower and for a person other than the borrower.

Does communication of reasons for rejecting the borrower's representation under Section 13(3A) entitle the borrower to file an application under Section 17(1)?

No, it does not.

Does the likely action communicated by the secured creditor under Section 13(3A) give a right to apply under Section 17(1)?

No, it does not.

Before which Debts Recovery Tribunal shall an application be filed under Section 17(1A)(a)?

The Tribunal within whose local limits the cause of action, wholly or in part, arises.

Before which Debts Recovery Tribunal may an application be filed under Section 17(1A)(b)?

The Tribunal within whose local limits the secured asset is located.

Before which Debts Recovery Tribunal may an application be filed under Section 17(1A)(c)?

The Tribunal within whose local limits the branch or other office of the bank or financial institution maintaining the account in which the debt is outstanding is situated.

What shall the Debts Recovery Tribunal examine under Section 17(2)?

Whether the measures under Section 13(4) taken by the secured creditor are in accordance with this Act and the rules made thereunder.

When may the Debts Recovery Tribunal grant relief under Section 17(3)?

When it concludes that the measures under Section 13(4) are not in accordance with this Act and the rules made thereunder and restoration of management or possession is required.

What may the Debts Recovery Tribunal declare under Section 17(3)(a)?

The recourse to one or more measures under Section 13(4) as invalid.

What may the Debts Recovery Tribunal restore under Section 17(3)(b)?

Possession of the secured assets or management of the secured assets to the borrower or other aggrieved person.

What other power does the Debts Recovery Tribunal have under Section 17(3)(c)?

To pass such other direction as it considers appropriate and necessary in relation to the recourse taken under Section 13(4).

What is the effect if the Debts Recovery Tribunal declares the secured creditor's action to be in accordance with the Act under Section 17(4)?

The secured creditor shall be entitled to take recourse to one or more of the measures specified under Section 13(4) to recover the secured debt.

Does Section 17(4) operate notwithstanding anything contained in any other law?

Yes, it operates notwithstanding anything contained in any other law for the time being in force.

What jurisdiction does the Debts Recovery Tribunal have where tenancy or leasehold rights are claimed under Section 17(4A)?

It has jurisdiction to examine the validity of such tenancy or lease for the purposes of enforcement of security interest.

When can the Debts Recovery Tribunal examine tenancy or leasehold rights under Section 17(4A)?

When any person claiming such rights files an application under Section 17(1).

What must the Debts Recovery Tribunal examine before deciding tenancy or leasehold claims under Section 17(4A)?

The facts of the case and the evidence produced by the parties.

Whether the Debts Recovery Tribunal can examine if the lease or tenancy has expired or stood determined under Section 17(4A)?

Yes.

Whether the Debts Recovery Tribunal can examine if the lease or tenancy is contrary to Section 65A of the Transfer of Property Act, 1882 under Section 17(4A)?

Yes.

Whether the Debts Recovery Tribunal can examine if the lease or tenancy is contrary to the terms of the mortgage under Section 17(4A)?

Yes.

Whether the Debts Recovery Tribunal can examine if the lease or tenancy was created after issuance of the notice under Section 13(2)?

Yes.

What power does the Debts Recovery Tribunal have if it is satisfied that the tenancy or lease falls under any of the grounds specified in Section 17(4A)(i)?

It may pass such order as it deems fit in accordance with the provisions of this Act.

Does Section 17(4A) operate notwithstanding anything contained in any other law?

Yes.

Within what period should an application under Section 17(1) ordinarily be disposed of by the Debts Recovery Tribunal under Section 17(5)?

Within sixty days from the date of the application.

Can the Debts Recovery Tribunal extend the period for disposal under Section 17(5)?

Yes, for reasons recorded in writing.

What is the maximum period for pendency of an application before the Debts Recovery Tribunal under Section 17(5)?

Four months from the date of making the application.

What remedy is available if the Debts Recovery Tribunal does not dispose of the application within four months under Section 17(6)?

Any party may apply to the Appellate Tribunal for a direction for expeditious disposal.

In what form shall an application under Section 17(6) be made to the Appellate Tribunal?

In such form as may be prescribed.

What order may the Appellate Tribunal pass on an application under Section 17(6)?

An order directing expeditious disposal of the pending application by the Debts Recovery Tribunal.

In accordance with which law shall the Debts Recovery Tribunal dispose of applications under Section 17(7)?

The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and the rules made thereunder, as far as may be.

When does Section 17(7) apply?

Save as otherwise provided in this Act.

What was the subject matter of the omitted Section 17A of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Making of application to Court of District Judge in certain cases.

How has Section 17A of the Act been treated?

It has been omitted.

By which Order was Section 17A omitted?

The Jammu and Kashmir Reorganization (Adaptation of Central Laws) Order, 2020.

By which other Order was the omission of Section 17A adapted?

The Union Territory of Ladakh Reorganisation (Adaptation of Central Laws) Order, 2020.

What is the subject matter of Section 18A of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Validation of fees levied.

Which fees are validated under Section 18A?

Fees levied and collected for preferring an appeal to the Debts Recovery Tribunal or the Appellate Tribunal before the commencement of the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2004.

What is the legal effect of Section 18A?

Such fees shall be deemed always to have been levied and collected in accordance with law.

On what legal fiction is the validation under Section 18A based?

As if the amendments made to Sections 17 and 18 by sections 10 and 12 of the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2004 were in force at all material times.

What was the subject matter of the omitted Section 18B of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Appeal to High Court in certain cases.

How has Section 18B of the Act been treated?

It has been omitted.

By which Order was Section 18B omitted?

The Jammu and Kashmir Reorganization (Adaptation of Central Laws) Order, 2020.

By which other Order was the omission of Section 18B adapted?

The Union Territory of Ladakh Reorganisation (Adaptation of Central Laws) Order, 2020.

What is the subject matter of Section 18C of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Right to lodge a caveat.

When may a caveat be lodged under Section 18C(1)?

Where an application or appeal is expected to be made or has been made under Section 17(1), Section 17A, Section 18(1) or Section 18B.

Who may lodge a caveat under Section 18C(1)?

The secured creditor or any person claiming a right to appear before the Tribunal, Court of District Judge, Appellate Tribunal or High Court.

In respect of what may a caveat be lodged under Section 18C(1)?

The application or appeal.

What is the duty of a secured creditor who lodges a caveat under Section 18C(2)(a)?

To serve notice of the caveat by registered post with acknowledgement due on the person by whom the application has been or is expected to be made.

What is the duty of any other person who lodges a caveat under Section 18C(2)(b)?

To serve notice of the caveat by registered post with acknowledgement due on the person by whom the application has been or is expected to be made.

What is the duty of the Tribunal, District Judge, Appellate Tribunal or High Court after a caveat has been lodged and an application or appeal is filed under Section 18C(3)?

To serve notice of the application or appeal on the caveator.

What is the duty of the applicant or appellant after receiving notice of the caveat under Section 18C(4)?

To periodically furnish the caveator with a copy of the application or appeal and copies of any paper or document filed or to be filed in support thereof.

For how long does a caveat remain in force under Section 18C(5)?

Ninety days from the date on which it was lodged.

When does a caveat continue beyond ninety days under Section 18C(5)?

It does not continue beyond ninety days unless the application or appeal referred to in Section 18C(1) has been made before the expiry of that period.

What is the subject matter of Section 19 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Right of borrower to receive compensation and costs in certain cases.

When does the right to compensation under Section 19 arise?

When the Debts Recovery Tribunal, Court of District Judge, Appellate Tribunal or High Court holds that possession of the secured assets by the secured creditor is not in accordance with this Act and the rules made thereunder.

On which proceedings can relief under Section 19 be granted?

An application under Section 17 or Section 17A or an appeal under Section 18 or Section 18A.

What must the adjudicating authority direct before compensation can be awarded under Section 19?

Return of the secured assets to the concerned borrower or other aggrieved person who filed the application or appeal.

Who is entitled to compensation and costs under Section 19?

The concerned borrower or any other aggrieved person who filed the application under Section 17 or 17A or the appeal under Section 18 or 18A.

Who determines the compensation and costs payable under Section 19?

The Debts Recovery Tribunal, Court of District Judge, Appellate Tribunal or the High Court referred to in Section 18B.

What is the basis for awarding compensation and costs under Section 19?

The possession of the secured assets by the secured creditor being held to be not in accordance with this Act and the rules made thereunder.

CHAPTER - 4

CENTRAL REGISTRY

What is the subject matter of Section 20 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Central Registry.

Who may set up or cause to be set up the Central Registry under Section 20(1)?

The Central Government, by notification.

From when may the Central Registry be set up under Section 20(1)?

From such date as may be specified in the notification.

What is the name of the registry established under Section 20(1)?

The Central Registry.

Does the Central Registry have its own seal under Section 20(1)?

Yes, it has its own seal.

For what purpose is the Central Registry established under Section 20(1)?

For registration of transactions of securitisation and reconstruction of financial assets and creation of security interest under this Act.

Who specifies the location of the head office of the Central Registry under Section 20(2)?

The Central Government.

Why may branch offices of the Central Registry be established under Section 20(2)?

To facilitate registration of transactions referred to in Section 20(1).

Who may establish branch offices of the Central Registry under Section 20(2)?

The Central Government.

Where may branch offices of the Central Registry be established under Section 20(2)?

At such other places as the Central Government may think fit.

Who may define the territorial limits of an office of the Central Registry under Section 20(3)?

The Central Government, by notification.

What may the Central Government define under Section 20(3)?

The territorial limits within which an office of the Central Registry may exercise its functions.

Are the provisions relating to the Central Registry in addition to other registration laws under Section 20(4)?

Yes, they are in addition to and not in derogation of such laws.

Which Acts are specifically mentioned in Section 20(4) as remaining unaffected by the provisions relating to the Central Registry?

The Registration Act, 1908, the Companies Act, 1956, the Merchant Shipping Act, 1958, the Patents Act, 1970, the Motor Vehicles Act, 1988, the Designs Act, 2000 and any other law requiring registration of charges.

Do the provisions relating to the Central Registry affect the priority or validity of charges under other registration laws?

No, they do not affect the priority or validity of charges under those Acts or laws.

What is the subject matter of Section 20A of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Integration of registration systems with Central Registry.

Who may integrate registration records with the Central Registry under Section 20A(1)?

The Central Government.

For what purpose may registration systems be integrated with the Central Registry under Section 20A(1)?

For providing a Central database.

With whom shall the Central Government consult before integrating registration systems under Section 20A(1)?

State Governments or other authorities operating registration systems.

Which registration systems may be integrated with the Central Registry under Section 20A(1)?

Registration systems recording rights over any property or creation, modification or satisfaction of any security interest on such property.

In what manner shall registration records be integrated with the Central Registry under Section 20A(1)?

In such manner as may be prescribed.

What does "registration records" include under the Explanation to Section 20A(1)?

Records of registration under the Companies Act, 2013, the Registration Act, 1908, the Merchant Shipping Act, 1958, the Motor Vehicles Act, 1988, the Patents Act, 1970, the Designs Act, 2000 or other records under any other law for the time being in force.

What must the Central Government do after integration of registration systems under Section 20A(2)?

Notify the date of integration of registration systems and the date from which the integrated records shall be available.

How is the date of integration declared under Section 20A(2)?

By notification.

From what date shall the integrated records be available under Section 20A(2)?

From the date notified by the Central Government.

What is the effect of integration under Section 20A(2) on security interests registered under other registration systems?

They shall be deemed to be registered with the Central Registry for the purposes of this Act from the notified date.

What is the subject matter of Section 20B of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Delegation of powers.

Who may delegate powers and functions under Section 20B?

The Central Government.

How may the Central Government delegate its powers under Section 20B?

By notification.

To whom may the powers and functions under Section 20B be delegated?

The Reserve Bank.

Under which Chapter may the powers and functions be delegated under Section 20B?

The Chapter relating to the Central Registry.

In relation to what matters may powers be delegated under Section 20B?

Establishment, operations and regulation of the Central Registry.

Are delegated powers under Section 20B subject to any conditions?

Yes, they are subject to such terms and conditions as may be prescribed.

What is the subject matter of Section 21 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Central Registrar.

Who may appoint the Central Registrar under Section 21(1)?

The Central Government.

How is the Central Registrar appointed under Section 21(1)?

By notification.

For what purpose is the Central Registrar appointed under Section 21(1)?

For registration of transactions relating to securitisation, reconstruction of financial assets and security interest created over properties.

By what designation is the person appointed under Section 21(1) known?

The Central Registrar.

Who may appoint other officers under Section 21(2)?

The Central Government.

For what purpose may other officers be appointed under Section 21(2)?

For discharging the functions of the Central Registrar under this Act.

Under whose superintendence and direction do the officers appointed under Section 21(2) function?

The Central Registrar.

Who determines the designations of the officers appointed under Section 21(2)?

The Central Government.

Who authorises the functions to be discharged by the officers appointed under Section 21(2)?

The Central Registrar.

When may the Central Registrar authorise the officers to discharge his functions under Section 21(2)?

From time to time.

What is the subject matter of Section 22 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Register of securitisation, reconstruction and security interest transactions.

What record is required to be kept under Section 22(1)?

The Central Register.

Where shall the Central Register be kept under Section 22(1)?

At the head office of the Central Registry.

For what purpose is the Central Register maintained under Section 22(1)?

For entering particulars of transactions relating to securitisation of financial assets, reconstruction of financial assets and creation of security interest.

What particulars relating to securitisation are entered in the Central Register under Section 22(1)(a)?

Transactions relating to securitisation of financial assets.

What particulars relating to reconstruction are entered in the Central Register under Section 22(1)(b)?

Transactions relating to reconstruction of financial assets.

What particulars relating to security are entered in the Central Register under Section 22(1)(c)?

Transactions relating to creation of security interest.

Can the Central Registrar maintain the Central Register in electronic form under Section 22(2)?

Yes, wholly or partly in computer, floppies, diskettes or any other electronic form, subject to prescribed safeguards.

What safeguards apply to maintenance of the Central Register in electronic form under Section 22(2)?

Such safeguards as may be prescribed.

How shall a reference to an entry in the Central Register be construed where it is maintained electronically under Section 22(3)?

As a reference to an entry maintained in computer or any other electronic form.

Under whose control and management shall the Central Register be kept under Section 22(4)?

The Central Registrar.

What is the subject matter of Section 23 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Filing of transactions of securitisation, reconstruction and creation of security interest.

Which transactions are required to be filed with the Central Registrar under Section 23(1)?

Every transaction of securitisation, asset reconstruction or creation of security interest.

With whom shall the particulars of transactions under Section 23(1) be filed?

The Central Registrar.

In what manner shall particulars be filed under Section 23(1)?

In the manner as may be prescribed.

Is any fee payable for filing particulars under Section 23(1)?

Yes, such fee as may be prescribed.

What power does the Central Government have regarding subsisting transactions under the proviso to Section 23(1)?

It may, by notification, require registration of all transactions of securitisation, asset reconstruction or creation of security interest subsisting on or before the date of establishment of the Central Registry.

Within what period must subsisting transactions be registered under the proviso to Section 23(1)?

Within such period as may be prescribed in the notification.

Is any fee payable for registration of subsisting transactions under the proviso to Section 23(1)?

Yes, on payment of such fees as may be prescribed.

What power does the Central Government have under Section 23(2)?

It may, by notification, require registration of transactions relating to different types of security interest created on different kinds of property with the Central Registry.

What may the Central Government prescribe by rules under Section 23(3)?

Forms for registration of different types of security interest and the fee to be charged for such registration.

What is the subject matter of Section 24 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Modification of security interest registered under this Act.

When does Section 24 apply?

When the terms or conditions, or the extent or operation of any security interest registered under this Chapter are modified.

Whose duty is it to report modification of a registered security interest under Section 24?

The asset reconstruction company or the secured creditor, as the case may be.

To whom shall particulars of the modification be sent under Section 24?

The Central Registrar.

What particulars are required to be sent under Section 24?

The particulars of the modification of the security interest.

Which provisions apply to the registration of a modification under Section 24?

The provisions of this Chapter relating to registration of a security interest.

What is the subject matter of Section 25 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Asset reconstruction company or secured creditors to report satisfaction of security interest.

Who is required to intimate the Central Registrar about payment or satisfaction of security interest under Section 25(1)?

The asset reconstruction company or the secured creditor, as the case may be.

What must be intimated to the Central Registrar under Section 25(1)?

Payment or satisfaction in full of any security interest requiring registration under this Chapter.

Within what time must intimation of payment or satisfaction be given under Section 25(1)?

Within thirty days from the date of such payment or satisfaction.

What shall the Central Registrar do on receipt of intimation under Section 25(1A)?

Order that a memorandum of satisfaction be entered in the Central Register.

What shall the Central Registrar do if the borrower intimates that payment or satisfaction should not be recorded under Section 25(2)?

Issue a notice to the asset reconstruction company or secured creditor to show cause.

Within what time must cause be shown under Section 25(2)?

Within the time specified in the notice, not exceeding fourteen days.

What shall the Central Registrar do if no cause is shown under Section 25(3)?

Order that a memorandum of satisfaction be entered in the Central Register.

What shall the Central Registrar do if cause is shown under Section 25(4)?

Record a note to that effect in the Central Register and inform the borrower.

What is the subject matter of Section 26 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Right to inspect particulars of securitisation, reconstruction and security interest transactions.

What particulars are open for inspection under Section 26(1)?

Particulars of securitisation, reconstruction or security interest entered in the Central Register under section 22.

During what time can the Central Register be inspected under Section 26(1)?

During the business hours.

Who may inspect the Central Register under Section 26(1)?

Any person.

Is any fee payable for inspection under Section 26(1)?

Yes, such fees as may be prescribed.

What additional mode of inspection is provided under Section 26(2)?

Inspection of the Central Register maintained in electronic form through electronic media.

During what time can the electronically maintained Central Register be inspected under Section 26(2)?

During the business hours.

Who may inspect the electronically maintained Central Register under Section 26(2)?

Any person.

Is any fee payable for electronic inspection under Section 26(2)?

Yes, such fees as may be prescribed.

What is the subject matter of Section 26A of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Rectification by Central Government in matters of registration, modification and satisfaction.

When may the Central Government grant relief under Section 26A(1)(a)?

When omission or misstatement relating to registration, modification or satisfaction was accidental, due to inadvertence, some other sufficient cause, or is not of a nature to prejudice the position of creditors.

What omissions or misstatements are covered under Section 26A(1)(a)?

Omission to file particulars or omission or misstatement relating to transactions of securitisation, asset reconstruction, security interest, modification, satisfaction or other entry under sections 23, 24 or 25.

When may the Central Government grant relief under Section 26A(1)(b)?

When it is just and equitable to grant relief on other grounds.

Who may apply for relief under Section 26A(1)?

A secured creditor, an asset reconstruction company or any other person interested.

On what basis may the Central Government grant relief under Section 26A(1)?

On such terms and conditions as it considers just and expedient.

What directions may the Central Government issue under Section 26A(1)?

It may extend the time for filing particulars for registration, modification or satisfaction, or direct rectification of the omission or misstatement.

What is the effect of an order extending time for registration under Section 26A(2)?

It shall not prejudice any rights acquired in respect of the property concerned or financial asset before the transaction is actually registered.

CHAPTER IVA

REGISTRATION BY SECURED CREDITORS AND OTHER CREDITORS

What is the subject matter of Section 26B of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Registration by secured creditors and other creditors.

What power is conferred on the Central Government under Section 26B(1)?

It may, by notification, extend the provisions of Chapter IV relating to the Central Registry to all creditors other than secured creditors.

For what purpose may Chapter IV be extended under Section 26B(1)?

For registration of creation, modification or satisfaction of any security interest over any property of the borrower to secure repayment of financial assistance.

Who may file particulars with the Central Registry after notification under Section 26B(2)?

Any creditor, including a secured creditor.

What particulars may be filed under Section 26B(2)?

Particulars of transactions relating to creation, modification or satisfaction of any security interest.

In what manner shall particulars be filed under Section 26B(2)?

In such form and manner as may be prescribed.

Can a creditor other than a secured creditor enforce security under this Act merely by registering particulars under Section 26B(3)?

No, such creditor is not entitled to exercise any right of enforcement of securities under this Act.

Who is required to file attachment orders with the Central Registry under Section 26B(4)?

Every authority or officer of the Central Government, State Government or local authority entrusted with recovery of tax or other Government dues.

What particulars must accompany an attachment order under Section 26B(4)?

Particulars of the assessee and details of tax or other Government dues.

From when does the obligation under Section 26B(4) apply?

From such date as may be notified by the Central Government.

In what manner shall attachment orders be filed under Section 26B(4)?

In such form and manner as may be prescribed.

Who may file particulars of attachment orders obtained from a court or other authority under Section 26B(5)?

Any person having a claim against a borrower who has obtained an attachment order.

What is required for filing attachment order particulars under Section 26B(5)?

Filing in the prescribed form and manner on payment of the prescribed fee.

What is the subject matter of Section 26C of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Effect of the registration of transactions.

What is the effect of registration of creation, modification or satisfaction of security interest or filing of an attachment order under Section 26C(1)?

It shall be deemed to constitute a public notice.

From when does the deemed public notice under Section 26C(1) take effect?

From the date and time of filing the particulars with the Central Registry.

Does Section 26C(1) operate without prejudice to other laws?

Yes, without prejudice to the provisions contained in any other law for the time being in force.

Whose registrations or filings are covered under Section 26C(1)?

Registrations by a secured creditor or other creditor and filing of attachment orders.

When does the priority under Section 26C(2) arise?

When a security interest or attachment order is filed for registration under Chapter IV and this Chapter.

Whose claim gets priority under Section 26C(2)?

The claim of the secured creditor or other creditor holding the attachment order.

Over what does the registered claim have priority under Section 26C(2)?

Any subsequent security interest created upon the property.

What is the effect of a subsequent sale, lease, assignment or licence of the property after registration under Section 26C(2)?

It shall be subject to the claim of the secured creditor or other creditor holding the attachment order.

Does the priority rule under Section 26C(2) apply to transactions in the ordinary course of the borrower's business?

No, it does not apply to transactions carried on by the borrower in the ordinary course of business.

What is the subject matter of Section 26D of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Right of enforcement of securities.

From when does Section 26D become operative?

From the date of commencement of the provisions of this Chapter.

Can a secured creditor enforce security under Chapter III without registration of the security interest?

No.

What is the mandatory condition for enforcement of security under Chapter III under Section 26D?

The security interest created in favour of the secured creditor by the borrower must be registered with the Central Registry.

Under which Chapter are the rights of enforcement of securities referred to in Section 26D exercised?

Chapter III.

Does Section 26D override inconsistent provisions of other laws?

Yes, notwithstanding anything contained in any other law for the time being in force.

What is the subject matter of Section 26E of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Priority to secured creditors.

When do secured creditors acquire priority under Section 26E?

After the registration of the security interest.

What debts are to be paid in priority under Section 26E?

Debts due to any secured creditor.

Over which dues do secured creditors have priority under Section 26E?

Over all other debts and all revenues, taxes, cesses and other rates payable to the Central Government, State Government or local authority.

Does Section 26E override inconsistent provisions of other laws?

Yes, notwithstanding anything contained in any other law for the time being in force.

What does the Explanation to Section 26E clarify regarding the Insolvency and Bankruptcy Code, 2016?

In cases where insolvency or bankruptcy proceedings are pending in respect of the borrower's secured assets, the priority of secured creditors is subject to the provisions of the Insolvency and Bankruptcy Code, 2016.

When is the priority under Section 26E subject to the Insolvency and Bankruptcy Code, 2016?

On or after the commencement of the Insolvency and Bankruptcy Code, 2016, where insolvency or bankruptcy proceedings are pending in respect of the secured assets of the borrower.

CHAPTER - 4A

REGISTRATION BY SECURED CREDITORS AND OTHER CREDITORS

What is the subject matter of Section 27 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Penalties.

For what default under Section 27(a) can penalty be imposed?

Default in filing under section 23 the particulars of every transaction of securitisation, asset reconstruction or security interest created by an asset reconstruction company or secured creditor.

For what default under Section 27(b) can penalty be imposed?

Default in sending the particulars of modification under section 24.

For what default under Section 27(c) can penalty be imposed?

Default in giving intimation under section 25.

Who is liable for penalty under Section 27?

Every company and every officer of the company or the secured creditor and every officer of the secured creditor who is in default.

What is the punishment for default under Section 27?

Fine which may extend to five thousand rupees for every day during which the default continues.

What is the effect of the proviso to Section 27?

The provisions of Section 27 shall be deemed to have been omitted from the date of coming into force of this Chapter and section 23 as amended by the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016.

What is the subject matter of Section 28 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Penalties for non-compliance of direction of Reserve Bank (omitted).

What is the present status of Section 28?

Omitted by the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016 with effect from 1-9-2016.

What is the subject matter of Section 29 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Offences.

What constitutes an offence under Section 29?

Contravening, attempting to contravene, or abetting the contravention of the provisions of this Act or the rules made thereunder.

What is the punishment for an offence under Section 29?

Imprisonment for a term which may extend to one year, or with fine, or with both.

What is the subject matter of Section 30 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Cognizance of offences.

When can a court take cognizance of offences under Section 30(1)?

Only upon a complaint in writing made by an authorised officer of the Central Registry or the Reserve Bank.

Who may make a complaint for cognizance under Section 30(1)?

An officer of the Central Registry or an officer of the Reserve Bank authorised in writing by the Central Registrar or the Reserve Bank, as the case may be.

Can a court take cognizance of offences under the Act without a written complaint by an authorised officer?

No.

Which offences are covered by the cognizance requirement under Section 30(1)?

Offences under section 27 relating to non-compliance with sections 23, 24 or 25, under section 28, section 29 or any other provisions of the Act.

Which courts are competent to try offences punishable under this Act under Section 30(2)?

A Metropolitan Magistrate or a Judicial Magistrate of the first class.

Can a court inferior to a Metropolitan Magistrate or Judicial Magistrate of the first class try offences under this Act?

No.

What is the subject matter of Section 30A of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Power of adjudicating authority to impose penalty.

When may the adjudicating authority impose a penalty under Section 30A(1)?

When any asset reconstruction company or any person fails to comply with any direction issued by the Reserve Bank under this Act.

What is the maximum penalty under Section 30A(1) for non-compliance with Reserve Bank directions?

Not exceeding one crore rupees or twice the amount involved in such failure, where quantifiable, whichever is more.

What additional penalty may be imposed for a continuing failure under Section 30A(1)?

A further penalty which may extend to one lakh rupees for every day after the first during which the failure continues.

What must the adjudicating authority do before imposing a penalty under Section 30A(2)?

Serve a show-cause notice and give a reasonable opportunity of being heard.

Within what period is the penalty payable under Section 30A(3)?

Within thirty days from the date of issue of the notice under sub-section (2).

What is the consequence if an asset reconstruction company fails to pay the penalty within the prescribed period under Section 30A(4)?

The adjudicating authority shall cancel its registration.

What procedural safeguard is provided before cancellation of registration under Section 30A(4)?

The asset reconstruction company shall be given an opportunity of being heard.

Can a complaint be filed in court for a failure under Section 30A(1) after penalty has been imposed and recovered under Section 30A(5)?

No.

Can penalty proceedings under Section 30A continue if a complaint has already been filed before a competent court for the same failure under Section 30A(6)?

No.

Who is the "adjudicating authority" under the Explanation to Section 30A?

Such officer or committee of officers of the Reserve Bank as designated by notification by the Central Board of the Reserve Bank.

Who is a "person in default" under the Explanation to Section 30A?

The asset reconstruction company or any person committing the failure, contravention or default, including the person in charge of such company or such other person liable under section 33.

What is the subject matter of Section 30B of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Appeal against penalties.

Who may prefer an appeal under Section 30B?

A person in default aggrieved by an order passed under sub-section (4) of section 30A.

Against which order does an appeal lie under Section 30B?

An order passed under sub-section (4) of section 30A.

To whom shall an appeal under Section 30B be preferred?

The Appellate Authority.

Within what period must an appeal under Section 30B be filed?

Within thirty days from the date on which the order is passed.

Can the Appellate Authority entertain an appeal filed after thirty days under Section 30B?

Yes, if it is satisfied that there was sufficient cause for not filing the appeal within that period.

What is the subject matter of Section 30C of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Appellate Authority.

Who may designate the Appellate Authority under Section 30C(1)?

The Central Board of the Reserve Bank.

Who may be designated as the Appellate Authority under Section 30C(1)?

Such officer or committee of officers as the Central Board of the Reserve Bank deems fit.

What power does the Appellate Authority have under Section 30C(2)?

It may pass such order as it deems fit after providing a reasonable opportunity of being heard to the person in default.

What opportunity must be given before the Appellate Authority passes an order under Section 30C(2)?

A reasonable opportunity of being heard to the person in default.

What power is conferred on the Appellate Authority under Section 30C(3)?

It may stay the enforcement of the order passed by the adjudicating authority under section 30A.

Can the Appellate Authority impose conditions while granting stay under Section 30C(3)?

Yes, subject to such terms and conditions as it deems fit.

What is the consequence of non-compliance with the stay conditions under Section 30C(4)?

The Appellate Authority may dismiss the appeal.

When may the Appellate Authority dismiss the appeal under Section 30C(4)?

When the person in default fails, without reasonable cause, to comply with the terms and conditions imposed under the stay order.

What is the subject matter of Section 30D of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Recovery of penalties.

Within what period must a recoverable sum be paid under Section 30D(1)?

Within thirty days from the date of service of the notice demanding payment.

What is a penalty imposed under Section 30A called for the purpose of recovery under Section 30D?

A recoverable sum.

What may the Reserve Bank do if the person in default fails to pay the recoverable sum within thirty days?

Recover the amount by the modes specified under Section 30D(1).

What is the first mode of recovery available to the Reserve Bank under Section 30D(1)(a)?

Debit the current account of the person in default maintained with the Reserve Bank or liquidate the securities held to his credit in the books of the Reserve Bank.

What is the second mode of recovery available to the Reserve Bank under Section 30D(1)(b)?

Issue a notice to any person from whom money is due to the person in default, requiring payment to the Reserve Bank.

Is a notice issued under Section 30D(1)(b) binding on the recipient?

Yes.

Is production of a passbook, deposit receipt or insurance policy necessary before payment under Section 30D(2)?

No.

What is the effect of a claim arising after the date of issue of a notice under Section 30D(1)?

Such claim is void as against the demand contained in the notice.

On what ground may a person object to a notice issued under Section 30D(1)?

By stating on oath that the amount demanded is not due or that he does not hold any money for or on account of the person in default.

What is the effect of a valid objection under Section 30D(4)?

The person is not required to pay the amount covered by the objection.

What is the consequence of making a false statement on oath under Section 30D(5)?

The person becomes personally liable to the Reserve Bank to the extent of his own liability or the recoverable sum, whichever is less.

What power does the Reserve Bank have under Section 30D(6)?

It may amend or revoke the notice or extend the time for payment.

What must the Reserve Bank grant upon receipt of payment under Section 30D(7)?

A receipt.

What is the effect of payment made to the Reserve Bank under Section 30D(7)?

The payer is fully discharged from liability to the person in default to the extent of the amount paid.

What is the consequence of discharging liability to the person in default after receiving a notice under Section 30D?

The person becomes personally liable to the Reserve Bank to the extent of his own liability or the recoverable sum, whichever is less.

What is the consequence if a person fails to comply with a notice issued under Section 30D(1)?

He shall be deemed to be the person in default in respect of the amount specified in the notice.

How may the Reserve Bank enforce recovery of a recoverable sum under Section 30D(10)?

Through the Principal Civil Court having jurisdiction, as if the notice were a decree of that Court.

Which Principal Civil Court has jurisdiction under Section 30D(10)?

The court having jurisdiction where the registered office, head office, principal place of business, or usual place of residence of the person in default is situated.

Who must apply to the Principal Civil Court for enforcement under Section 30D(11)?

An officer of the Reserve Bank authorised in this behalf.

What must the authorised officer certify before recovery can be enforced under Section 30D(11)?

That the person in default has failed to pay the recoverable sum.

What is the subject matter of Section 31 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Cases to which the Act does not apply.

Does the SARFAESI Act apply to a lien on goods, money or security under the Indian Contract Act, 1872, the Sale of Goods Act, 1930 or any other law?

No.

Does the SARFAESI Act apply to a pledge of movables under Section 172 of the Indian Contract Act, 1872?

No.

Does the SARFAESI Act apply to the creation of security in an aircraft under the Aircraft Act, 1934?

No.

Does the SARFAESI Act apply to the creation of security interest in a vessel under the Merchant Shipping Act, 1958?

No.

Does the SARFAESI Act apply to the rights of an unpaid seller under Section 47 of the Sale of Goods Act, 1930?

No.

Does the SARFAESI Act apply to properties not liable to attachment or sale under the first proviso to Section 60(1) of the Code of Civil Procedure, 1908?

No, except properties specifically charged with the debt recoverable under this Act.

Does the SARFAESI Act apply where the financial asset does not exceed one lakh rupees?

No.

Does the SARFAESI Act apply to security interest created in agricultural land?

No.

Does the SARFAESI Act apply where the amount due is less than twenty per cent of the principal amount and interest thereon?

No.

What is the monetary threshold below which the SARFAESI Act does not apply under Section 31(h)?

Financial asset not exceeding one lakh rupees.

What is the percentage threshold under Section 31(j) below which the SARFAESI Act does not apply?

Less than twenty per cent of the principal amount and interest thereon.

CHAPTER – 6

MISCELLANEOUS

What is the subject matter of Section 31 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Cases to which the Act does not apply.

To what kind of lien does the SARFAESI Act not apply under Section 31(a)?

A lien on goods, money or security given by or under the Indian Contract Act, 1872, the Sale of Goods Act, 1930 or any other law for the time being in force.

To what kind of pledge does the SARFAESI Act not apply under Section 31(b)?

A pledge of movables within the meaning of Section 172 of the Indian Contract Act, 1872.

What security created under the Aircraft Act, 1934 is excluded from the application of the SARFAESI Act?

Creation of security in any aircraft.

What security interest under the Merchant Shipping Act, 1958 is excluded from the application of the SARFAESI Act?

Creation of security interest in any vessel.

Which rights of an unpaid seller are excluded from the application of the SARFAESI Act?

Rights under Section 47 of the Sale of Goods Act, 1930.

Which properties are excluded from the application of the SARFAESI Act under Section 31(g)?

Properties not liable to attachment or sale under the first proviso to Section 60(1) of the Code of Civil Procedure, 1908, excluding properties specifically charged with the debt recoverable under this Act.

What is the monetary limit below which the SARFAESI Act does not apply under Section 31(h)?

Security interest securing repayment of a financial asset not exceeding one lakh rupees.

What type of land is excluded from the application of the SARFAESI Act under Section 31(i)?

Agricultural land.

What amount due is excluded from the application of the SARFAESI Act under Section 31(j)?

An amount due that is less than twenty per cent of the principal amount and interest thereon.

What is the subject matter of Section 31A of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Power to exempt a class or classes of banks or financial institutions.

In whose interest may the Central Government issue a notification under Section 31A(1)?

In the public interest.

How may the Central Government exempt banks or financial institutions under Section 31A(1)(a)?

By directing that any of the provisions of this Act shall not apply to such class or classes of banks or financial institutions.

How may the Central Government modify the application of the Act under Section 31A(1)(b)?

By directing that the provisions of this Act shall apply with such exceptions, modifications and adaptations as specified in the notification.

Before whom must the draft notification under Section 31A(2) be laid?

Before each House of Parliament.

For what period must the draft notification be laid before Parliament under Section 31A(2)?

Thirty days.

What is the effect if both Houses of Parliament disapprove the proposed notification under Section 31A(2)?

The notification shall not be issued.

What is the effect if both Houses of Parliament agree to modify the proposed notification under Section 31A(2)?

The notification shall be issued only in the modified form agreed upon by both Houses.

What period shall be excluded while calculating the thirty-day period under Section 31A(3)?

Any period during which either House is prorogued or adjourned for more than four consecutive days.

What must be done with every notification issued under Section 31A(4)?

A copy of the notification shall, as soon as may be after its issue, be laid before each House of Parliament.

What is the subject matter of Section 32 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Protection of action taken in good faith.

Against whom is protection under Section 32 available?

The Reserve Bank, the Central Registry, any secured creditor or any of its officers.

What proceedings are barred under Section 32?

No suit, prosecution or other legal proceedings shall lie.

For what acts is protection granted under Section 32?

Anything done or omitted to be done in good faith under this Act.

What is the subject matter of Section 33 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Offences by companies.

Who is deemed to be guilty where an offence under the Act is committed by a company under Section 33(1)?

Every person who at the time of the offence was in charge of and responsible to the company for the conduct of its business, as well as the company.

What is the liability of persons deemed guilty under Section 33(1)?

They shall be liable to be proceeded against and punished accordingly.

When is a person in charge of the company exempt from punishment under the proviso to Section 33(1)?

If he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent its commission.

When is a director, manager, secretary or other officer also deemed guilty under Section 33(2)?

When the offence is proved to have been committed with his consent or connivance or is attributable to his neglect.

What is the liability of a director, manager, secretary or other officer deemed guilty under Section 33(2)?

He shall be liable to be proceeded against and punished accordingly.

What does the term "company" mean for the purposes of Section 33?

Any body corporate and includes a firm or other association of individuals.

Who is a "director" in relation to a firm under Section 33?

A partner in the firm.

What is the subject matter of Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Civil court not to have jurisdiction.

Does a civil court have jurisdiction to entertain suits or proceedings in matters which a Debts Recovery Tribunal or the Appellate Tribunal is empowered to determine under this Act?

No, a civil court has no jurisdiction to entertain such suit or proceeding.

Which authorities' jurisdiction bars the jurisdiction of the civil court under Section 34?

The Debts Recovery Tribunal and the Appellate Tribunal.

Can any court or other authority grant an injunction in respect of actions taken or to be taken under this Act?

No, no injunction shall be granted by any court or other authority.

In respect of which actions is grant of injunction barred under Section 34?

Actions taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

What is the subject matter of Section 35 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

The provisions of this Act to override other laws.

What is the overriding effect of the Act under Section 35?

The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law.

What is the subject matter of Section 36 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Limitation.

When is a secured creditor entitled to take measures under sub-section (4) of section 13?

Only if the claim in respect of the financial asset is made within the period of limitation prescribed under the Limitation Act, 1963.

Which measures are subject to the limitation prescribed under Section 36?

All or any of the measures under sub-section (4) of section 13.

Under which Act is the period of limitation determined for the purposes of Section 36?

The Limitation Act, 1963.

What is the subject matter of Section 37 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Application of other laws not barred.

Are the provisions of this Act and the rules made thereunder in addition to or in derogation of other laws?

They are in addition to, and not in derogation of, the specified laws and any other law for the time being in force.

Which enactments are specifically preserved under Section 37?

The Companies Act, 1956, the Securities Contracts (Regulation) Act, 1956, the Securities and Exchange Board of India Act, 1992, and the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

Does Section 37 preserve the operation of any other law for the time being in force?

Yes, the provisions of this Act are in addition to, and not in derogation of, any other law for the time being in force.

What is the subject matter of Section 38 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Power of Central Government to make rules.

How may the Central Government make rules under Section 38(1)?

By notification in the Electronic Gazette.

For what purpose may the Central Government make rules under Section 38(1)?

For carrying out the provisions of this Act.

How is the Electronic Gazette defined for the purposes of Section 38(1)?

As defined in clause (s) of section 2 of the Information Technology Act, 2000.

What may the rules provide for under Section 38(2)(a)?

Other business or commercial rights of similar nature under clause (t) of section 2.

What may the rules prescribe under Section 38(2)(aa)?

The form and manner of filing an application under section 13(10).

What may the rules prescribe under Section 38(2)(b)?

The manner in which the rights of a secured creditor may be exercised by one or more of his officers under section 13(12).

What may the rules prescribe under Section 38(2)(ba)?

The fee for making an application to the Debts Recovery Tribunal under section 17(1).

What may the rules prescribe under Section 38(2)(bb)?

The form of making an application to the Appellate Tribunal under section 17(6).

What may the rules prescribe under Section 38(2)(bc)?

The fee for preferring an appeal to the Appellate Tribunal under section 18(1).

What may the rules prescribe under Section 38(2)(bca)?

The manner of integration of records of various registration systems with the records of the Central Registry under section 20A(1).

What may the rules prescribe under Section 38(2)(bcb)?

The terms and conditions of delegation of powers by the Central Government to the Reserve Bank under section 20B.

What may the rules prescribe under Section 38(2)(c)?

The safeguards subject to which records may be kept under section 22(2).

What may the rules prescribe under Section 38(2)(d)?

The manner of filing particulars of every transaction of securitisation under section 23 and the fee for such filing.

What may the rules prescribe under Section 38(2)(da)?

The form for registration of different types of security interests and the fee therefor under section 23(3).

What may the rules prescribe under Section 38(2)(e)?

The fee for inspecting the particulars of transactions entered in the Central Register under section 26(1).

What may the rules prescribe under Section 38(2)(f)?

The fee for inspecting the Central Register maintained in electronic form under section 26(2).

What may the rules prescribe under Section 38(2)(fa)?

The form and manner for filing particulars of transactions under section 26B(2).

What may the rules prescribe under Section 38(2)(fb)?

The form, manner and date for filing attachment orders with the Central Registry under section 26B(4).

What may the rules prescribe under Section 38(2)(fc)?

The form, manner and fee for filing particulars of attachment orders with the Central Registry under section 26B(5).

What may the rules prescribe under Section 38(2)(g)?

Any other matter required or permitted to be prescribed under this Act.

Before whom shall every rule made under this Act be laid under Section 38(3)?

Before each House of Parliament.

For what total period shall every rule be laid before Parliament under Section 38(3)?

Thirty days.

Can the thirty-day period under Section 38(3) be comprised in more than one session?

Yes, in one session or in two or more successive sessions.

What is the effect if both Houses of Parliament agree to modify a rule under Section 38(3)?

The rule shall thereafter have effect only in the modified form.

What is the effect if both Houses of Parliament agree that a rule should not be made under Section 38(3)?

The rule shall thereafter be of no effect.

What is the effect of modification or annulment of a rule on previous acts done under it?

It shall not prejudice the validity of anything previously done under that rule.

What is the subject matter of Section 39 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Certain provisions of this Act to apply after Central Registry is set up or cause to be set up.

Which provisions of the Act become applicable after the Central Registry is set up or caused to be set up under Section 20(1)?

Sub-sections (2), (3) and (4) of section 20 and sections 21, 22, 23, 24, 25, 26 and 27.

Under which provision must the Central Registry be set up for Section 39 to operate?

Sub-section (1) of section 20.

What is the subject matter of Section 40 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Power to remove difficulties.

Who has the power to remove difficulties under Section 40(1)?

The Central Government.

When may the Central Government exercise the power under Section 40(1)?

If any difficulty arises in giving effect to the provisions of this Act.

How may the Central Government remove difficulties under Section 40(1)?

By order published in the Official Gazette.

What kind of provisions may be made under an order issued under Section 40(1)?

Such provisions not inconsistent with the provisions of this Act as may appear necessary for removing the difficulty.

Within what period can an order under Section 40(1) be made?

Before the expiry of two years from the commencement of this Act.

What is the requirement regarding every order made under Section 40?

It shall be laid, as soon as may be after it is made, before each House of Parliament.

What is the subject matter of Section 41 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Amendments to certain enactments.

How are the enactments specified in the Schedule to be amended under Section 41?

In the manner specified in the Schedule.

What is the subject matter of Section 42 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?

Repeal and saving.

Which Ordinance is repealed under Section 42(1)?

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Second) Ordinance, 2002 (Ordinance No. 3 of 2002).

What is the effect of repeal under Section 42(2)?

Anything done or any action taken under the repealed Ordinance shall be deemed to have been done or taken under the corresponding provisions of this Act.