Section 11 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
Where any dispute relating to securitisation or reconstruction or nonpayment of any amount due including interest arises amongst any of the parties, namely, the bank, or financial institution, or 1[asset reconstruction companyor] 2[qualified buyer], such dispute shall be settled settled by conciliation or arbitration as provided in the Arbitration and Conciliation Act, 1996 (26 of 1996), as if the parties to the dispute have consented in writing for determination of such dispute by conciliation or arbitration and the provisions of that Act shall apply accordingly.
Summary
- Any dispute about the process of managing bad loans or failing to pay money must be settled using specific legal resolution methods.
- Disputes can happen between various parties, including banks, financial institutions, reconstruction companies, and qualified buyers, who are large institutional investors.
- The required methods for settling these disagreements are conciliation, which is a friendly settlement process, or arbitration, which is a private legal trial.
- This law treats the parties as if they have already signed a written agreement to use these settlement methods for any dispute that comes up.
Practical examples
FAQ
1. Which law governs the resolution of disputes under Section 11 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?
Disputes are settled according to the Arbitration and Conciliation Act, 1996, as if the parties agreed to it in writing.
2. Who can be a party to a dispute under Section 11 of the SARFAESI Act?
The parties can be a bank, a financial institution, an asset reconstruction company, or a qualified buyer.
3. Does Section 11 of the Act apply to disputes about interest payments?
Yes, Section 11 specifically mentions disputes relating to non-payment of any amount due, including interest.
Test yourself
Q1.Under Section 11 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, how must a dispute between an ARC and a bank be settled?
Q2.According to Section 11 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, which specific law provides the rules for solving these disputes?
Q3.Under Section 11 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, is a written agreement for arbitration required?
Q4.Which group is NOT listed as a party for dispute resolution under Section 11 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?