11/01/2024

Law of Tenancy/Lease Rights in case of Secured Creditor initiated proceedings under the SARFAESI Act, 2002 – Trilokchand Fabrication Pvt. Ltd. Vs. State of U.P. and Ors. – Allahabad High Court

In this landmark judgment, a division Bench of Hon’ble High Court of Allahabad explains in detail, the law of tenancy/lease rights in case of secured creditors has initiated proceedings:
(i) How are tenancy rights determined beyond the period of 1 year under the TPA 1882?
(ii) What is the recourse available to a tenant during the pendency of an application under Section 14 of the SARFAESI Act?
(iii) Can civil suits/proceedings be instituted during the pendency of an application under Section 14 of the SARFAESI Act?
(iv) Can a monthly tenancy, not entitle a lessee to claim possession of a secured asset after proceedings have been initiated under Section 14 of the SARFAESI Act?

Law of Tenancy/Lease Rights in case of Secured Creditor initiated proceedings under the SARFAESI Act, 2002 – Trilokchand Fabrication Pvt. Ltd. Vs. State of U.P. and Ors. – Allahabad High Court Read Post »

Whether Banks/NBFCs are bound under Notification dated 29.05.2015 issued u/s 9 of the MSMED Act, 2006 to adopt Restructuring Process on its own without there being any application by MSMEs – A. Navinchandra Steels Pvt. Ltd. and Anr. Vs. Union of India and Ors. – Bombay High Court

In this case, the MSMEs/Borrowers have challenged the very action of declaring them as NPA under Section 13 (2) of the SARFAESI Act, 2002, without following the procedure of restructuring as contemplated under the Notification dated 29.05.2015 issued under Section 9 of the MSMED Act, 2006.
Hon’ble High Court of Bombay holds that:
(i) The whole process as provided under the said Notification starts from identification of ‘Incipient Stress’ in the account of an MSME and thereafter classifying it in 3 sub-categories provided as per Clause 1(1) of the said Notification.
(ii) The said Notification can be pressed into service only and only after the MSME [such as the Petitioners] approaches the Banks/NBFCs with an appropriate application supported by an affidavit of the authorized person placing on record the bundle of facts which lead to the conclusion of incipient stress and only after that, the Banks or NBFCs are required to categorize them as SMA-0, SMA-1 and SMA-2.

Whether Banks/NBFCs are bound under Notification dated 29.05.2015 issued u/s 9 of the MSMED Act, 2006 to adopt Restructuring Process on its own without there being any application by MSMEs – A. Navinchandra Steels Pvt. Ltd. and Anr. Vs. Union of India and Ors. – Bombay High Court Read Post »

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