While endorsing the decision of the Supreme Court in the Mardia Chemicals case, the Madras High Court Bench has gone a step further and held that residential property cannot be attached. The Bench handed down this judgment on a clutch of petitions.
In the Mardia Chemicals case, the Supreme Court had in an interim ruling ordered that the secured creditors could take possession of secured assets but could not lease, sell or assign them.
This severely curtailed the rights given to the banks and financial institutions under the Act.
Bankers associated with the recovery process feel the judgment defeats the purpose of the Act and is contrary to all the provisions stated therein.
