Tuesday, August 7, 2012

SARFAESI and CERSAI-Noted difference


Law bloggers or lawyers who will be reading Sense of Law or iFinancier will be familiar with the two terms Sarfaesi and Cersai. Both are acronyms. For general public, I am expanding the terms once more:
SARFAESI-Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act.
CERSAI-Central Registry of Securitisation Asset Reconstruction and Security Interest of India.
Sarfaesi is a law enacted by the Indian Parliament to enable banks and other financial institutions to speedily recover the dues without the intervention of the Courts. Cersai is a company formed as per the stipulation contained in Section 20 of the Sarfaesi Act and registered under Section 25 of the Companies Act to register Equitable Mortgages created with the banks and financial institutions.
Sarfaesi Act stipulates many things for the law to be applied. There are certain exemptions from the applicability of the Act also. These are contained in Section 31 of the Act. Some important things can be noted here. Sarfaesi Act will not apply to pledge of movable property. It will not apply to any security interest for securing repayment of any financial asset not exceeding the value of one lakh rupees. The Act cannot be applied to any case of mortgage of agricultural land.
Now the system of CERSAI which is formed as per the mandate contained in Section 20 of the Act does not conform with the above stipulations in the case of registration of mortgages. However the CERSAI webportal will not accept agricultural property and movable property. But it will accept any amount. The stipulation contained in Sarfaesi regarding minimum limit of One lakh rupees is not applicable to CERSAI. It may be noted that in the earlier version of CERSAI website which was termed as Phase One never had a distinction regarding the nature of property. There is a still a confusion and argument regarding CERSAI being the process of registering such transactions only for which any action can be proceeded under SARFAESI Act. For a clarification we may refer Section 20 of the SARFAESI Act:"The Central Government may, by notification, set up or cause to be set up from such date as it may specify in such notification, a registry to be known as Central Registry with its own seal for the purposes of registration of transaction of securitisation and reconstruction of financial assets and creation of security interest under this Act." We will not get much more meaning from the ending words "under this Act". The only thing clear from the above section are the words "for the purpose of registration of transaction of securitisation and reconstruction of financial assets and creation of security interest".
In nutshell CERSAI is not in strict conformity with SARFAESI with regard to registering of transactions. But CERSAI indeed helps financial institutions in finding out existing mortgages over a specific property. SARFAESI will be complete with the proper application of CERSAI. SARFAESI recovery will have less hindrance with the system of CERSAI as banks and other financial institutions who becomes mortgagee may find out any existing encumbrance over the property by using the system of CERSAI.

Thursday, August 2, 2012

Professional Etiquette-Presentable Dress Code

The Bar Council of India as per Section 49 of the Advocates Act has formulated rules relating to standards of Professional Conduct and Etiquette in Bar Council of India rules which are to be followed as ethical mandates by each advocate.
In Chapter Two of Bar Council of India rules, Section I deals with duty of Advocates towards the Court. Rule 6 specifically states that an advocate shall appear in court at all times only in the prescribed dress, and his appearance shall always be presentable.
The wear of gown is optional in hot seasons. I have observed many advocates complaining of the black and thick outfit which attracts heat. It is difficult to wear unless the court rooms are air-conditioned. However, if one plans to wear it,whatever be the season, a decent manner has to be adopted in the dressing. I have found many advocates wearing gown only on one shoulder. The other side will be falling down on to their arm. Some may only wear it on their arms and will never cover the shoulders with it. This is awkward and mostly ugly. I may say that this is the violation of Rule6 stated above. I find that there is a limit on the part of presiding officers to control the mannerisms of an advocate in Court. It is the advocates who have to conform to the standard prescribed in Rule 6. The budding lawyers tend to imitate, either consciously or sub-consciously the style of dressing, walking, talking etc of their seniors. So the seniors have a great role to play in this thing.
I remember when a presiding officer/judge asked an advocate who was about to make submissions, to correctly place his collar tie/band. He also advised/ordered him to be presentable in the court. In the busy schedule, an advocate may not care about all these 'refined' things or I wonder that some may actually dislike this post itself. But still I find that Rule 6 has something to add to the profession. It is just a post. You can have your say vide comments. Thank you.

Share Your View-Guest Posts

We have been here for quite some time. We are happy with providing short and simple notes on various legal matters. Now after receiving many requests from people for permitting them to write on this blog, we have thought of starting Guest Post section. Since many sites are already providing such facilities to readers, it will be very unfair on our part if we don't let great writers among you to express your views and analysis of various legal matters through an established medium.
Hence please share your thoughts and interest in becoming a Guest Writer. If we receive a good number of positive responses favouring it, we will publish an open invitation for Guest Writers.
Let me know your thoughts and views about starting such a new section in Sense of Law. Any one can mail me at vijirenjith@gmail.com and put subject of the mail as 'GW'.
Thank You for all the support. Best wishes.

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