securitisation act

Querist : Anonymous (Querist) 05 September 2010 This query is : Resolved
TajaNews - National
SC upholds constitutional validity of Securitisation Act - 4-, 2004 - 08: 0

New Delhi: The Supreme Court today upheld the constitutional validity of the Securtisation Act empowering the financial institutions to attach and sell assets of companies who have defaulted in repaying loans taken by them.

However, the court declared section 17 (2) of the Act as unconstitutional. This provided for pre-deposit of 75 per cent of the liability, if defaulting company wanted to appeal against the order of attachment of its assets. [ TajaNews
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s.subramanian (Expert) 05 September 2010
That was a judgment of the supreme court in Mardia Chemicals case,which is a land mark judgment in which the constitutional validity of several provisions of Sarfaesi Act were considered by the Supreme court. The deposit of the liability was made a condition precedent by the said Act for appealing against the order,which the Supreme Court disagreed and declared as unconstitutional.