Practice Area

Banking & Finance Law

Overview

Lending transactions and financial arrangements create legal obligations that extend well beyond the loan agreement itself — they engage security documentation, regulatory filings, covenant compliance, and enforcement rights that determine the lender’s practical ability to recover when a borrower defaults. At Corpus Lawyers, we advise banks, financial institutions, NBFCs, and borrowers on the full range of banking and finance law matters, from transaction documentation through regulatory advisory to enforcement and recovery.

Loan Documentation and Secured Lending

Drafting and review of loan agreements, facility letters, mortgage deeds, hypothecation agreements, pledge documentation, and personal guarantee documentation for secured lending transactions — with a focus on creating enforceable security interests that meet SARFAESI requirements.

SARFAESI Enforcement and Defence

Advisory to secured creditors on enforcement of security interests under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, including section 13(2) notices, symbolic possession, physical possession, and sale of secured assets. Defence of SARFAESI actions on behalf of borrowers before the Debt Recovery Tribunal.

DRT Proceedings

Representation before the Debt Recovery Tribunal in original applications filed by banks and financial institutions for recovery of debts, defence of recovery applications on behalf of borrowers and guarantors, and proceedings before the Debt Recovery Appellate Tribunal.

RBI Regulatory Compliance

Advisory to banks and NBFCs on RBI regulatory compliance obligations, including prudential norms, capital adequacy requirements, KYC and AML frameworks, fair practices codes, and management of RBI inspection findings and enforcement actions.

Financial Restructuring and NPA Resolution

Advisory on resolution of non-performing assets, including IBC proceedings, out-of-court restructuring, one-time settlement negotiations, and advisory on RBI’s prudential framework for resolution of stressed assets.

Project Finance

Advisory on project finance transactions including advisory on financing documentation, security package structuring, intercreditor arrangements between multiple lenders, and legal due diligence on project assets.

Landmark Authorities and Doctrinal Framework

Banking and finance disputes in India are governed by the Recovery of Debts and Bankruptcy Act, 1993, the SARFAESI Act, 2002, the Insolvency and Bankruptcy Code, 2016, and the RBI regulatory framework built on the Banking Regulation Act, 1949 and the RBI Act, 1934. Four rulings and two statutory reforms define the enforcement architecture.

Pioneer Urban Land and Infrastructure Ltd. v. Union of India (2019) 8 SCC 416 settled the homebuyer-as-financial-creditor question under the IBC and confirmed that the IBC and other regulatory regimes operate harmoniously, with the IBC prevailing in conflict. For secured lenders to stressed real estate developers, the ruling means that the homebuyer constituency is part of the financial-creditor body in the committee of creditors — reshaping resolution-plan voting arithmetic.

The SARFAESI Act, 2002 provides the non-judicial enforcement pathway for secured lenders — Section 13(2) notice, Section 13(4) measures, the Debts Recovery Tribunal’s jurisdiction under Section 17 to hear borrower objections, and appeals to the Debts Recovery Appellate Tribunal under Section 18. The statute operates parallel to IBC and to civil-court recovery suits; lender strategy requires an upfront forum election that preserves optionality.

The Insolvency and Bankruptcy Code, 2016 introduced a collective, time-bound corporate insolvency resolution process. Section 7 allows a financial creditor to file for admission on establishing default; Section 9 allows an operational creditor on the same basis. Section 14 moratorium suspends all proceedings against the corporate debtor once CIRP is admitted; Section 30(2) feasibility and viability test governs resolution-plan evaluation; Section 53 waterfall governs liquidation distribution.

Current Doctrinal Shifts and Live Questions

Section 95 personal-guarantor insolvency. The Section 95 personal-insolvency framework for personal guarantors of corporate debtors was notified on 15 November 2019 and upheld in Lalit Kumar Jain v. Union of India (2021) SCC OnLine SC 396. Personal-guarantee enforcement now runs parallel to corporate CIRP. Promoter-guarantee structures require advance thinking at the time of corporate borrowing, not merely at the time of default.

Pre-pack insolvency for MSMEs. The pre-pack framework for micro, small, and medium enterprises was notified in April 2021 as Chapter III-A of the IBC. The framework allows a debtor-initiated, creditor-approved resolution process within a shorter timeline than conventional CIRP. Take-up has been modest, and the framework’s boundaries — eligibility, creditor consent thresholds, and interaction with conventional CIRP — continue to be worked through.

Avoidance-transaction jurisprudence under IBC Sections 43, 45, 49, and 66. The preferential, undervalued, extortionate, and fraudulent-trading provisions of the IBC have generated substantial NCLAT and Supreme Court jurisprudence since 2019. Resolution professionals and lenders increasingly scrutinise pre-CIRP transactions during the lookback period to expand the available recovery pool. Promoter-controlled pre-CIRP transactions face particular scrutiny.

SARFAESI versus IBC forum choice. A secured lender frequently faces a forum choice between SARFAESI enforcement (non-judicial, fast, asset-specific) and IBC admission (collective, time-bound, potentially dilutive where other creditors exist). The choice is partly strategic (speed, asset type, co-lender coordination) and partly defensive (risk of borrower-triggered CIRP that freezes SARFAESI action under the moratorium). The analysis must be run at the default-identification stage, not after enforcement steps have begun.

Project Finance and RBI Regulatory Overlay

Project finance transactions layer multiple regulatory regimes on the basic secured-lending architecture. RBI prudential norms on exposure, restructuring, and capital adequacy constrain lender behaviour. The June 2019 Prudential Framework for Resolution of Stressed Assets replaced the February 2018 framework (struck down in Dharani Sugars v. Union of India (2019) 5 SCC 480) and established the current regulatory architecture for out-of-court resolution attempts before IBC reference. The framework’s standstill and reporting disciplines affect documentation and lender monitoring.

Security creation and perfection discipline — MODT registration, ROC Form CHG-1 filing within 30 days, and CERSAI filing for SARFAESI-eligible security interests — determines priority and enforceability. Gaps in perfection are increasingly exposed at the enforcement or CIRP stage when a resolution professional or another secured creditor challenges the security position.