Notices for payment of overdues sent under section 13 (2) will give the lenders time to gather their sails for firing the next salvo against persistent defaulters — that of seizure of assets or taking over the management, etc., under sub-section (4). That, however, has to wait till the co-lenders give the consent for such action to the lead institution in a consortium. The consent of 75 per cent of lenders is mandatory under sub-section (9).
Industry sources said IFCI had already sent out nearly 10 notices to defaulters. It is understood that apart from the notices to corporate borrowers, IDBI has identified another 20 or so cases where it has sought the approval of co-lenders. The notices to defaulters are under section 13 (2) giving them 60 days to pay up their dues. Some of the notices have been sent in cases where the respective FIs were the lead lenders.
FI sources felt that even if the majority of those who get these notices respond favourably, it would be a good enough start. Indeed, it may not in all cases be possible to invoke section 13 (4) either, the sources pointed out, because that can be done only in conjunction with sub-section (9).
However, the institutions seem confident of securing approvals from their fellow creditors within the month.
Section 13 (2) says, “the secured creditor may require the borrower by notice in writing to discharge in full his liabilities ... within sixty days of the notice failing which the creditor shall be entitled to exercise any or all of the rights under sub-section (4)”.
That sub-section offers recourse to “possession of secured assets, including the right to transfer by way of lease, assignment or sale for realising the secured asset”, “take over the management...including the right to transfer...”, “appoint any person...to manage the secured assets” after taking possession” or “require...any person who has acquired any of the secured assets from the borrower... so much money as is sufficient to pay the secured debt”.