A bankruptcy remote entity is a special-purpose vehicle (“SPV”) that is formed to hold a defined group of assets and to protect them from being administered as property of a bankruptcy estate. The corporate documents of bankruptcy remote like memorandum association and article association may also attempt to create disablements to a bankruptcy filing. For…
A Power of attorney (POA) is a written instruction by which one person is empowered to act on behalf of another. That is to say, to do any lawful act or series of lawful acts on behalf of the principal person by his agent. The Power of Attorney can be made in two types, special…
The mandate and power attorney are the rights cast upon a third person to act on behalf of the principal person/s. The rights of mandate and power of attorney holders are very similar in the operation of bank accounts but they are issued for different reasons and purposes. A mandate, is a simple letter of authority,…
The Government of India has amended the rules under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Central Registry) Rules, 2011(Referred as principal rules). The amendment to principal rules came into force from the date same were published in the gazette of India Part II section3 sub-section. (i) (January 22, 2016) .…
Following the ordinance empowering RBI to lay down the process of initiating steps under the Insolvency and Bankruptcy Code (IBC), an Internal Advisory Committee (IAC) is set up by RBI to oversee the specific steps that are initiated by bankers for resolution of a bad debt. In its first meeting on June 12, 2017, the…
The Section 2(16) of the Companies Act 2013 defines ‘Charge’ as “an interest or lien created on the property or assets of a company or any of its undertaking or both as security and includes mortgage”. Thus, ‘charge’ can be described as lender’s right to recover his dues by disposing-off the specified assets of the…
Basically, lien and pledge are forms of the right to retain goods for the same purpose i.e. both are security interest options for payment of debt. Though they look identical; there are certain differences which this article identifies herein. Lien: Lien is akin to bailment. It is the right to retain goods or securities belonging…
The lender’s right to the term “Hypothecation of assets” is not defined anywhere in the statute. Some courts have even compared hypothecation to the mortgage of movables. Hypothecation of assets is defined in SARFAESI ordinance 2002 as under; “a charge in or upon any movable property, existing or future, created by a borrower in favour…
[This article explains the relationship between the bank and the customer like creditor and the debtor, Lessor and the Lessee, Trustee and beneficiary, bailor and bailee, Principal and the agent, assigner and assignee etc. according to the type of service rendered by the bank.] Basically, the relationship between banker and customer is contractual in nature.…
[The proposed Bill seeks to amend four laws, namely the ”Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act)”, “Indian Stamp Act, 1899”, “Depositories Act, 1996” and RDDBFI Act 1993 (DRT act)] The Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Bill, 2016” was introduced…