TMI Blog2017 (1) TMI 1693X X X X Extracts X X X X X X X X Extracts X X X X ..... the manner as stated therein. Therefore, the interest of the debtor is adequately guarded and protected. In terms of Section 13(5A) of the Act, the secured creditor is entitled to participate in the bid, only in the absence of any bidders for a value equal to or above the reserve price and the sale is postponed due to that contingency - It is further to be noted that the sale of the property as above is amenable to an appeal under Section 17 of the Act before the Debt Recovery Tribunal. The only conclusion that could be arrived at is that the rights of the mortgagor/defaulter has been adequately safeguarded and protected under the Act. Right is given to the secured creditor to bid for the secured assets only on the arising of a particular contingency, viz., adjournment of sale for want of a bid at or above the reserve price; in which event also, the secured creditor could bid the property only at the reserve price and not below. There is no reason to conclude that the provision is arbitrary, irrational or in any manner violative of the fundamental rights of the appellant/petitioner. The challenge on the vires of Section 13(5A) fails and is turned down. Apart from the challe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve; ( d) sale is adjourned for want of bidders at or above the reserve price; ( e) at the postponed sale, any officer of the secured creditor, so authorised, can bid for the immovable property on behalf of the secured creditor. The above provision is challenged as unconstitutional since it interferes with the fundamental rights of a citizen. 5. Article 300A of the Constitution of India is canvassed by the learned counsel for the appellant to contend that the constitutional right guaranteed under the said Article is violated by Section 13(5A) of the Act in so far as it is left to the whims and fancies of the secured creditor to purchase for itself the property that is mortgaged to secure a financial assistance availed from the bank. It would be relevant to refer to Article 300A: 300A. Persons not to be deprived of property save by authority of law .- No person shall be deprived of his property save by authority of law. A citizen could be deprived of his property only under authority of law. It is beyond cavil that an involuntary sale of the property of a ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ters connected therewith or incidental thereto. The aforesaid Act enables the banks and financial institutions to realise long-term assets, manage problems of liquidity, asset liability mis-match and improve recovery by exercising powers to take possession of securities, sell them and reduce non-performing assets by adopting measures for recovery or reconstruction. The said Act further provides for setting up of asset reconstruction companies which are empowered to take possession of secured assets of the borrower including the right to transfer by way of lease, assignment or sale and realise the secured assets and take over the management of the business of the borrower. 2. At present, under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002................................. ( c) even though the banks, as secured creditors, are empowered to sell the securities to realise the defaulted loans, they are not empowered to accept the property in full or partial satisfaction of the claim against the defaulted borrower, if no bidder comes to bid or banks are unable to find a b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aluer and in consultation with the secured creditor, fix the reserve price of the property and may sell the whole or any part of such immovable secured asset by any of the following methods:- ( a) by obtaining quotations from the persons dealing with similar secured assets or otherwise interested in buying such assets; or ( b) by inviting tenders from the public; ( c ) by holding public auction; or ( d) by private treaty. In terms of Rule 8(5) of the Rules, the authorised officer of the secured creditor is to get the secured assets valued by an approved valuer and accordingly fix the reserve price of the property. The secured assets could be brought for sale only after fixing the reserve price as above. Rule 8(6) of the Rules provides that sufficient public notice be given regarding the sale of the secured assets, in the manner as stated therein. Therefore, the interest of the debtor is adequately guarded and protected. In terms of Section 13(5A) of the Act, the secured creditor is entitled to participate in the bid, only in the absence of any bidders for a value eq ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
