Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002)
Chapter-II Regulation of Securitisation and Reconstruction of Financial Assets of Banks and Financial Institutions
Section 6: Notice to obligor and discharge of obligation of such obligor.
6. (1) The bank or financial institution may, if it considers appropriate, give a notice of acquisition of financial assets by any 1[asset reconstruction company], to the concerned obligor and any other concerned person and to the concerned registering authority (including Registrar of Companies) in whose jurisdiction the mortgage, charge, hypothecation, assignment or other interest created on the financial assets had been registered.
(2) Where a notice of acquisition of financial asset under sub-section (1) is given by a bank or financial institution, the obligor, on receipt of such notice, shall make payment to the concerned 1[asset reconstruction company], as the case may be, and payment made to such company in discharge of any of the obligations in relation to the financial asset specified in the notice shall be a full discharge to the obligor making the payment from all liability in respect of such payment.
(3) Where no notice of acquisition of financial asset under sub-section (1) is given by any bank or financial institution, any money or other properties subsequently received by the bank or financial institution, shall constitute monies or properties held in trust for the benefit of and on behalf of the 1[asset reconstruction company], as the case may be, and such bank or financial institution shall hold such payment or property which shall forthwith be made over or delivered to 1[asset reconstruction company], as the case may be, or its agent duly authorised in this behalf.
Reference
1. Substituted by Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016, w.e.f. 1-9-2016 through sec. 3 as under:
“3. Throughout the principal Act,—
(i) for the words “securitisation company”, “reconstruction company”, “securitisation or reconstruction company” , “securitisation company or the reconstruction company” or “securitisation company or a reconstruction company”, wherever they occur, the words “asset reconstruction company” shall be substituted;
(ii) for the words “securitisation companies or reconstruction companies”, wherever they occur, the words “asset reconstruction companies” shall be substituted;
(iii) for the words “qualified institutional buyer”, wherever they occur, the words “qualified buyer” shall be substituted;
(iv) for the words “qualified institutional buyers”, wherever they occur, the words “qualified buyers” shall be substituted.”
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