law: Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
  15. Manner and effect
  
  of takeover of management.- 
  1.     
  
    When
  
  the management of business of a borrower is taken over by a secured creditor,
  
  the secured creditor may, by publishing a notice in a newspaper published in
  
  English language and in a newspaper published in an Indian language in
  
  circulation in the place where the principal office of the borrower is
  
  situated, appoint as many persons as it thinks fit-
  a.      in a case in which
  
  the borrower is a company as defined in the Companies Act, 1956 (1 of 1956), to
  
  be the directors of that borrower in accordance with the provisions of that
  
  Act; or
  b.     in any other case, to
  
  be the administrator of the business of the borrower.
  1.     
  
  
  2.     
  
    On
  
  publication of a notice under sub-section (1),-
  a.      in any case where the
  
  borrower is a company as defined in the Companies Act, 1956 (1 of 1956), all
  
  persons holding office as directors of the company and in any other case, all
  
  persons holding any office having power of superintendence, direction and
  
  control of the business of the borrower immediately before the publication of
  
  the notice under sub-section (1), shall be deemed to have vacated their offices
  
  as such;
  b.     any contract of
  
  management between the borrower and any director or manager thereof holding
  
  office as such immediately before publication of the notice under sub-section
  
  (1), shall be deemed to be terminated;
  c.      the directors or the
  
  administrators appointed under this section shall take such steps as may be
  
  necessary to take into their custody or under their control all the property,
  
  effects and actionable claims to which the business of the borrower is, or
  
  appears to be, entitled and all the property and effects of the business of the
  
  borrower shall be deemed to be in the custody of the directors or
  
  administrators, as the case may be, as from the date of the publication of the
  
  notice;
  d.     the directors
  
  appointed under this section shall, for all purposes, be the directors of the
  
  company of the borrower and such directors or as the case may be, the
  
  administrators appointed under this section, shall alone be entitled to
  
  exercise all the powers of the directors or as the case may be, of the persons
  
  exercising powers of superintendence, direction and control, of the business of
  
  the borrower whether such powers are derived from the memorandum or articles of
  
  association of the company of the borrower or from any other source whatsoever.
  1.     
  
  
  2.     
  
  
  3.     
  
    Where
  
  the management of the business of a borrower, being a company as defined in the
  
  Companies Act, 1956 (1 of 1956), is taken over by the secured creditor, then,
  
  notwithstanding anything contained in the said Act or in the memorandum or
  
  articles of association of such borrower,-
  a.      it shall not be
  
  lawful for the shareholders of such company or any other person to nominate or
  
  appoint any person to be a director of the company;
  b.     no resolution passed
  
  at any meeting of the shareholders of such company shall be given effect to
  
  unless approved by the secured creditor;
  c.      no proceeding for the
  
  winding up of such company or for the appointment of a receiver in respect
  
  thereof shall lie in any court, except with the consent of the secured
  
  creditor.
  4.     
  
    Where
  
  the management of the business of a borrower had been taken over by the secured
  
  creditor, the secured creditor shall, on realisation of his debt in full,
  
  restore the management of the business of the borrower to him.