INDIA
brand retail, the decision would be actually implemented only in 18 cities. In a federal system no state could be forced to implement
FDI in multi-brand retail. It was not correct to say that after the implementation of the policy the country would be sold out
THIRD READING: INDIA
The Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Bill, 2011 The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was enacted to regulate securitization and reconstruction of financial assets and enforcement of security interest for matters connected. This Act enables the banks and financial institutions to realize long-term assets, manage problems of liquidity, asset liability mismatch and improve recovery by exercising powers to take possession of securities, sell them and reduce non-performing assets by adopting measures for recovery or reconstruction. The Act further provides for setting up of asset reconstruction companies which are empowered to take possession of secured assets of the borrower including the right to transfer by way of lease, assignment or sale and realize the secured assets and take over the management of the business of the borrower. Under the provisions of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002:
(a) The reconstruction companies or securitisation companies do not have the facility to convert their debt into equity in cases of business reconstruction or rehabilitation or revival as required under section 9 of the said Act; (b) The banks and financial institutions find it difficult to meet the requirement of considering the representations from borrowers and communicate their response within a period of seven days as required under section 13 of the said Act ;
(c) Even though the banks, as secured creditors, are empowered to sell the securities to realise the defaulted loans, they are not empowered to accept the property in full or partial satisfaction of the claim against the defaulted bor- rower, if no bidder comes to bid or banks are unable to find a buyer for such assets as per the provisions of section 13 of the said Act ; (d) There was no provision enabling the banks or persons to file a caveat peti- tion against the application filed by the defaulted borrower before the Debts Recovery Tribunal under section 18 of the said Act
Considering the scenario in its totality and with a view to address the aforementioned problems which arose, the government decided to outline further detailed provisions amending the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Another fiscal legislation namely, The Recovery of Debts Due to Banks
and Financial Institutions Act, 1993 was enacted with a view to provide for the establishment of Debts Recovery Tribunals for expeditious adjudication and recovery of debts due to banks and financial institutions. To ensure expeditious adjudication and recovery of dues of banks and
financial institutions, remove legal anomalies and strengthen the Recovery Tribunals, the said Act was amended in 1995, 2000 and 2004. The measures of recovery through the Debts Recovery Tribunal are not available to multi- State co-operative banks. In order to provide an additional and effective
recovery mechanism to multi-State co-operative banks, it was considered necessary to give an option to the multi-State co-operative banks either to initiate proceedings for recovery of its debts under the Multi-State Co-operative Societies Act, 2002 or the Debts Recovery Tribunal under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The government accordingly brought forward the Enforcement of Security
Interest and Recovery of Debts Laws (Amendment) Bill, 2011. Highlights of the amending Bill include a new sub-section inserted into
section 5, stating that with the acquisition of financial assets, the securitisation company or reconstruction company may with the consent of the originator, file an application before the Debts Recovery Tribunal or the Appellate Tribunal or any court or other Authority for the purpose of substitution of its name in any pending suit, appeal or other proceedings. In Section 3, an amendment was made to increase the period of response
to be sent by the banks or financial institutions to the representation of the borrower from seven to 15 days. In Section 14 of the Principal Act, amendments were made by insertion
of a proviso stipulating that any application by the secured creditor needed to be accompanied by an affidavit duly affirmed by the authorized officer of the secured creditor or any person claiming a right to appear before the Tribunal or the Court of District Judge or the Appellate Tribunal or the High Court as the case may be. Detailed provisions have been laid providing registration of transactions
of securitization, reconstruction or creation of security interest in the Central Registry, which are subsisting on or before the establishment of Central Registry and also to give powers to the Central Government to extend time for filling of such transaction with the Central Registry. Amendments were also made in the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. They included:
a) To include the multi-State co-operative banks in the definition of ‘bank’ under clause (d) of section 2; b) To permit the multi-state co-operative banks, with respect to debts due before or after the commencement of the proposed legislation, to opt either to initiate proceedings under the Multi-State Co-operative Societies Act, 2002 or to initiate the proceedings before the Debts Recovery Tribunal; and c) To enable the banks and financial institutions to enter into settlement or compromise with the borrower and also to empower the Debts Recovery Tribunal to pass an order acknowledging such settlement or compromise.
The amendments proposed were broadly perceived by Members to be
timely fiscal effective initiatives during discussion on the Bill in both Houses of Parliament. The Amending Bill was passed by Lok Sabha on 10 December 2012 and
by Rajya Sabha on 20 December 2012. The Bill as passed by both Houses of Parliament was assented to by the President of India on 3 January 2013.
The Parliamentarian | 2013: Issue One | 81
to foreign country and Wal-Mart would take over the country. If anybody wanted to enter in the multi-brand retail in the country
then first of all he would have to invest 100 million dollar in the country. The retailer had to buy 30
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