CAIIB BRBL Module C Unit 9 : Miscellaneous Provisions

03/11/2023

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CAIIB Paper 4 BRBL Module C Unit 9 : Miscellaneous Provisions (New Syllabus)

IIBF has released the New Syllabus Exam Pattern for CAIIB Exam 2023. Following the format of the current exam, CAIIB 2023 will have now four papers. The CAIIB Paper 4 (BANKING REGULATIONS AND BUSINESS LAWS) includes an important topic called “Miscellaneous Provisions”. Every candidate who are appearing for the CAIIB Certification Examination 2023 must understand each unit included in the syllabus.

In this article, we are going to cover all the necessary details of CAIIB Paper 4 (BRBL) Module C (IMPORTANT ACTS/LAWS & LEGAL ASPECTS OF BANKING OPERATIONS – PART B) Unit 9 : Miscellaneous Provisions, Aspirants must go through this article to better understand the topic, Miscellaneous Provisions and practice using our Online Mock Test Series to strengthen their knowledge of Miscellaneous Provisions. Unit 9 : Miscellaneous Provisions

Non-applicability Of The Provisions Of The SARFAESI Act In Certain Cases

Section 31 gives the details of excluded securities to which the Act is not applicable.

A lien, on any goods, money or security given by or under the Indian Contract Act, 1872 or the Sale of Goods Act, 1930
A pledge of movable goods, within the meaning of Section 172 of the Indian Contract Act, 1872.
Creation of security interest in any vessel as defined within the meaning of Section 3(55) of the Merchant Shipping Act, 1958.
Any conditional sale, hire-purchase or lease or any other contract in which no security interest has been created.
Any rights of unpaid seller under Section 47 of the Sale of Goods Act, 1930.

Any properties not liable for attachment or sale under the first proviso to Section 60(1) of the Civil Procedure Code, 1908.
Any security interest for securing repayment of any financial asset not exceeding one lakh rupees.
Any security interest created in agricultural land.
Any case, in which the amount due is less than twenty per cent of the principal amount and interest thereunder.

Protection Of Action Taken In Good Faith

The Reserve Bank or the Central Registry or any secured creditor or any of its officers are protected for actions taken in good faith by the provisions made in the Act. For actions taken or initiated under the Act no suit, prosecution or any other legal proceeding can be taken against the Reserve Bank or the Central Registry or any secured creditor or any of its officers.
This protection is given so that actions contemplated and authorized under SARFAESI Act, can be taken without fear of counteraction from the borrower or any other person having interest in the property.

Offences By Companies

As per Section 33 of the Act If a company and its officers commit any offence under the provisions of the SARFAESI Act the same is punishable.
If any offence is committed under the provisions of this Act by a company, such company, as well as any person who is in charge of the business of the company, are deemed to be guilty of the offence and they are liable to be prosecuted and punished. It is permissible for a person acting for the company to prove that the offence was committed without his knowledge or that he had exercised due diligence to prevent the commission of such offence. In such cases and on proving his stand the person concerned shall not be punishable.
If such offence is committed with the consent or connivance of any director or officer of the company, such director or officer shall be deemed to be guilty for the offences along with the company.
The penal provisions are applicable to all categories of borrowers such as individuals, partnership firms, companies incorporated under the Companies Act or any other association of individuals.

Civil Court Not To Have Jurisdiction

The SARFAESI Act has conferred jurisdiction on many matters to the debts recovery tribunal or the appellate tribunal. Therefore, for any such matters where empowerment and jurisdiction is given or vested with the debts recovery tribunal or the appellate tribunal, no Civil Court shall have jurisdiction to entertain any suit or proceedings relating to those matters.
Similarly, any Court or authority cannot grant injunction in such matters and actions taken, or to be taken, under this Act as well as under Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

Limitation

The actions that secured creditor can take against the security under the SARFAESI Act are required to be taken within the limitation period as prescribed by the provisions of the Limitation Act (Section 36 of the SARFESAI Act.).
That means, the action has to be taken within three years or twelve years as the case may be, from the date on which the cause of action arose.
All secured creditors are required to take measures such as taking possession of the securities, provided their claim is within the period of limitation. It will be necessary for the banks and financial institutions to comply with the limitation aspect. If after sale of securities the claim is not fully satisfied and still there are any dues to be recovered from the borrower, the creditor is required to file civil suit before the Civil Court or a claim before the debt recovery tribunal within the limitation period.

Power Of The Central Government To Make Rules

For carrying out the provisions of this Act, the Central Government can frame rules and notify them in the Official Gazette. The Act also allows the Government to notify the rules in the Electronic Gazette as defined in the Information Technology Act, 2000,e. on the website of the Government.
Whenever the Government makes a rule under the Act, the rule is required to be kept before each House of Parliament, while in session for a total period of thirty days. Both the Houses should agree to the rules as framed and they can make modifications therein. The rule gets the validity in the manner as decided by both the Houses.

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CAIIB 4 Module C Unit 9 – Miscellaneous Provisions ( Ambitious_Baba )