Lawgist29Rights of Financial Corporation in case of default
(1) Where any industrial concern, which is under a liability to the Financial Corporation under an agreement, makes any default in repayment of any loan or advance or any instalment thereof 1[or in meeting its obligations in relation to any guarantee given by the Corporation] or otherwise fails to comply with the terms of its agreement with the Financial Corporation, the Financial Corporation shall have the 2[right to take over the management or possession or both of the industrial concerns], as well as the 3[right to transfer by way of lease or sale] and realise the property pledged, mortgaged, hypothecated or assigned to the Financial Corporation.
(2) Any transfer of property made by the Financial Corporation, in exercise of its powers 4*** under sub-section (1), shall vest in the transferee all rights in or to the property transferred 5[as if the transfer] had been made by the owner of the property.
(3) The Financial Corporation shall have the same rights and powers with respect to goods manufactured or produced wholly or partly from goods forming part of the security held by it as it had with respect to the original goods.
6[(4) 7[Where any action has been taken against an industrial concern] under the provisions of sub-section (1), all costs, 8[charges and expenses which in the opinion of the Financial Corporation have been properly incurred] by it 9[as incidental thereto] shall be recoverable from the industrial concern and the money which is received by it 10*** shall, in the absence of any contract to the contrary, be held by it in trust to be applied firstly, in payment of such costs, charges and expenses and, secondly, in discharge of the debt due to the Financial Corporation, and the residue of the money so received shall be paid to the person entitled thereto.]
(5) 7[Where the Financial Corporation has taken any action against an industrial concern] under the provisions of sub-section (1), the Financial Corporation shall be deemed to be the owner of such concern, for the purposes of suits by or against the concern, and shall sue and be sued in the name of 11[the concern].
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1 Ins. by Act 77 of 1972, s. 19 (w.e.f. 30-12-1972).
2 Subs. by s. 19, ibid., for "right to take over the management of the industrial concern" (w.e.f. 30-12-1972).
3 Subs. by Act 56 of 1956, s. 14, for "right to sell" (w.e.f. 1-10-1956).
4. The words "of sale and relaisation" omitted by s. 14, ibid. (w.e.f. 1-10-1956).
5 Subs. by s.14, ibid., for "as if the sale"(w.e.f. 1-10-1956).
6 Subs. by s. 14, ibid., for sub-section (4) (w.e.f. 1-10-1956).
7 Subs. by Act 77 of 1972, s. 19, for certain words (w.e.f. 30-12-1956).
8 Subs. by Act 6 of 1962, s. 14, for "charges and expenses properly incurred" (w.e.f. 16-4-1962).
9 Subs. by Act 77 of 1972, s. 19, for "as incidental to such management, or transfer and realization." (w.e.f. 30-12-1956).
10. The words "from such management, or transfer and realization" omitted by s.19, ibid. (w.e.f. 30-12-1972).
11 Subs. by Act 6 of 1962, s. 14, for "the owner for the concern" (w.e.f. 16-4-1962).
- 24 General duty of the Board
- 25 Business which Financial Corporation may transact
- 25A Power to acquire rights
- 25B Gifts, grants, etc
- 26 Limit of accommodation
- 27 Power to impose conditions for accommodation
- 28 Prohibited business
- 29 Rights of Financial Corporation in case of default
- 30 Power to call for repayment before agreed period
- 31 Special provisions for enforcement of claims by Financial Corporation
- 32 Procedure of district judge in respect of applications under section 31
- 32A Power of Financial Corporation to appoint directors or administrators of an industrial concern when management is taken over
- 32B Effect of notified order under section 32A
- 32C Powers and duties of directors and administrators
- 32D No right to compensation for termination of contract of managing agent, managing director, etc
- 32E Application of Act 1 of 1956
- 32F Restriction on tiling of suite for dissolution, etc., of an industrial concern not being a company when its management is taken over
- 32G Recovery of amounts due to the Financial Corporation as an arrear of land revenue
