Sarfaesi act 2002

SRIBATSA SAHOO (Querist) 18 January 2025 This query is : Resolved
My query

if bank is unable to take auction the property under section 13(4)of sarfaesi act, can bank file a money suit against the same borrower and the property.

Follow Query

Report Abuse

Quick Summary

This discussion clarifies whether a bank can file a money suit against a borrower if an auction under Section 13(4) of the SARFAESI Act 2002 fails to recover the full loan amount. The consensus is that if the SARFAESI Act process is unsuccessful or insufficient, banks can indeed pursue a civil money recovery suit or summary suit to recover the outstanding debt.

T. Kalaiselvan, Advocate (Expert) 18 January 2025
If there are no possibilities to invoke sarfaesi act then the bank can very well adopt legal process by filing a civil money recovery suit or summary suit to recover the loan amount from the debtor.

kavksatyanarayana (Expert) 18 January 2025
Yes. Usually, banks adapt to recover the loans through the SARFAESI ACT. If the act does not work, in some cases, the bank will proceed to file a recovery suit in court against the debtor.

Dr. J C Vashista (Expert) 19 January 2025
Section 13(4) in The Securitisation And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002
(4) In case the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely:
(a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset;
(b) [ take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset: [Substituted by the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2004, Section 8 (30 of 2004), for Cl.(b) (w.e.f. 11.11.2004).]

Provided that the right to transfer by way of lease, assignment or sale shall be exercised only where the substantial part of the business of the borrower is held as security for the debt:

Provided further that where the management of whole of the business or part of the business is severable, the secured creditor shall take over the management of such business of the borrower which is relatable to the security for the debt.]
Prior to its substitution, Clause(b) read;
(b) take over the management of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale and realise the secured asset;
(c) appoint any person (hereafter referred to as the manager), to manage the secured assets the possession of which has been taken over by the secured creditor;
(d) require at any time by notice in writing, any person who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt.

Whether the plaintiff Bank has taken possession and put the mortgaged property for auction and outstanding amount still remained unsatisfied ? if so, the plaintiff Bank shall file a suit for recovery before appropriate / jurisdictional Court / Tribunal.
Accordingly the facts posted are incomplete and vague to form proper opinion and oblige.

P. Venu (Expert) 21 January 2025
What is the context for this query?

SRIBATSA SAHOO (Querist) 21 January 2025
Dr. J C Vashista Respected sir I want to know after using the law of sarfaesi. If the bank fail to sale the property.whether bank can file a money suit in respect of that property.

Dr. J C Vashista (Expert) 21 January 2025
Yes, the bank has right to recover the money outstanding

SRIBATSA SAHOO (Querist) 21 January 2025
What is the procedure plz clarify it...

Previous

Next

You need to be the querist or approved LAWyersclub expert to take part in this query .

Click here to login now

Similar Resolved Queries :

Ask Query
Unanswered Queries