The provisions of the Securities and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 do not apply to certain cases. List out six such cases where the provisions of the Act do not apply.
CS Professional · Corporate Restructuring, Valuation and Insolvency · PYQS · June 2015
The provisions of the Securities and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 do not apply to certain cases. List out six such cases where the provisions of the Act do not apply.
Answer & Explanation:
The provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) do not apply to certain cases. Here are six such cases: Lien on Goods/Money/Security: A lien on any goods, money, or security given by or under the Indian Contract Act, 1872, or the Sale of Goods Act, 1930, or any other law for the time being in force. Pledge of Movables: A pledge of movables within the meaning of Section 172 of the Indian Contract Act, 1872. Security in Aircraft: Creation of any security in any aircraft as defined in clause (1) of Section 2 of the Aircraft Act, 1934. Security in Vessel: Creation of security interest in any vessel as defined in clause (55) of Section 3 of the Merchant Shipping Act, 1958. Conditional Sale/Hire-Purchase/Lease: Any conditional sale, hire-purchase, or lease, or any other contract in which no security interest has been created. Rights of Unpaid Seller: Any rights of an unpaid seller under Section 47 of the Sale of Goods Act, 1930. Properties Not Liable to Attachment: Any properties not liable to attachment (excluding the properties specifically charged with the debt recoverable under this Act) or sale under the first proviso to Sub-section (1) of Section 60 of the Code of Civil Procedure, 1908. Small Financial Assets: Any security interest for securing repayment of any financial asset not exceeding one lakh rupees. Agricultural Land: Any security interest created in agricultural land. Small Debt Amount: Any case in which the amount due is less than twenty per cent of the principal amount and interest thereon.
Topics: Insolvency and Winding Up
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