Comment on the correctness of the following factual situations or statements referring applicable provisions of the IBC, 2016 and Regulations made thereunder: Can the Secured Creditor prematurely close any in-built compe
CS Professional · Insolvency and Bankruptcy - Law and Practice · PYQS · June 2025
Comment on the correctness of the following factual situations or statements referring applicable provisions of the IBC, 2016 and Regulations made thereunder: Can the Secured Creditor prematurely close any in-built compensation clause to the directors, managerial personnel of the borrower as per their contractual agreement under SARFAESI Act?
Answer & Explanation:
Correct Section 18 of SARFAESI Act, 2002 empowers the secured creditors to make premature termination of any contract of managerial personnel, Directors etc., and no compensation for loss of office be paid. However, if the secured creditors have fully received their dues, then they should be restored their original position in the borrower company.
Topics: SARFAESI Act
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