Recovery Law

Recovery law in India pertains to the legal provisions and procedures for the recovery of debts, dues, and other financial obligations. The two primary laws governing recovery in India are the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDBFI Act) and the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).

RDDBFI Act: The RDDBFI Act provides for the establishment of Debt Recovery Tribunals (DRTs) to adjudicate on recovery matters related to banks and financial institutions. DRTs have the power to recover debts from borrowers by attaching and selling their assets.

SARFAESI Act: The SARFAESI Act empowers banks and financial institutions to enforce the security interest created in their favor by the borrower. Under this act, banks can issue a notice to the borrower to repay the outstanding dues within 60 days, failing which the bank can take possession of the secured asset and sell it to recover the dues.

Insolvency and Bankruptcy Code (IBC): The IBC is a comprehensive legislation that consolidates and amends the laws relating to reorganization and insolvency resolution of corporates, partnership firms, and individuals. It provides for the resolution of insolvency by a committee of creditors or liquidation of the debtor's assets.

Limitation Act: The Limitation Act prescribes the time limit within which recovery proceedings can be initiated. For example, a suit to recover a debt must be filed within three years from the date the debt became due.

Recovery Suit: A suit for recovery is a civil suit filed by a creditor to recover a debt or a sum of money owed to them by a debtor. The creditor can be an individual, a company, a partnership firm, or any other legal entity. The debtor can also be an individual, a company, or any other legal entity. The procedure for filing a suit for recovery in India is governed by the Civil Procedure Code (CPC)

Overall, recovery law in India is a complex and evolving area of law and the specifics of each case can vary greatly. It is always advisable to seek legal advice if you are involved in a recovery matter.


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