Introduction:
Section 25 of the Sarfaesi Acts, 2002 holds paramount importance, requiring asset reconstruction companies or secured creditors to report satisfaction of security interests promptly. This provision guarantees transparency and accountability in monetary transactions. In this article, we dissect the intricacies of section 25, outlining the duties, procedural steps, and mechanisms in the area to cope with disputes. A complete understanding of this section is crucial in navigating the regulatory landscape of non-acting asset recovery.
Reporting of Security Interest Satisfaction
1. Obligation for Intimation:
Section 25 of the Sarfaesi Act outlines the responsibility of either an asset reconstruction company or secured creditors to promptly inform the Central Registrar within thirty days of making a complete payment or satisfaction regarding any security interest requiring registration under this Chapter.
1.1 Entry of Memorandum of Satisfaction:
Upon receipt of the intimation, as specified in subsection (1), the Central Registrar is mandated to issue an order for the entry of a memorandum of satisfaction in the Central Register, as stipulated in subsection (1A).
2. Borrower`s Notification and Registrar`s Action:
If the concerned borrower communicates to the Central Registrar against recording the payment or satisfaction mentioned in subsection (1), a series of actions ensue.
2.1 Registrar`s Notice:
The Central Registrar, upon receiving such notification from the borrower, is obligated to send a notice to the asset reconstruction company or secured creditors. The notice sets a timeframe, not exceeding fourteen days, within which the company or creditors are required to provide reasons why the payment or satisfaction should not be noted as informed to the Central Registrar.
2.2 Entry of Memorandum or Recording Valid Reasons:
- If no valid reasons are supplied in the special time frame, the principal Registrar is empowered to problem an order to enter a memorandum of delight in the relevant register.
- If valid reasons are provided by way of the borrower in the stipulated time, the imperative Registrar is needed to record a word to that effect in the central register. moreover, the borrower is duly knowledgeable of this action
