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jasud Babasaheb (owner)     31 January 2018

Civil property possession under section 13(2)

hi, we have business loan from co operative bank in maharashtra & My account is now NPA from last 6 month, Now bank has send me Notice section13(2) & after two month bank send us formal letter saying that they will come within 15days and take the possession of the property I just wanna confirm that will it be legal, without an order of collector they will take the possessions- required expert reply


 6 Replies

R.Ramachandran (Advocate)     31 January 2018

Please be rest assured that the Co-operative Bank will take necessary orders from the Collector before taking possession.

jasud Babasaheb (owner)     31 January 2018

will they take possession without the order?

jasud Babasaheb (owner)     31 January 2018

wht is normal process, will they shortcut the process? will appreciate your reply pls...

R.Ramachandran (Advocate)     31 January 2018

You did not understand as what I said.

According to Sarfaesi Act provides as under: 

13. Enforcement of security interest (1) Notwithstanding anything contained in section 69 or section 69A of the Transfer of Property Act, 1882 (4 of 1882), any security interest created in favour of any secured creditor may be enforced, without the intervention of court or tribunal, by such creditor in accordance with the provisions of this Act.

(2) Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under subsection (4).


(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;


Thus, once there is failure on the part of the borrower to comply with the Notice under Sec. 13(2), then the Bank can take possession in terms of Section 13(4)(a) without any requirement for order /direction etc., from any Court/Collector etc.

However, the Bank if so feels and requires the Assistance of CMM or DM,  it can approach CMM/DM in terms of Section 14.

14. Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured asset:

(1) Where the possession of any secured assets is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred by the secured creditor under the provisions of this Act, the secured creditor may, for the purpose of taking possession or control of any such secured asset, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such secured asset or other documents relating thereto may be situated or found, to take possession thereof, and the Chief Metropolitan Magistrate or, as the case may be, the District Magistrate shall, on such request being made to him--

(a) take possession of such asset and documents relating thereto; and

(b) forward such assets and documents to the secured creditor.

Therefore, normally the Bank can take possession upon failure on the part of the borrower to comply with Sec. 13(2) Notice, yet as a precautionary method, it will definitely apply and obtain orders from CMM/DM before actually coming to take over the possession.  



1 Like

jasud Babasaheb (owner)     31 January 2018

thank you very much

R.Ramachandran (Advocate)     31 January 2018

If you have got any defence etc., then you can approach Debt Recovery Tribunal and ask for stay of the proceedings.  For this, you have to get in touch with a lawyer practising in the DRT.

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