Skip to content

CS Professional · Corporate Restructuring, Valuation and Insolvency · Debt Recovery and SARFAESI

Meridian Steels Ltd owes secured debts to two banks, Bank A and Bank B, which have filed recovery applications before the DRT at Pune and the DRT at Chennai respectively. Vistara Asset Reconstruction Co. Ltd acquires both financial assets and wants all pending applications heard together. What is the correct course under the SARFAESI Act, 2002?

The asset reconstruction company should apply to the Appellate Tribunal having jurisdiction over either DRT where applications are pending. After hearing the parties, that Tribunal may transfer all pending applications to any one DRT. A DRT itself cannot take over another DRT's case.

  1. AIt may apply to the Appellate Tribunal having jurisdiction over either DRT for transfer of all pending applications to any one DRTCorrect
  2. BIt may apply directly to the DRT at Pune, which can pull the Chennai application to itself
  3. CIt must withdraw one application and refile it before the other DRT
  4. DIt may apply to the High Court, as DRTs cannot be consolidated

Explanation

Section 5A allows an asset reconstruction company holding financial assets comprising secured debts of more than one bank, with applications pending before two or more DRTs, to apply to the Appellate Tribunal having jurisdiction over any of those DRTs. The Appellate Tribunal may then transfer all applications to one DRT. A DRT has no power to pull cases from another DRT, so the Pune option is wrong.

Did you get it right without looking?

One question tells you little. A timed set on Debt Recovery and SARFAESI shows your real accuracy, how long you take and where you lose marks.

Practise Debt Recovery and SARFAESIFree diagnostic mock

More Debt Recovery and SARFAESI questions