Attorney General (AG) Soli J. Sorabjee on Monday defended in the Supreme Court the Securitisation Act enacted to curb the menace of growing non-performing assets (NPAs), estimated at present at Rs 91,000 crores but suggested that in its implementation the laws of ‘‘fair-play’’ and ‘‘natural justice” should play their role.Appearing before a bench comprising Chief Justice V.N. Khare, Justice Brijesh Kumar and Justice Arun Kumar, Sorabjee said almost 60 per cent of the total NPAs were owed to the public sector banks estimated at Rs 53,777 crore.Keeping in mind the paramount purpose and manifest intention of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the AG suggested there was a need to provide an opportunity to the borrowers to state their case.‘‘Under Section 13(2), the secured creditors would give notice to the borrower and the notice would annex a statement furnishing details of the amounts due and payable by the borrower coupled with a demand to pay the amount specified in the notice,’’ Sorabjee suggested.Sorabjee said if the borrower disputed the liability specified in the notice, it would be open to him to make a representation to the secured creditor within 10 days from the receipt of the notice and the latter would decide the representation within 60 days. He suggested that the secured creditor should give intimation of the steps taken by it to the borrower and if the borrower was aggrieved by any such action, it would have a “right to approach the debt recovery tribunal (DRT) under Section 17 of the Act.”The court was hearing a bunch of petitions challenging the constitutional validity of the Act empowering financial institutions (FIs) to securitise assets of defaulting companies and making it easier for the lending companies to recover their dues without going through the slow judicial process.
