The Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2004

 
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THE ENFORCEMENT OF SECURITY INTEREST AND RECOVERY OF DEBTS LAWS (AMENDMENT) ACT, 2004

NO. 30 OF 2004

[29th December, 2004.]

An Act to amend the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and further to amend the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and the Companies Act, 1956.

BE it enacted by Parliament in the Fifty-fifth Year of the Republic of India as follows:-

CHAPTER I

PRELIMINARY

CHAPTER I

PRELIMINARY

  1. Short title and commencement.

  2. Short title and commencement.-(1) This Act may be called the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2004.

    (2) Save as otherwise provided in this Act, the provisions of this Act shall be deemed to have come into force on the 11th day of November, 2004.

    CHAPTER II

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

    CHAPTER II

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

  3. Amendment of section 2.

  4. Amendment of section 2.-In section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002) (hereafter in this Chapter referred to as the principal Act), in sub-section (1),-

    (i) after clause (h), the following clause shall be inserted, namely:-

    '(ha) "debt" shall have the meaning assigned to it in clause (g) of section 2 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993);';

    (ii) in clause (j), the words "in accordance with the directions or guidelines issued by the Reserve Bank" shall be omitted;

    (iii) in clause (o), for the words "doubtful or loss asset, in accordance with the directions or under guidelines relating to assets classifications issued by the Reserve Bank", the following shall be substituted, namely:-

    "doubtful or loss asset,-

    (a) in case such bank or financial institution is administered or regulated by any authority or body established, constituted or appointed by any law for the time being in force, in accordance with the directions or guidelines relating to assets classifications issued by such authority or body;

    (b) in any other case, in accordance with the directions or guidelines relating to assets classifications issued by the Reserve Bank;";

    (iv) in clause (u), for the words "trustee or any asset management company making investment on behalf of mutual fund or provident fund or gratuity fund or pension fund", the words, brackets and figures "trustee or securitisation company or reconstruction company which has been granted a certificate of registration under sub-section (4) of section 3 or any asset management company making investment on behalf of mutual fund" shall be substituted;

    (v) in clause (zd), for sub-clause (ii), the following sub-clause shall be substituted, namely:-

    "(ii) securitisation company or reconstruction company, whether acting as such or managing a trust set up by such securitisation company or reconstruction company for the securitisation or reconstruction, as the case may be; or".

  5. Amendment of section 3.

  6. Amendment of section 3.-In section 3 of the principal Act, in sub-section (3), after clause (g), the following clause shall be inserted at the end, namely:-

    "(h) that securitisation company or reconstruction company has complied with one or more conditions specified in the guidelines issued by the Reserve Bank for the said purpose.".

  7. .

  8. Amendment of section 4.-In section 4 of the principal Act, in sub-section (2),-

    (a) the words "rejection of application for registration or" shall be omitted;

    (b) for the words "such order of rejection or cancellation", the words "such order of cancellation" shall be substituted.

  9. Insertion of new section 5A.

  10. Insertion of new section 5A.-After section 5 of the principal Act, the following section shall be inserted, namely:-

    "5A. Transfer of pending applications to any one of Debts Recovery Tribunals in certain cases.-(1) If any financial asset, of a borrower acquired by a securitisation company or reconstruction company, comprise of secured debts of more than one bank or financial institution for recovery of which such banks or financial institutions has filed applications before two or more Debts Recovery Tribunals, the securitisation company or reconstruction company may file an application to the Appellate Tribunal having jurisdiction over any of such Tribunals in which such applications are pending for transfer of all pending applications to any one of the Debts Recovery Tribunals as it deems fit.

    (2) On receipt of such application for transfer of all pending applications under sub-section (1), the Appellate Tribunal may, after giving the parties to the application an opportunity of being heard, pass an order for transfer of the pending applications to any one of the Debts Recovery Tribunals.

    (3) Notwithstanding anything contained in the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993), any order passed by the Appellate Tribunal under sub-section (2) shall be binding on all the Debts Recovery Tribunals referred to in sub-section (1) as if such order had been passed by the Appellate Tribunal having jurisdiction on each such Debts Recovery Tribunal.

    (4) Any recovery certificate, issued by the Debts Recovery Tribunal to which all the pending applications are transferred under sub-section (2), shall be executed in accordance with the provisions contained in sub-section (23) of section 19 and other provisions of the Recovery of Debts Due to Banks and Financial...

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