Non Performing Assets

Transfer of Non- perform Assets among savings banking concerns and Beyond Niloy Pyne comments on the recently issued ruling of the unequivocal Court, in the case of ICICI banking company Limited Versus Official recipient of APS Star Industries Ltd. & Ors. on whether non-performing assets (NPAs) can be transferred amidst banks without the concurrence of the borrowers. Background This case involved a transfer of Non Performing Assets (NPAs), relating to the borrower, APS Star Industries Ltd., from ICICI Bank to Kotak Mahindra Bank. The borrower was a company in liquidation. Upon the Assignee, Kotak Mahindra Bank seeked to substitute its name in intrust of one of the one-time(prenominal) creditors being ICICI, the Assignor of the debt, before the Company Court and that  the borrower objected on several(prenominal) grounds, including the insufficiency of the stamp duty paid on the agent of designation. The Company Court refused to recognize the Assignee on account of unlawful presentation of the document of transfer. On appeal, a Division judicial system of the Gujarat High Court upheld the Company Courts decision, only on a different ground, being that the assignment of debts by banks is not an activity permissible down the stairs the Banking legislation Act, 1949.

On further appeal, the Supreme Court considered chiefly two issues, which were, whether repose se transfer of debts between banks is an activity permissible under the Banking Regulation Act, 1949 and whether the Assignee Bank is entitled to substitution in place of the original lender / Assignor in proceedings relating to liquidation of the borrower company. Assignment of debts and the Banking Regulation Act, 1949 Considering the issue whether the inter se transfer of debts between banks is permissible, the Court examined in detail the scheme and provisions of the Banking Regulation Act, 1949 and concluded that assignment of NPAs is within the purview of a banks permitted business activity. According to the Supreme Court, the Reserve Bank of India (RBI) can... If you want to get a full essay, order it on our website: Ordercustompaper.com

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