In the given query it can be interpreted that, Sec.13(9) of SARFAESI Act provides that in the case of multiple financing by more than one secured creditors, no secured creditor shall be entitled to exercise any or all of the rights conferred on him under or pursuant to sub-section (4) unless exercise of such right is agreed upon by the secured creditors representing not less than 60% in value of the amount (including principal, interest and any other dues payable) outstanding as on a record date (the date as agreed upon by the secured creditors.
In case of multiple banking it is advisable that secured creditors representing not less than 60% in value of the amount outstanding as on a record date enter into an "Inter Se" agreement as in case of consortium lending and that all the banks give an 'Irrevocable Letter of Authority' to one or more of the bank(s) to initiate action under the Act and distribute the sale proceeds among the banks as per their ranking status (i.e. as per their priority), clearly reciting the manner of payment / appropriation. It is necessary that all such banks incorporate their sharing pattern clearly in the 'inter se agreement'.
The bank(s) enforcing the security interest shall be entitled to appropriate the legally incurred expenses first, before distributing the sale proceeds to the charge holders as per their priority. Letter of Authority must clearly spell out all the above stipulations on payment of sale proceeds The Authorised Officer of one or more of such authorised banks/bank(s) shall be deemed to be authorized by the multiple banks to take action under the Act.
