SARFAESI ACT 2002 | Section 17 | Right to Appeal | DRT | Part 9

[UltraVid id=30 ]hello folks welcome to the de pedia world and I am a vinegar PAH today again we’ll continue with the topic the surface tea Act 2002 which is the securitization and reconstruction of financial assets and enforcement of security interest Act 2002 so before starting with the chapter we’ll take a quick review of what we have done so far in our previous lectures so that if there is anything that is yet uncovered for you please refer back to the previous lectures completes it completed so that we maintain the flow right so so to start with what we have done in the first lecture was the entire flow of the concept of securitisation and reconstruction we had seen the four basic elements the obligor the originator the finance the securitization and reconstruction company and the qualified institutional buyers and we had seen the relationship between all of them followed by that we had covered the definitions of what securitization is what reconstruction is what are secured assets what are financial assets what is security receipt what are schemes etc right and to reinforce of the definitions right you have been asked direct questions to explain the terms right so followed by that we had covered section 3 which talked about the registration of the securitization and reconstruction company when we talked about the issue of the certificate right then in Section 4 we talked about the cancellation of the certificate of registration right and what are the circumstances that leads to the cancellation that was followed by section 5 the acquisition of rights or interest in the financial asset by the securitization company then section 6 where whereby they had to send a notice to the obligor then we had covered section 7 right where we had seen the consequences if the financial assistance the financial assets is not realized by the secured ization and reconstruction company so what are the actions that the qualified institutional buyers can take then section 8 taught us that the security repeat are not supposed to be registered it is it is not a requirement for registration of the security receipt then in section 9 we had seen the various measures of asset reconstruction how the securitization and reconstruction company reconstructs the financial asset that they have taken over right and most important of it operates being the enforcement of security interest which was covered under Section 13 right and under Section 10 what we had seen was the other functions of the securitization and reconstruction company followed by Section 13 was section 15 we we talked about the manner and the affect of the takeover of the management right of the borrower of the obligor right then in section 16 we had seen that there is no compensation to the directors for the loss of office right when the management is taken over and then in Section 17 we’ll talk about the right to appeal and that will be the topic for the class today right we’ll be covering section 17 and section 18 in the lecture today so if you move on to section 70 what we see is the right to appeal the first thing is who has the right and what is he going to appeal for so for that first we need to understand who is aggrieved right so if reconstruction of a financial asset is under process then the secured creditor would forcefully or by applying the not forcefully but applying the means and applying the procedures given under the securitization and the reconstruction right by that they would acquire the asset of the obligor right either by take over the management acquiring the asset appointing manager and stuff all that we had seen in under section line right we had seen the measures and even under Section 13 approaching four we had seen the various measures right so when the secured creditor right applies those particular measures that are that are mentioned in section 9 and section 13 upon the obligor in order to reconstruct the asset the obligor can be aggrieved and if the obligor is aggrieved right obligate the borrower or any other person on his behalf can file an appeal to the debt recovery tribunal right against the measures taken by the secured creditors and this process has to be initiated this application has to be given within a period of 45 days and they would also have to pay a certain amount of fees with the application and the fees would be different for the borrower himself and for any other person applying on his behalf right and they will not be able to make any appeal to the debt recovery tribunal in the cases where they had made a representation as we already discussed when they made a representation and the debt and the secured creditor had given them a valid reason for why the representation was rejected right and if that was lawful then in that scenario they are not able to they’re not allowed to actually file an application with the debt recovery tribunal now the obligor files the borrower files an application to the debt recovery tribunal and what will be the content of the application they will apply to be secured right what they’ll say is that the secured creditor is applying certain mean to reconstruct it’s his assets right and that is something which is not beneficial for the borrower’s right that may have some hardship on the borrower’s so the borrower appeals that these measures should be either curved or stopped that the secured creditor is undertaking right that has to be curbed or stopped now what is the responsibility of the day trip or debt recovery Tribunal’s so the debt recovery Tribunal on the first hand will check whether the measures adopted by the secured creditors are asked for the provisions of the loss of the sections right as covered in the section 9 or section 13 subsection 4 right so if it is adopt so there are two scenarios either it is as per the provisions of the law or it does not as per the provision of the law so if it is as per the provision of the law right provisions of the Act then the debt recovery tribunal will set out an order in favor of the secured creditor the okay if the calculator is going ahead with such and such of the measures to reconstruct the asset and that is lawful that is as per the provisions of the Act then they would Allah the secured creditor like they shall and title the secured creditor to rico’s the action that they are taking right and the action that I mentioned under Section 13 subsection 4 right but if in any scenario the debt recovery tribunal finds that the measure adopted or not as per the provisions of the Act like there is certain real hardship to the obligor right and the action taken by the secured creditor is not as per the provisions of the Act then they would declare the rico’s to be invalid so in that scenario if for example the secured trader is taking over the position of the asset by some means that are not open to them as per the provisions of the Act right so debt recovery tribunal in this scenario has the power to declare that action to be invalid hence the secured creditor would not be allowed to advance with that action that set of actions all right and if it does so then it has then do we penalize then the matter will be looked by into by the debt recovery tribunal in a different aspect altogether right so if the action is the recourse is not as per the provisions of the Act then the debt recovery tribunal would require them to restore the management of the business to the borrower right or restoration of the position of the secured asset that the creator has taken like restoration of whatever action they have taken as per Section 13 subsection 4 right and they may also part some idea pass some additional orders if the deem fit and where the Rico is taken by the secured creditor was asked for the provisions of the Act in that scenario notwithstanding anything contained in any law for the time being in force the thing would stand in on their way and the secured creditor would be entitled to carry forward with the recourse of the action right now whenever any application is made to the debt recovery tribunal it would be the duty of the debt recovery tribunal to dispose of the matter in a period of 60 days right and this can further be extended right from time to time as per the requirement but the maximum period that can be allowed cumulative of all right for the settlement of any issue that are for the of any application made by the borrower would not exceed in any scenario more than four months right so that is the limit you may extend it once or twice or thrice with whatever period you want but in totality right in the aggregation it should not exceed a period of four months and in the scenario where the debt recovery Tribunal is not able to dispose of the case to do dispose of the application within the prescribed time right even after the extension then the matter can be raised to or the higher level and then appeal can be filed as per Section 18 right so in the next section we will see who is the next level Authority and how is the appeal to be filed and what are the procedures to be taken so under Section 17 right to appeal what we have seen is that the borrower or any other person has the right to appeal against the recourse of the secured creditor within the period of 45 days and then the debt recovery tribunal would assess whether the action is asked for the provision of the Act if it is there notwithstanding anything contained in any law for the time being enforce that action would be valid and if it is not as per the provisions of this act then he would declare the action to be invalid and would ask for a restoration of whatever has been whatever loss has been made right and then the debt recovery tribunal has to dispose of the matter within 60 days 60 days and extended to the maximum of four months cumulative right and if they are not able to dispose it on time and if there is no further extension or the period of four months are over then the case can be taken up to the higher authority and that will be discussed under Section 80 right [Music] [Music]

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