2002 Supreme(SC) 2280

SUPREME COURT OF INDIA
V.N. Khare, Ashok Bhan, Arun Kumar, JJ.
M/s. Mardia Chemicals Ltd. - Appellant
Versus
Union of India & Anr. Etc. Etc.- Respondents
I.A. No. 2 of 2002 in T.C. No. 93 of 2002
Decided On : 13-12-2002

Secured creditors have rights and restrictions under Clause 13 of the Securitisation & Reconstruction of Financial Assets and Enforcement of Security Interest (Second) Ordinance, 2002.

Headnote:

Secured Creditors - Securitisation & Reconstruction of Financial Assets - Interpretation of Clause 13

Fact of the Case:

The court ruled that secured creditors can proceed against the borrowers under specific clauses of the Securitisation & Reconstruction of Financial Assets and Enforcement of Security Interest (Second) Ordinance, 2002, but cannot part with the assets of the borrower by way of lease, assignment, or sale. The order does not preclude secured creditors from taking recourse to other alternatives provided under the ordinance.

Finding of the Court:

The court analyzed the provisions of Clause 13 of the Securitisation & Reconstruction of Financial Assets and Enforcement of Security Interest (Second) Ordinance, 2002 and concluded that secured creditors have certain rights and restrictions when dealing with the assets of the borrower.

Issues: Interpretation of Clause 13 of the Securitisation & Reconstruction of Financial Assets and Enforcement of Security Interest (Second) Ordinance, 2002

Ratio Decidendi: The key legal provision discussed by the court is Clause 13 of the Securitisation & Reconstruction of Financial Assets and Enforcement of Security Interest (Second) Ordinance, 2002, which outlines the rights and restrictions of secured creditors when dealing with the assets of the borrower.

Final Decision: The court's final decision allows secured creditors to proceed against the borrowers under specific clauses of the ordinance but imposes restrictions on parting with the assets of the borrower by way of lease, assignment, or sale.