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      Question

      Section 7(3) of the SARFAESI Act relates to qualified

      buyers calling a meeting when financial assets are not realised by an ARC. What minimum holding of security receipts (by value) is required to call such a meeting?
      A Fifty per cent of the total value of security receipts Correct Answer Incorrect Answer
      B Seventy-five per cent of the total value of security receipts issued under a scheme Correct Answer Incorrect Answer
      C Sixty per cent of the total value of security receipts Correct Answer Incorrect Answer
      D Two-thirds of the total value of security receipts Correct Answer Incorrect Answer
      E Ninety per cent of the total value of security receipts Correct Answer Incorrect Answer

      Solution

      Section 7(3) provides that in the event of non-realisation of financial assets, qualified buyers of an ARC holding security receipts of not less than seventy-five per cent of the total value of security receipts issued under a scheme by such company shall be entitled to call a meeting of all the qualified buyers. Every resolution passed at such a meeting shall be binding on the ARC. The qualified buyers at such a meeting follow the same procedure as meetings of the board of directors of the ARC [Section 7(4)]. This 75% threshold is distinct from the 60% threshold for joint enforcement under Section 13(9) - a common point of confusion in examinations.

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