Section 5 in The Securitisation And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002
5. Acquisition of rights or interest in financial assets.
(1)Notwithstanding anything contained in any agreement or any other law for the time being in force, any [asset reconstruction company] [Substituted by Act No. 44 of 2016.] may acquire financial assets of any bank or financial institution,(a)by issuing a debenture or bond or any other security in the nature of the debenture, for consideration agreed upon between such company and the bank or financial institution, incorporating therein such terms and conditions as may be agreed upon between them; or(b)by entering into an agreement with such bank or financial institution for the transfer of such financial assets to such company on such terms and conditions as may be agreed upon between them.(1A)[ Any document executed by any bank or financial institution under sub-section (1) in favour of the asset reconstruction company acquiring financial assets for the purposes of asset reconstruction or securitisation shall be exempted from stamp duty in accordance with the provisions of section 8F of the Indian Stamp Act, 1899:Provided that the provisions of this sub-section shall not apply where the acquisition of the financial assets by the asset reconstruction company is for the purposes other than asset reconstruction or securitisation.] [Inserted by Act No. 44 of 2016.](2)If the bank or financial institution is a lender in relation to any financial assets acquired under sub-section (1) by the [asset reconstruction company] [Substituted by Act No. 44 of 2016.], such [asset reconstruction company] [Substituted by Act No. 44 of 2016.] shall, on such acquisition, be deemed to be the lender and all the rights of such bank or financial institution shall vest in such company in relation to such financial assets.(2A)[ If the bank or financial institution is holding any right, title or interest upon any tangible asset or intangible asset to secure payment of any unpaid portion of the purchase price of such asset or an obligation incurred or credit otherwise provided to enable the borrower to acquire the tangible asset or assignment or licence of intangible asset, such right, title or interest shall vest in the asset reconstruction company on acquisition of such assets under sub-section (1).] [Inserted by Act No. 44 of 2016.](3)Unless otherwise expressly provided by this Act, all contracts, deeds, bonds, agreements, powers-of-attorney, grants of legal representation, permissions, approvals, consents or no-objections under any law or otherwise and other instruments of whatever nature which relate to the said financial asset and which are subsisting or having effect immediately before the acquisition of financial asset under sub-section (1) and to which the concerned bank or financial institution is a party or which are in favour of such bank or financial institution shall, after the acquisition of the financial assets, be of as full force and effect against or in favour of the [asset reconstruction company] [Substituted by Act No. 44 of 2016.] as the case may be, and may be enforced or acted upon as fully and effectually as if, in the place of the said bank or financial institution, [asset reconstruction company] [Substituted by Act No. 44 of 2016.] as the case may be, had been a party thereto or as if they had been issued in favour of [asset reconstruction company] [Substituted by Act No. 44 of 2016.] as the case may be.(4)If, on the date of acquisition of financial asset under sub-section (1), any suit, appeal or other proceeding of whatever nature relating to the said financial asset is pending by or against the bank or financial institution, save as provided in the third proviso to sub-section (1) of section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) the same shall not abate, or be discontinued or be, in any way, prejudicially affected by reason of the acquisition of financial asset by the [asset reconstruction company] [Substituted by Act No. 44 of 2016.] as the case may be, but the suit, appeal or other proceeding may be continued, prosecuted and enforced by or against the [asset reconstruction company] [Substituted by Act No. 44 of 2016.] as the case may be.(5)[ On acquisition of financial assets under sub-section (1), the [asset reconstruction company] [Inserted by Act No.1 OF 2013] 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 and on receipt of such application, such Debts Recovery Tribunal or the Appellate Tribunal or court or Authority shall pass orders for the substitution of the [asset reconstruction company] [Substituted by Act No. 44 of 2016.] in such pending suit, appeal or other proceedings.][5-A. Transfer of pending applications to any one of Debts Recovery Tribunals in certain cases. [Inserted by the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2004 (30 of 2004), Section 5 (w.e.f. 11.11.2004).](1)If any financial asset, of a borrower acquired by a [asset reconstruction company] comprise of secured debts of more than one bank or financial institution for recovery of which such banks or financial institutions has filed applications before two or more Debts Recovery Tribunals, the [asset reconstruction company] [Substituted by Act No. 44 of 2016.] may file an application to the Appellate Tribunal having jurisdiction over any of such Tribunals in which such applications are pending for transfer of all pending applications to any one of the Debts Recovery Tribunals as it deems fit.(2)On receipt of such application for transfer of all pending applications under sub-section (1), the Appellate Tribunal may, after giving the parties to the application an opportunity of being heard, pass an order for transfer of the pending applications to any one of the Debts Recovery Tribunals.(3)Notwithstanding anything contained in the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51of 1993), any order passed by the Appellate Tribunal under sub-section (2)shall be binding on all the Debts Recovery Tribunals referred to in sub-section (1) as if such order had been passed by the Appellate Tribunal having jurisdiction on each such Debts Recovery Tribunal.(4)Any recovery certificate, issued by the Debts Recovery Tribunal to which all the pending applications are transferred under sub-section (2), shall be executed in accordance with the provisions contained in sub-section (23) of section 19 and other provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) shall, accordingly, apply to such execution.]
