Moratorium On Insolvency And Bankruptcy Code, 2016: Is It A Cure-All Or Only Help A Few

On 17.05.2020, the Finance Minister of India while announcing the fifth tranche of the stimulus/relief packages to mitigate the consequences of COVID-19 on the Indian Economy, also announced that there will be no fresh insolvency filings under the Insolvency and Bankruptcy Code, 2016 ("IBC"). The Finance Minister informed that an ordinance will be brought to this effect. Undoubtedly, the business across the country requires relief but an absolute embargo upon the fresh insolvency filings...

Cooperative Banks Under SARFAESI Act : Analysis Of Constitution Bench Judgment

Recently a Constitution Bench of the Hon'ble Supreme Court comprising Hon'ble Mr. Justice Arun Mishra, Hon'ble Justice Indira Banerjee, Hon'ble Mr. Justice Vineet Saran, Hon'ble Mr. Justice M.R. Shah and Hon'ble Mr. Justice Aniruddha Bose dealt with a batch of matters in Pandurang Ganpati Chaugule v. Vishwasrao PatilMurgud Sahakari Bank Limited (Civil Appeal No. 5674 of 2009, decided on05.05.2020) decided the following issues:Whether 'co­operative banks', which are co­operative societies...

Cooperative Banks Must Comply With Banking Regulation Act And Other Laws Related To Banking: SC [Read Judgment]

The Supreme Court has held that the co­operative banks cannot carry on any activity without compliance of the provisions of the Banking Regulation Act, 1949 and any other legislation applicable to such banks relatable to 'Banking' One of the issues considered by the Constitution bench in Pandurang Ganpati Chaugule and others vs Vishwasrao Patil Murgud Sahakari Bank Limited was whether 'banking company' as defined in Section 5(c) of the BR Act, 1949 covers co­operative banks registered under the...

[Breaking] SARFEASI Act Applicable To Cooperative Banks : SC Constitution Bench

The Supreme Court has held that the Securitization and Reconstruction of Financial Assets and Enforcement of Security Act 2002 is applicable to cooperative banks."The co­operative banks under the State legislation and multi­ State co­operative banks are 'banks' under section 2(1)(c) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002", held the Constitution Bench.The Court rejected the argument that 2013 amendment to...

Scope Of Agricultural Lands As Security Interest Vis-à-Vis SARFAESI Act

Introduction Whilst the RDDBFI Act had been serving as the sole recovery Law for Banks/FI in the country for a decade, as it was not efficient mode of recovery, the Union Legislature deemed it to enact the The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act) commencing from 21st June, 2002. The two main salient features of the SARFAESI Act was allowing the creation of Asset Reconstruction Companies to give a chance...

Ministry Of Finance Introduces Online Hearing Through Video Conferencing Facility In Five DRTs [Read Notification]

The Department of Financial Services under the Union Ministry of Finance on Friday with the help of the National Informatics Centre has introduced online hearings via video conferencing in five debt recovery tribunals across the country keeping in mind the objective of social distancing in order to combat the pandemic of Covid-19.Initially, DRT-3 Delhi, DRT-3 Kolkata, DRT Dehradun, DRT-1 Chennai and DRT-3 Mumbai have been identified for providing this facility. The following pre-requisite...

Contracts Of Adhesion : Does The NCLT Have Power To rule Generally On Validity Of The Clauses Of Contracts ?

The National Company Law Tribunal ('NCLT'), established under the Companies Act, 2013, has emerged as the forum of choice for the purpose of 'recovery' of debt from corporate debtors under the Insolvency and Bankruptcy Code, 2016 ('IBC'), even though it was not established with the intent to enforce and effect recovery of debts. As much as everyone, including the learned members of the NCLT, often insist to the contrary, the stark reality is that the NCLT has become indeed, a forum to...

Delhi HC Allows Interim Reoccupation To Debtor of Property Securitized By Bank, Due To Nationwide Lockdown [Read Order]

Delhi High Court has allowed a family to reoccupy a floor of the property, which was securitised by IIFL Home Finance Limited under Section 14 of SARFAESI Act, due to the extraordinary circumstances caused by nationwide lockdown. While allowing the Petitioner one floor of the property, the Division Bench of Justice Rajiv Sahai Endlaw and Justice Manoj Kumar Ohri has clarified that they will not induct any other person into occupation of the said first floor and will not encroach upon...

Applicability Of SARFAESI Act To Co-operative Societies/Banks: SC Constitution Bench Begins Hearing

A Five Judge Constitution Bench headed by Justice Arun Mishra has commenced hearing on the question of applicability of The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 on Co-operative Societies/Banks.A three judge bench, referred this matter to constitution bench noticing the conflicting decisions in Greater Bombay Coop. Bank Ltd. vs. United Yarn Tex (P) Ltd. and others [(2007) 6 SCC 236] and the earlier pronouncements of this Court in...

Whatsapp Privacy, Independent ECI, Applicability Of SARFAESI To Co-Op Banks: SC Constitution Bench To Hear From Feb 25 [Read Notice]

The Constitution Bench headed by Justice Arun Mishra is set to consider the following four cases from 25th February 2020.The other judges in the bench are Justices Indira Banerjee, Vineet Saran, MR Shah and Aniruddha Bose.Whatsapp Privacy CaseKARMANYA SINGH SAREEN vs. UNION OF INDIA This is a special leave petition filed against Delhi High Court judgment in Whatsapp Privacy case. Karmanya Singh Sareen and Shreya Sethi had challenged the 2016 privacy policy of popular mobile application...

"These Petitions Should Actually Be Placed Before Union Finance Minister": Bombay HC Pulls Up Ministry For Its Failure To Provide Infra For DRTs [Read Order]

The Bombay High Court on Tuesday came down heavily upon the central government for failing to provide adequate infrastructure and manpower to the Debt Recovery Tribunals in the state of Maharashtra. The division bench comprising Chief Justice Pradeep Nandrajog and Justice Bharati Dangre noted that due to such debilitate infrastructure, disposal of cases had been affected severely, and cases were simply "meandering in the corridors of the Debt Recovery Tribunals.""The two Writ Petitions...

DRT Has No Power To Condone Delay In Filing Review Application Under RDB Act : SC [Read Judgment]

The Supreme Court has held that the Debts Recovery Tribunal has no power to condone the delay in filing application for review under the Recovery of Debts and Bankruptcy Act 1993(RDB Act)The Court held that the provisions of Limitation Act, including the provision to condone delay under Section 5 of it, apply only to original applications filed under Section 19 of the RDB Act and not to review applications.A bench comprising Justices R F Nariman and V Ramasubramanian held so in the case Standard...