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1. BANKS CAN PROCEED WITH NOTICES TO BORROWERS : HIGH COURT

 

CHENNAI: The Madras High Court has ruled that it would not interfere with the notices issued by banks to mega borrowers under the Securitisation Act, and said that if notices were issued before November 11,2004 the banks need not withdraw their applications before the Debts Recovery Tribunals(DRT) to proceed under the Act.

Dismissing a large number of writ petitions from borrowers, the First Bench comprising the Chief Justice Markandey Katju and Justice F.M. Ibrahim Kalifulla said "Notice under Section 13(2) of the Act is really a show-cause notice, and ordinarily this court does not interfere with show-cause notices. The notice does not give rise to any cause of action because it does not affect any right or liability of a borrower.

"Noting that the writ petitions challenging such notices were "premature", the Bench said, "It is possible that the secured creditor may be satisfied with the reply of the borrower and may drop the proceedings."

The Hon'ble High Court of Madras also said that " If the notices had been issued prior to November 11 there is no requirement to take permission from the DRT for withdrawal of an application pending before it."

"It is only where notice under Section 13(2) is sought to be issued subsequent to November 11, that permission for withdrawal of an application before the DRT is necessary. And no action can be taken under the Securitisation Act before grant of such permission by the Tribunal."

2. U/S 14/SARFAESI ACT. THERE IS NO NECESSITY TO GIVE NOTICE TO BORROWER- CHENNAI HIGH COURT

. 30, Aug 2004: The Hon'ble High Court of Madras said that CRP 1557/04 that "Under section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 no need to send notice to the Respondent(Borrower) by the Chief Metropoliton Megistrate or District Megistrate

3. ENFORCEMENT OF THE POWERS CONFERRED BY SUB-SECTION

 

In Enforcement Of The Powers Conferred By Sub-Section (1) and clause (b) of sub section 38 read with sub-sections(1) and (12) of section 13 of the securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act,2002(54 of 2002) The Central Government hereby makes the following amendments further to attend the Security Interest (Enforcement ) Rlues ,2002 namely:-

1.(i)These Rules may be called the Security Interest (Enforcement)(Amendent).Rules,2007.

(ii) They shall come into force on the date of their publication in the Official Gazette
.

4. IN THE SECURITY INTEREST (ENFORCEMENT)RULES,2002

 

(i) In rule 2,for clause (d) the following clause shall be substituted namely:- (a) “approved valuer” means a person registered as a valuer undersection 34AB of the Wealth –tax Act,1957 and approved by the board of directors or board or trustees of the secured creditor as the case may be .

(ii) in rule 8, in sub-rule (2) for the words, brackets and figure “the possession notice as referred to in sub-rule (1) shall also be published in two leading newspapers”, the words ,brackets and figure “ the possession notice as referred to in sub-rule(1) shall also be published as soon as possible but in any case not later than seven days from the date of taking possession , in two leading newspapers”, shall be substituted.

(iii) In rule 9, ?In sub-rule(7) ,the following provision shall be inserted , namely:- “ Provided that if after meeting the cost of removing encumbrances and contingencies there is any surplus available out of the money deposited by the purchaser such surplus available shall be paid to the purchaser within fifteen days from date of finalization of the sale.” (iv) in rule 9, in sub-rule (8) for the word “may “ the word “shall” shall be substituted;
 

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