SARFAESI : RBI to be restored as regulator for banking, non-banking institutions and securitisation agencies for deciding period after which loans could be treated as NPA; 2004 amendment to Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests (SARFAESI) Act, 2002 declared unconstitutional and contrary to object of Act
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[2014] 49 taxmann.com 211 (Gujarat)
HIGH COURT OF GUJARAT
Ionik Metallics
v.
Union of India
BHASKAR BHATTACHARYA, CJ.
AND J.B. PARDIWALA, J.
Special Civil Application Nos. 14908 of 2012 and others
APRIL 24, 2014
Section 2(1)(o) of the Securitisation and Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002, read with article 14 of the Constitution of India - Non-performing assets - Definition of - Whether para 2.1 of guidelines issued by RBI that classify various number of days for various types of banks and financial institutions are not contrary to any statutory provisions or Constitution - Held, yes - Whether 2004 amendment in Securitisation Act was illegal, unconstitutional and contrary to object of Act as it took away powers from RBI to decide whether asset was NPA or not and financial institutions became free to have their own regulations for NPA - Held, yes - Whether thus, in matter of fixing norms/guidelines for NPA, all financial institutions should be guided by RBI policy as same is specific object of Act - Held, yes [Paras 21, 24, 34, 46 & 55]
Circulars & Notifications: RBI Circular DBOD No. BC.129/21.04.043/92 dated 27-4-1992 and DBOD No. BP.BC.116 / 21.04.048 / 2000-2001, dated 2-5-2001
■■■
[2014] 49 taxmann.com 211 (Gujarat)
HIGH COURT OF GUJARAT
Ionik Metallics
v.
Union of India
BHASKAR BHATTACHARYA, CJ.
AND J.B. PARDIWALA, J.
Special Civil Application Nos. 14908 of 2012 and others
APRIL 24, 2014
Section 2(1)(o) of the Securitisation and Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002, read with article 14 of the Constitution of India - Non-performing assets - Definition of - Whether para 2.1 of guidelines issued by RBI that classify various number of days for various types of banks and financial institutions are not contrary to any statutory provisions or Constitution - Held, yes - Whether 2004 amendment in Securitisation Act was illegal, unconstitutional and contrary to object of Act as it took away powers from RBI to decide whether asset was NPA or not and financial institutions became free to have their own regulations for NPA - Held, yes - Whether thus, in matter of fixing norms/guidelines for NPA, all financial institutions should be guided by RBI policy as same is specific object of Act - Held, yes [Paras 21, 24, 34, 46 & 55]
Circulars & Notifications: RBI Circular DBOD No. BC.129/21.04.043/92 dated 27-4-1992 and DBOD No. BP.BC.116 / 21.04.048 / 2000-2001, dated 2-5-2001
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