Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | 37 and 41 - Sick Industrial Companies (Special Provisions) ·Act 35 22 and 32 - Whether the SARFAESI Act prevails over the SICA Act 1985 (SICA) - ss. 15 Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (SARFAESI Act) - ss. 13 |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) - ss. 13, 35, 37 and 41 - Sick Industrial Companies (Special Provisions) ·Act, 1985 (SICA) - ss. 15; 22 and 32 - Whether the SARFAESI Act prevails over the SICA Act - Held: SARFAESI Act prevails over the SICA to the extent of inconsistency therewith - Where a secured creditor of a sick industrial company seeks to recover its. debt in the manner provided by s.13 (2) of the SARFAESI Act, such secured creditor may realise such secured debt uls. 13(4) of the SARFAESI Act, notwithstanding the provisions of s.22 of SICA - In a situation where there are more than one secured creditor of a sick industrial company or it has been jointly financed by secured creditors, and at least 60% of such secured creditors in value of the amount outstanding as on a record date do not agree upon exercise of the right to realise their secitrity under the SARFAESI Act, s.22 of SICA will continue to have fall play -Where, uls.13 (9) of the SARFAESI Act, in the case of a sick industrial company having more than one secured creditor or being jointly financed by secured creditors representing 60%. or more in value of the amount outstanding as on a record date wish to exercise their rights to enforce their security under the SARFAESI Act, s.22 of SICA, being inconsistent with the exercise of such rights, will have no play - Where secured creditors representing not less than 75% in value of the amount outstanding against financial assistance decide to enforce their security under the SARFAESI Act, any reference pending under the SICA cannot be further proceeded with and proceedings under the SICA will abate - However, s.22 of the SICA will continue to apply in the case of unsecured creditors seeking to recover their debts from a sick industrial company - This is for the reason that the SICA o;verrides the provisions of the DRT Act - Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (DRT Act) - ss. 17, 18 and 34.Sick Industrial Compa1111:' (Special .Provisions) Act, 1985 (SICA) - s.15(1), proviso 3 - Expression "where a reference is pending" in s.15 (1) proviso 3 - Interpretation of - Whether the said expression would include all proceedings before the BIFR or only proceedings at the initial reference stage - Held: s.15(1) proviso 3 covers all references pending before the BJFR, no matter whether such reference is at the inquiry stage, scheme stage, or winding up stage. |
Judge | Hon'ble Mr. Justice R.F. Nariman |
Neutral Citation | 2016 INSC 107 |
Petitioner | M/s Madras Petrochem Ltd. & Anr |
Respondent | Bifr& Ors. |
SCR | [2016] 11 S.C.R. 419 |
Judgement Date | 2016-01-29 |
Case Number | 614-615 |
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