J.CHELAMESWAR, J. - (1.) LEAVE granted in all the SLPs.
(2.) THE Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (hereinafter referred to as the 'Act'), was made by the Parliament in the year 2002. The Statement of Objects and Reasons appended to the Act explained the purpose behind the enactment as follows: - "There is no legal provision for facilitating securitization of financial assets of banks and financial institutions. Further, unlike international banks, the banks and financial institutions in India do not have power to take possession of securities and sell them. Our existing legal framework relating to commercial transactions has not kept pace with the changing commercial practices and financial sector reforms. This has resulted in slow place (sic pace) of recovery of defaulting loans and mounting levels of non -performing assets of banks and financial institutions." The enactment was preceded by three Committee Reports - two headed by Mr. M. Narasimham[1] and the third by Mr. T.R. Andhyarujina[2].
(3.) RECOVERY of money from a debtor by resorting to the filing of a suit takes painfully long time in this country, for various reasons[3]. Huge amounts of money are lent by various banks and other financial institutions. Speedy recovery of the monies due to such institutions is an important element determining the efficiency not only of such institutions but also becomes an important factor for the financial health of the country. In order to facilitate banks and financial institutions (hereinafter collectively referred to as "CREDITORS" for the sake of convenience) to speedily recover the monies due to them from the borrowers, Parliament made a law called 'The Recovery of Debts due to Banks and Financial Institutions Act, 1993' (51 of 1993) under which banks and financial institutions could approach a tribunal constituted under the said Act. It deals exclusively with the claims for the recovery of the monies due from the borrowers to the CREDITORS. Apart from creating such an exclusive forum, the Act also provided for a more simpler procedure for the adjudication of the legality of the claims brought before it by the CREDITOR and a procedure for speedy recovery of sums so adjudicated.;