TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 prevails over the Companies Act, 1956 so as to permit a secured creditor to proceed against secured assets despite winding up proceedings and without leave of the Company Court. (ii) Whether the bank could treat the disputed property as a secured asset and sell it where it was contended that the charge for part of the property was not registered under the Companies Act, 1956.
Issue (i): Whether the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 prevails over the Companies Act, 1956 so as to permit a secured creditor to proceed against secured assets despite winding up proceedings and without leave of the Company Court.
Analysis: The Act contains an overriding provision in Section 35 and is expressly stated by Section 37 to operate in addition to, and not in derogation of, other enactments. The statutory scheme enables enforcement of a security interest under Section 13 after the prescribed demand process, and the Act preserves workmen's dues through Section 13(9). Reading these provisions together, the special mechanism under the Act was held to be available notwithstanding winding up proceedings. The absence of leave of the Company Court did not disable the secured creditor from proceeding under the Act.
Conclusion: The issue was answered against the appellant and in favour of the respondent bank.
Issue (ii): Whether the bank could treat the disputed property as a secured asset and sell it where it was contended that the charge for part of the property was not registered under the Companies Act, 1956.
Analysis: The Court noted the bank's case that the security was created by equitable mortgage and that the relevant forms had been forwarded for registration. The Tribunal had proceeded on the footing that valid security existed over the land, and that factual finding could not be displaced in these proceedings. The challenge to the alleged absence of charge registration was held to be a matter for appropriate proceedings before the competent forum, including remedies under the securitisation law and the recovery law.
Conclusion: The issue was answered against the appellant and in favour of the respondent bank.
Final Conclusion: The secured creditor was permitted to proceed under the securitisation regime, and the appellant's challenge to the sale could only be pursued before the appropriate statutory forum.
Ratio Decidendi: A secured creditor may enforce a security interest under the securitisation statute notwithstanding winding up proceedings, and objections to the existence or registration of the charge must be pursued before the competent statutory forum rather than by defeating the creditor's enforcement remedy in the company court.
TaxTMI 
