Section 1 of The Recovery Of Debts And Bankruptcy Act, 1993
- (1)This Act may be called the Recovery of Debts 1[and Bankruptcy] Act, 1993.
- (2)It extends to the whole of India except the State of Jammu and Kashmir*.
- (3)It shall be deemed to have come into force on the 24th day of June, 1993.
- (4)2[Save as otherwise provided, the provisions of this Code] Act shall not apply where the amount of debt due to any bank or financial institution or to a consortium of banks or financial institutions is less than ten lakh rupees or such other amount, being not less than one lakh rupees, as the Central Government may, by notification, specify.
Summary
- The full name of this law is The Recovery of Debts and Bankruptcy Act, 1993.
- This law applies to the entire country of India, though the main text originally excluded the State of Jammu and Kashmir.
- It is treated as having started on June 24, 1993.
- This law only applies to cases where the debt owed to a bank or financial institution is ten lakh rupees or more.
- The Central Government has the power to change this minimum limit by giving a public notice, but they cannot set it lower than one lakh rupees.
Practical examples
FAQ
1. What is the official name of this law?
It is called The Recovery of Debts and Bankruptcy Act, 1993.
2. When did this law actually start working?
It is considered to have come into force on June 24, 1993.
3. Can a bank use this law for a small debt of 50,000 rupees?
No, the law generally requires the debt to be at least ten lakh rupees, and the government cannot lower that limit below one lakh rupees.
Test yourself
Q1.Under Section 1 of The Recovery Of Debts And Bankruptcy Act, 1993, what is the default minimum debt amount required for the Act to apply?
Q2.According to Section 1 of The Recovery Of Debts And Bankruptcy Act, 1993, what is the earliest possible date the law is deemed to have come into force?
Q3.Under Section 1 of The Recovery Of Debts And Bankruptcy Act, 1993, what is the lowest limit the Central Government can set for the Act to apply through a notification?
Q4.According to the main text of Section 1 of The Recovery Of Debts And Bankruptcy Act, 1993, which area was originally excluded from the extent of the Act?