Jagdish bagri (Chairman) 14 June 2010

sarfaesi act

I ahd received 4 notices under sectyion 13(2) AND ALL WERE CHALLANGED. TWO NOTICES OF SEC13(4) WERE ALSO SERVED AND THE SAME CHALLANGED. CAN BANK KEEP ON ISSUING NOTICES .

WITHOUT ISSUING NOTICE UNDER SEC 13(4) CAN BANK PROCEED WITH PHYSICAL POSSESTION WOTHOUT SYMBOLIC POAASSION/

WHAT ARE THE GROUNDS OF REMEDY IF BANK IS HELL BENT ON GRABBING A PROPERTY.

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3 Replies

Devajyoti Barman (Advocate) 14 June 2010

You can chalenge the notices before the DRT by filing application u/s 17 of the Act . Facts of the case needs to be known for more specific solution.

anil (GM) 16 June 2010

dear members

i hav taken a loan from one of the nationalized bank arountd of Rs15 lacs......due some problems in my businees my account become NPA...after that bank gave me a notice in section 13(2) of Serfaesi act... within two monts time i make my objection n repersentation to the bank but bank did not reply on that..n without giving me a reply bank fixed a possession notice on my factory under section 13(4) without serving the notice to me. After checking my account i found that the pending dues is less than 20% of the principle amount.....bank is now in process of selling of my property .... what ramadies are avialabile for me in my view this act is not apply on me and ilegal .....kindly reply ..i will very thankfull to all of u

Uday (Lawyer) 21 June 2010

Dear Anil,

If a loan has become NPA, 13(2) Notices will be issued to you, irrespective of your financial position. In your case you have pointed out that,

1) You have made objections to the 13(2) Notice within 60 days and there was no response to that.

2) Your total outstanding amount is less that 20% of the principal amount you have borroweed.

3) The bank has taken symbolic possession after affixing the notice on your premises without giving you notice.

The answer for the above questions are as follows.

1) Any objection made to the notice under section 13(2) of the SARFAESI Act has to be replied within 7 days of the receipt of the objection.

2) If the outstanding amount is less that 20% of the principal amount you have borrowed, the banks cannot proceed to recover the money under SARFAESI Act.

3) The bank can take symbolic possession of the property after the lapse of 60 days of 13(2) Notice, and you need not be served any notice prior to taking possession.

Anyhow you have a good case on the 1st and 2nd grounds. You can very well approach the DRT and get a stay to further proceedings under section 17 of the SARFAESI Act.