Debtor’s Representation Mandatory Under SARFAESI But Not Necessary to Reply Directly

In ITC LIMITED vs BLUE COAST HOTELS LTD. & ORS., the Supreme Court, held that while recovering secured property from Non- Performing Assets (NPAs), a secured creditor should mandatorily consider the debtor’s representation under Section 13 (3A), after the initiation of proceedings under Section 13 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

The Bench comprising Justice S.A. Bobde and Justice L. Nageswara Rao, however, clarified that this condition can also be constructively satisfied and that the creditor need not send a direct reply or rejection to such representation.

Article referred: http://www.livelaw.in/secured-creditor-mandatorily-consider-debtors-representation-s-13-3a-sarfaesi-act-sc-read-judgment/

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