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

Under the proviso to Section 27 of the SARFAESI Act, as inserted by Act 44 of 2016 with effect from 24-1-2020, what is the position of the fine of up to five thousand rupees per day of default for failing to file particulars of a security interest under Section 23?

The proviso to Section 27 deems the Section omitted from the date the Chapter and the amended Section 23 came into force. The daily fine of up to five thousand rupees for default in filing particulars therefore does not apply to secured creditors or companies.

  1. AThe provisions of Section 27 are deemed to have been omitted from the date the Chapter and the amended Section 23 came into forceCorrect
  2. BThe fine applies in full to every secured creditor that filed particulars late
  3. CThe fine applies only to officers of asset reconstruction companies and not to secured creditors
  4. DThe fine is reduced to one thousand rupees per day for secured creditors

Explanation

Section 27 prescribes a fine up to five thousand rupees per day, but its proviso says the Section is deemed omitted from the date the provisions of the Chapter and Section 23 as amended by the 2016 Amendment Act came into force. So the penalty does not operate in practice. The other options assume the fine still applies.

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