Skip to main content

SARFAESI - What happens if secured asset was agricultural land - Madras HC

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, (SARFAESI Act), 2002, is a self-contained code and has been enacted to enable banks and financial institutions (FIs) to recover the outstanding without approaching the courts and tribunals, the Madras High Court has said.

Prior to the Act, the banks were not empowered to take possession of securities to realise the debts. It was only under such circumstances that Parliament enacted the SARFAESI Act to enable banks and FIs to recover the loan without resorting to the time consuming legal proceedings, a division bench of justices S Rajeswaran and S Vaidyanathan said.

The bench was dismissing a writ petition from Silicon Valley Auto Components Private Limited in Maraimalai Nagar, which borrowed a huge sum from the Nandanam branch of Indian Bank. There remained a balance of Rs. 26 crore. The bank initiated recovery proceedings in February this year. Challenging the same, the firm filed the present petition. The contention of the petitioner was that the secured assets were agricultural lands and therefore they must be exempted from the purview of SARFAESI proceedings.

The bench said that the secured asset is situated in Neelankarai, which has become a very posh residential area in Chennai and a number of posh and giant residential projects have come up in and around it. In fact, the petitioner himself has constructed a huge bungalow with swimming-pool and a tennis court therein. “Therefore, when the area has developed in a great extent and became a posh residential area and when the bank resorted to take possession of the same, we do not find any justification on the part of the petitioner still to contend that the secured asset is an agricultural land,’’ the bench said and dismissed the petition.

It, however, granted liberty to the petitioner to avail the remedy provided under Section 17 of the Act before the Debt Recovery Tribunal concerned within two weeks, if it is so advised.

Article referred: http://www.newindianexpress.com/states/tamil_nadu/SARFAESI-Act-is-to-Recover-Dues/2014/08/24/article2395251.ece

Comments

Post a Comment

Most viewed this month

Michigan House Approves 'Right-to-Work' Bill

Amid raucous protests, the Republican-led Michigan House approved a contentious right-to-work bill on  Dec 11 limiting unions' strength in the state where the (Union for American Auto Workers)  UAW was born. The chamber passed a measure dealing with public-sector workers 58-51 as protesters shouted "shame on you" from the gallery and huge crowds of union backers massed in the state Capitol halls and on the grounds. Backers said a right-to-work law would bring more jobs to Michigan and give workers freedom. Critics said it would drive down wages and benefits. The right-to-work movement has been growing in the country since Wisconsin fought a similar battle with unions over two years ago. Michigan would become the 24th state to enact right-to-work provisions, and passage of the legislation would deal a stunning blow to the power of organized labor in the United States. Wisconsin Republicans in 2011 passed laws severely restricting the power of public s...
Post a Comment
Read more

Power to re-assess by AO and disclosure of material facts

In AVTEC Limited v. DCIT, the division of the Delhi High Court held that AO is bound to look at the litigation history of the assessee and cannot expect the assessee to inform him.  In the instant case, the Petitioner, engaged in the business of manufacturing and selling of automobiles, power trains and power shift transmissions along with their components, approached the High Court challenging the re-assessment order passed against them. For the year 2006-07, the Petitioner entered into a Business Transfer Agreement with Hindustan Motors Ltd, as per which, the Petitioner took over the business from HML.  While filing income tax return for the said year, the petitioner claimed the expenses incurred in respect of professional and legal charges for the purpose of taking over of the business from HML as capital expenses and claimed depreciation. Article referred: http://www.taxscan.in/assessing-officer-bound-look-litigation-history-assessee-delhi-hc-read-order/8087/
Post a Comment
Read more

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more