Industrial Reconstruction Bank of India Act,1984
Act No : 62
Section :
Power of Reconstruction Bank relating to property offered as primaryor collateral security.
41. Power of Reconstruction Bank relating to property offered as primary or collateral security.- (1) Where a person has offered any property as security, whether primary or collateral, for any assistance given by the Reconstruction Bank to any industrial concern, or to such person, and a default has been committed by the industrial concern or by such person in the payment of any dues of the Reconstruction Bank or in meeting any obligation in relation to the assistance given by the Reconstruction Bank to the industrial concern aforesaid, the Reconstruction Bank shall have the right to take over the management, or possession, or both, of the property so offered as security, and shall have the right to transfer by lease or sale the property aforesaid for the purpose of realising its dues. (2) Any transfer of property made by the Reconstruction Bank, in exercise of the powers conferred on it by sub-section (1), shall vest in the transferee, the rights in or in relation to the property transferred as if the transfer had been made by the owner of such property. (3) Where any action has been taken under the provisions of sub- section (1), costs, charges and expenses which, in the opinion of the Reconstruction Bank, have been properly incurred by it as incidental thereto, shall be recoverable out of the money received by the Reconstruction Bank by the sale or lease of the property referred to in sub-section (1) and 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 the discharge of the dues of the Reconstruction Bank and the residue of the money so received shall be paid to the person entitled thereto in accordance with his rights and interests. (4) The Reconstruction Bank may, instead of exercising the powers conferred on it by sub-section (1), apply for the sale or lease of the property referred to in sub-section (1) or for any other relief, to the High Court within the local limits of whose jurisdiction the property aforesaid is situated, and, thereupon, the provisions of section 40 shall, without prejudice to the provisions of section 69 of the Transfer of Property Act, 1882 (4 of 1882), apply thereto as if the property aforesaid were the property referred to in section 40, and powers shall be exercisable by the High Court accordingly.
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