|
RIGHTS OF FINANCIAL CORPORATION
IN CASE OF DEFAULT
-
Where any industrial concern, which is under a liability to
the Financial corporation under an agreement, makes any default
in repayment of any loan or advance or any installment thereof
or in meeting its obligations in relation to any guarantee given
by the Corporation or otherwise fails to comply with the terms
of its agreement with the Financial Corporation, the Financial
Corporation shall have the right to takeover the management
or possession or both of the industrial concern as the right
to transfer by way of lease or sale and realise the property
pledged, mortgaged, hypothecated or assigned to the Financial
Corporation.
-
Any transfer of property made by the Financial Corporation,
in exercise of its powers under sub-section (1), shall vest
in the transferee all the rights in or to the property transferred
as if the transfer has been made by the owner of the property.
-
The Financial Corporation shall have the same rights and powers
with respect to goods manufactured or produced wholly or partly
from goods forming part of the security held by it as it had
with respect to the original goods.
-
Where any action has been taken against an industrial concern
under the provisions of sub-section (1), all costs, charges
and expenses which in the opinion of the Financial Corporation
have been properly incurred by it as incidental thereto shall
be recoverable from the industrial concern and the money which
is received by it shall, in the absence of any contract to the
contrary, be held by it in trust, to be applied firstly, in
payment of such costs, charges and expenses and secondly, in
discharge of the debt due to the Financial Corporation, and
the residue of the money so received shall be paid to the person
entitled thereto.
-
Where the Financial Corporation has taken any action against
an industrial concern under the provisions of sub-section (1),
the Financial Corporation shall be deemed to be the owner of
such concern, for the purpose of suits by or against the concern,
and shall sue and be sued in the name of the concern.
TIME LIMIT FOR TAKING ACTION AFTER NOTICE IS SERVED
The secured creditor can take action any time after the expiry
of 60 days notice. There is no time limit. However action must be
taken within reasonable time. The notice cannot be said to be perpetually
valid. If the creditor does any act which is contrary to the intention
of notice (e.g. reschedules loans or gives further time for repayment),
it can be said that the notice has abated and no action can be taken
against such notice.
|
