Assignee in Assignment Agreement clearly steppes into the shoes of Assignor and is fully entitled to exercise its right to initiate proceeding under Section 95 of IBC against the Personal Guarantor | Borrower or Guarantor has no locus or right to challenge any such assignment – Mr. Paresh Parekh Vs. Alchemist Asset Reconstruction Co. Ltd. and Anr. – NCLAT New Delhi
Hon’ble NCLAT held that Section 5(1) of the SARFAESI Act, 2002 begins with the non-obstante clause and is an enabling provision empowering an Asset Reconstruction Company to acquire financial assets in the manner provided therein. The present Assignment Agreement between the original lender/RBL and Respondent No.1 which being an asset reconstruction company fell within the ambit of Section 5(1)(b). Section 5(2) further contains a deeming clause which provides that an Asset Reconstruction Company on such acquisition of financial assets from the original lender will be deemed to be the lender and all the rights of such original lender shall vest in them. Once the deeming provision contained in Section 5(2) comes into play, the Asset Reconstruction Company shall be deemed to be Lender for all purposes. The legal position recognising the rights of an Asset Reconstruction Company to act in furtherance of assignment of debt as a valid legal right is no longer res integra. That being so, the borrower or the guarantor has no locus or right to challenge any such assignment.