Section 36 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
No secured creditor shall be entitled to take all or any of the measures under sub-section (4) of section 13, unless his claim in respect of the financial asset is made within the period of limitation prescribed under the Limitation Act, 1963 (36 of 1963).
Summary
- A secured creditor cannot take recovery measures under this Act if their claim for the money is too old.
- The time limits for enforcing a claim are governed by a separate law called the Limitation Act of 1963.
- If the legal time period allowed by the Limitation Act has expired, the creditor is barred from using the strict actions detailed in sub-section (4) of Section 13, such as seizing the secured property.
Practical examples
FAQ
1. Does this Act create its own special time limits for banks to recover money?
No, it relies entirely on the time limits already established by the Limitation Act of 1963.
2. What happens if a bank tries to seize my property after the time limit has expired?
The bank is legally barred from using the recovery measures in this Act, such as taking possession of your secured assets.
3. Which specific recovery actions are restricted by this time limit?
The restriction applies to the actions listed in sub-section (4) of Section 13, which includes taking possession of assets or taking over the management of a business.
Test yourself
Q1.Under Section 36 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, which law determines if a secured creditor is too late to make a claim?
Q2.Under Section 36 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, what specific actions are blocked if the period of limitation has expired?
Q3.If a bank wants to take over the management of a borrower's business under sub-section (4) of Section 13, how does Section 36 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 affect this?
Q4.Under Section 36 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, who is restricted by the period of limitation?