Imagine a legal landscape with two debt recovery roads – one older, one newer. Section 42 of the SARFAESI Acts, 2002 acts like a decisive signpost, declaring: "From now on, we follow the new path!"
This section essentially does two things:
- Says goodbye to the past: It officially repeals the "Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Second) Ordinance, 2002." Think of it as closing the book on an earlier attempt at debt recovery with a different set of rules.
- Connects the dots: Despite closing the old road, Section 42 ensures a smooth transition. Anything done or any action taken under the old Ordinance remains valid and is now considered as having been done under the corresponding provisions of the new SARFAESI Act. Imagine all the travelers on the old road seamlessly merging onto the new one, continuing their journey without disruption.
So, why this switch from one law to another? There are several reasons:
- Updating and Streamlining: The SARFAESI Act builds upon the foundation laid by the Ordinance but makes adjustments for improved efficiency, clarity, and comprehensiveness. It's like taking the good parts of the old, adding refinements, and creating a more robust solution.
- Consolidation and Consistency: Having a single set of rules for debt recovery simplifies the process and reduces confusion. With the Ordinance repealed, the SARFAESI Act becomes the central reference point for lenders, borrowers, and authorities, fostering a more stable and predictable environment.
- Future-proofing: The SARFAESI Act takes into account potential future developments in the financial landscape. Its broader scope and updated framework allow it to adapt and remain relevant in the face of evolving economic realities.
In essence, Section 42 marks a turning point in India's debt recovery landscape. It closes the chapter on an earlier law while ensuring a seamless transition to the more comprehensive and adaptable SARFAESI Act. This move paves the way for a smoother, more efficient, and future-proof approach to tackling debt challenges within the financial system
