Summary Investment Law

THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND
ENFORCEMENT OF SECURITY INTEREST ACT, 2002
__________________

ARRANGEMENT OF SECTIONS
__________________

CHAPTER I
PRELIMINARY
SECTIONS
1. Short title, extent and commencement.
2. Definitions.


CHAPTER II
REGULATION OF SECURITISATION AND RECONSTRUCTION OF FINANCIALASSETS OF BANKS AND
FINANCIALINSTITUTIONS
3. Registration of asset reconstruction companies.
4. Cancellation of certificate of registration.
5. Acquisition of rights or interest in financial assets.
5A. Transfer of pending applications to any one of Debts Recovery Tribunals in certain cases.
6. Notice to obligor and discharge of obligation of such obligor.
7. Issue of security by raising of receipts or funds by asset reconstruction company.
8. Exemption from registration of security receipt.
9. Measures for assets reconstruction.
10. Other functions of asset reconstruction company.
11. Resolution of disputes.
12. Power of Reserve Bank to determine policy and issue directions.
12A. Power of Reserve Bank to call for statements and information.
12B. Power of Reserve Bank to carry out audit and inspection.


CHAPTER III
ENFORCEMENT OF SECURITYINTEREST
13. Enforcement of security interest.
14. Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking
possession of secured asset.
15. Manner and effect of take over of management.
16. No compensation to directors for loss of office.
17. Application against measures to recover secured debts.
17A. Making of application to Court of District Judge in certain cases.
18. Appeal to Appellate Tribunal.
18A. Validation of fees levied.
18B. Appeal to High Court in certain cases.
18C. Right to lodge a caveat.

1

,SECTIONS
19. Right of borrower to receive compensation and costs in certain cases.
CHAPTER IV
CENTRAL REGISTRY
20. Central Registry.
20A. Integration of registration systems with Central Registry.
20B. Delegation of powers.
21. Central Registrar.
22. Register of securitisation, reconstruction and security interest transactions.
23. Filing of transactions of securitisation, reconstruction and creation of security interest.
24. Modification of security interest registered under this Act.
25. Asset reconstruction companyor secured creditors to report satisfaction of security interest.
26. Right to inspect particulars of securitisation, reconstruction and security interest transactions.
26A.Rectification by Central Government in matters of registration, modification and satisfaction,
etc.
CHAPTER IVA
REGISTRATION BY SECURED CREDITORS AND OTHER CREDITORS
26B. Registration by secured creditors and other creditors.
26C. Effect of the registration of transactions, etc.
26D. Right of enforcement of securities.
26E. Priority to secured creditors.


CHAPTER V
OFFENCES ANDPENALTIES
27. Penalties.
28. [Omitted.]
29. Offences.
30. Cognizance of offence.
30A. Power of adjudicating authority to impose penalty.
30B. Appeal against penalties.
30C. Appellate Authority.
30D. Recovery of penalties.


CHAPTER VI
MISCELLANEOUS
31. Provisions of this Act not to apply in certain cases.
31A. Power to exempt a class or classes of banks or financial institutions.
32. Protection of action taken in good faith.
33. Offences by companies.
34. Civil court not to have jurisdiction.
35. The provisions of this Act to override other laws.
36. Limitation.
37. Application of other laws not barred.

2

,SECTIONS
38. Power of Central Government to make rules.
39. Certain provisions of this Act to apply after Central Registry is set up or cause to be set up.
40. Power to remove difficulties.
41. Amendments to certain enactments.
42. Repeal and saving.
THE SCHEDULE.




3

, THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS
AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002
ACT NO. 54 OF 2002
[17th December, 2002.]
1
[An Act to regulate securitisation and reconstruction of financial assets and enforcement of
security interest and to provide for a Central database of security interests created on property
rights, and for matters connected therewith or incidental thereto.]
BE it enacted by Parliament in the Fifty-third Year of the Republic of India as follows:—
CHAPTER I
PRELIMINARY
1. Short title, extent and commencement.—(1) This Act may be called the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
(2) It extends to the whole of India.
(3) It shall be deemed to have come into force on the 21st day of June, 2002.
2. Definitions.—(1) In this Act, unless the context otherwise requires,—
(a) “Appellate Tribunal” means a Debts Recovery Appellate Tribunal established under
sub-section (1) of section 8 of the Recovery of Debts Due to Banks and Financial Institutions Act,
1993 (51 of 1993);
(b) “asset reconstruction” means acquisition by any 2[asset reconstruction company]of any right
or interest of any bank or financial institution in any financial assistance for the purpose of realisation
of such financial assistance;
[(ba) “asset reconstruction company” means a company registered with Reserve Bank under
3

section 3 for the purposes of carrying on the business of asset reconstruction or securitisation, or
both;]
(c) “bank” means—
(i) a banking company; or
(ii) a corresponding new bank; or
(iii) the State Bank of India; or
(iv) a subsidiary bank; or
4
[(iva) a multi-State co-operative bank; or]
(v) such other bank which the Central Government may, by notification, specify for the
purposes of this Act;
(d) “banking company” shall have the meaning assigned to it in clause (c) of section 5 of the
Banking Regulation Act, 1949 (10 of 1949);


1. Subs. by Act 44 of 2016, s. 2, for the long title (w.e.f. 1-9-2016).
2. Subs. by s. 3, ibid., for “securitisation company or reconstruction company” (w.e.f. 1-9-2016).
3. Ins. by s. 4, ibid. (w.e.f. 1-9-2016).
4. Ins. by Act 1 of 2013, s. 2 (w.e.f. 15-1-2013).

4