Banking Law Updates : Gauhati

Petition Filed Against State Bank of India Dismissed

Before the Hon'ble Gauhati High Court, in the case of MAHAGURU BIBHUTI NARAYAN AYURVEDIC CENTRE v SBI [WP(C) 210/2021] the proprieter "had taken a loan from" SBI "and as the petitioner could not repay the loan, his account was declared as NPA. Thereafter a proceeding under Section 13 (2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ["SARFAESI Act"] has been initiated by" SBI. In this case, the DM had passed an Order under S.14 of the Act on 15 December 2020. 

By 1 March 2021, "the symbolic possession has already been taken but physical possession has not been taken." It was "again an admitted case that the petitioner has already approached the Debts Recovery Tribunal by filing an appeal under Section 17 of the SARFAESI Act." Finally, the writ petition was dismissed.

It is relevant to note that securitization is defined in S.2(z) of SARFAESI Act which says that "securitisation" means acquisition of financial assets by any asset reconstruction company from any originator, whether by raising of funds by such asset reconstruction company from qualified buyers by issue of security receipts representing undivided interest in such financial assets or otherwise". What is secured debt is defined in S.2(ze) of SARFAESI Act which says that "secured debt means a debt which is secured by any security interest". Therefore, the definition of secured debt is dependent on the definition of security interest.