Multiple choice

Which of the following is not the change introduced by the SARFAESI Act in the law relating to creation and enforcement of security?

  1. Security interest is defined in generic term giving effect to substance over form to a limited extent

  2. Financial assets are not freely assignable

  3. Powers of enforcement of security interest have been given to the banks and financial institutions

  4. Take the matter before DRT for resolving issues raised in the reply
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The changes introduced by the SARFAESI Act in the law relating to creation and enforcement of security over property are as under:

Financial assets are made freely assignable notwithstanding anything contained in any law or any agreement (Section 5) Security interest is defined in generic term giving effect to substance over form to a limited extent Powers of enforcement of security interest have been given to the banks and financial institutions Definition of property is made wide to cover variety of property rights Since the existing law in India does not permit enforcement of mortgages of immovable properties, the same are also included in the definition of security interest with power of enforcement without the intervention of the Courts.

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