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CS Professional · Insolvency and Bankruptcy - Law and Practice · Debt Recovery and Securitization

A Debts Recovery Tribunal issues a recovery certificate against Kaveri Textiles Ltd in favour of a bank. The Recovery Officer wants to take possession of the property over which the bank holds a security interest, appoint a receiver for it and sell it. Under which provision of the Recovery of Debts and Bankruptcy Act, 1993 can he do this?

Section 25(aa) empowers the Recovery Officer to take possession of the secured property or any other property of the defendant, appoint a receiver for it and sell it. Arrest, distraint and appeal deposit provisions serve different purposes and do not cover this.

  1. ASection 25, clause (aa), taking possession of secured property and appointing a receiver to sell itCorrect
  2. BSection 25, clause (b), arrest and detention of the defendant
  3. CSection 28(5), distraint of movable property under the Income-tax Act Third Schedule
  4. DSection 30A, deposit of fifty per cent of the debt

Explanation

Section 25(aa) lets the Recovery Officer take possession of property over which security interest is created, or any other property of the defendant, appoint a receiver and sell it. Clause (b) concerns arrest, and section 28(5) concerns distraint of movables only. Section 30A relates to appeals, not recovery.

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