(7) Without prejudice to the provisions contained in the Companies Act, 1956, the Securities Contracts (Regulation) Act, 1956 and the Securities and Exchange Board of India Act, 1992, any securitisation company or reconstruction company, may, after acquisition of any financial asst^ under sub-section (7) of section 5, offer security receipts to qualified institutional buyers (other than by offer to public) for subscription in accordance with the provisions of those Acts.
(2) A securitisation company or reconstruction company may raise funds from the qualified institutional buyers by formulating schemes for acquiring financial assets and shall keep and maintain separate and distinct accounts in respect of each such scheme for every financial asset acquired out of investments made by a qualified institutional buyer and ensure that realisations of such financial asset is held and applied towards redemption of investments and payment of returns assured on such investments under the relevant scheme.
(3) In the event of non-realisation under sub-section (2) of financial assets, the qualified institutional buyers of a securitisation company or reconstruction company, holding security receipts of not less than seventy-five per cent, of the total value of the security receipts issued by such company, shall be entitled to call a meeting of all the qualified institutional buyers and every resolution passed in such meeting shall be binding on the company.
(4) The qualified institutional buyers shall, at a meeting called under sub-section (3), follow the same procedure, as nearly as possible as is followed at meetings of the board of directors of the securitisation company or reconstruction company, as the case may be.
1 of 1956.
42 of 1956.
15 of 1992.
Exemption from registration of security receipt.
8. Notwithstanding anything contained in sub-section (/) ot section 17 ot me Registration Act, 1908 —
(a) any security receipt issued by the securitisation company or reconstruction company, as the case may be, under sub-section (7) of section 7, and not creating, declaring, assigning, limiting or extinguishing any right, title or interest, to or in immovable property except in so far as it entitles the holder of the security receipt to an undivided interest afforded by a registered instrument; or
(6) any transfer of security receipts, shall not require compulsory registration.
16 of 1908.
Measures for assets reconstruction.
9. Without prejudice to the provisions contained in any other law tor the time Deing in forte, a securitisation company or reconstruction company may, for the purposes of asset reconstruction, having regard to the guidelines framed by the Reserve Bank in this behalf, provide for any one or more of the following measures, namely:— SEC. 1] THE GAZETTE OF INDIA EXTRAORDINARY 9
(a) the proper management of the business of the borrower, by change in, or take over of, the management of the business of the borrower;
(b) the sale or lease of a part or whole of the business of the borrower;
(c) rescheduling of payment of debts payable by the borrower;
(d) enforcement of security interest in accordance with the provisions of this Ordinance;
(e) settlement of dues payable by the borrower;
(j) taking possession of secured assets in accordance with the provisions of this Ordinance.
10. (/) Any sccuritisation company or reconstruction company registered under section 3 may—
(a) act as an agent for any bank or financial institution for the purpose of recovering their dues from the borrower on payment of such fees or charges as may be mutually agreed upon between the parties;
(b) act as a manager referred to in clause (c) of sub-section (4) of section 13 on such fee as may be mutually agreed upon between the parties;
(c) act as receiver if appointed by any court or tribunal:
Provided that no securitisation company or reconstruction company shall act as a manager if acting as such gives rise to any pecuniary liability.
(2) Save as otherwise provided in sub-section (1), no securitisation company or reconstruction company which has been granted a certificate of registration under sub-section (4) of section'3, shall commence or carry on, without prior approval of the Reserve Bank, any business other than that of securilisation or asset reconstruction:
Provided that a securitisation company or reconstruction company which is carrying on, on or before the commencement of this Ordinance, any business other than the business of securitisation or asset reconstruction or business referred to in sub-section (1), shall cease to carry on any such business within one year from the date of commencement of this Ordinance.
Explanation.—For the purposes of this section, "securitisation company" or "reconstruction company" does not include its subsidiary.
Other functions of securitisation company or reconstruction company.
26 of 19%.
11. Where any dispute relating to securitisation or reconstruction or non-payment of any amount due including interest arises amongst any of the parties, namely, the bank, or financial institution, a securitisation company or reconstruction company or qualified institutional buyers, such dispute shall be settled by conciliation or arbitration as provided in the Arbitration and Conciliation Act, 1996, as if the parties to the dispute have consented in writing for determination of such dispute by conciliation or arbitration and the provisions of that Act shall apply accordingly.
Resolution of disputes.