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Siva (Consultant)     19 August 2010

Need advise on Symbolic Possession / Sec.13(4) on Mort. Prop


I understand that the Bankers should initiate the symbolic possession first by giving a period of 45 days and later, they will take physical possession u/s 13(4) if the borrower does not take any action on these 45 days time.

Is that been possible for a banker or lender to take any action u/s 13(4) without serving a symbolic possession notice? The bank has sent only a letter mentioning that they would enact sec.13 (4) if the amount is not paid on the said time but never sent any symbolic or physical possession notices. So, the letter itself to be treated as Notice or is there any specific format / procedure to issue notices. If so, what would be the format/procedure for a symbolic possession notice? Will the banker must affix the symbolic possession notice on the mortgaged property and publish in the dailies? Or, will they send only a letter to the borrower?

And, Pls let me know are the bankers are liable to get the interest amount from the borrower once the account is declared as NPA or the account to be freeze from that time the account was declared as NPA?

Also, if the borrowers approaching the DRT after symbolic possession, are the borrowers liable to pay their interest amount along with the current outstanding to banker? Or, will the borrower have to pay only the outstanding amount (principal cum interest amount) calculated before filing u/s 13(4)? And, where the borrowers have to pay the outstanding amt, whether in the bank or in the court, directly? Also, how long will be duration that the borrower gets from DRT or Court to pay the outstanding amount? Pls advise..!



 33 Replies

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     19 August 2010

1) Notice has to be for sixty days.

2) Interest will not stop till final payment is  done.

3) The lender will also charge all the costs to the borrowers account.

4) Unless you can prick holes in the lenders story no hope at High court or even SC.

If can make out case for counterclaim based on lapses of the lender than only you have some hope.

1 Like

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     19 August 2010

DRT is just fomality , unless you have a case with evidence DRT does not act.

Siva (Consultant)     19 August 2010



Thanks all for your replies.


Suppose, if the borrower agreed to pay-back the entire loan amount within a period of 3 months by explaining the genuine reasons for non-payment and where the bank does not agreed to grant any more time to the borrower or refused to accept his request/representation by replying to the borrower that they had given enough more time, so now, at this juncture, can the borrower approach the DRT to grant him the said time for the closure of the loan account or at least, to regularize the loan acct.?

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     19 August 2010

Yes , but your promise should be on reasonable grounds so that other side can believe it.

If the reasons for repayment are genuine than what three months you can get even three years.

Since the interest will not stop and  lender is interested in security and safely of money.

Uday (Lawyer)     23 August 2010

Dear Siva,

1) Symbolic possession is nothing but affixture of the notice on the mortgaged property stating that the property has been possessed.

2) Within 7 days of the possession, paper publication shall be made in 2 dailies out of which 1 should be in vernacular langauage and the possession intimation should be served on the borrower.

3) As per the act, there is no necessity to serve a notice of symbolic possession to the borrower before symbolic possession.

4) But certain High Courts have have stipulated that before taking the physical possession, the property should have been possessed symbolically. The recent one is the Judgement given by the Madras High Court.

5) For taking symbolic possession, the only necessary thing is that the borrower should have been served with the 13(2) notice and 60 days time should have been lapsed from then.

6) Yes, the borrower has to pay the interest, even if the amount is frozen in 13(2) Notice, but not the agreed rate of interest in your loan agreement. (I'm not sure about the rate of interest what you have to pay. I think it is 12% per annum)

7) Even if the borrower approaches the DRT, he is liable to pay the interest to the banker. The DRT will direct the borrower to pay the amount in the bank. There is no provision for granting time for making payment, since, the loan account has been recalled and you were given a period of 60 days to make the full payment. Granting time for payment is only a discretion of the DRT.

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     23 August 2010

Yes Mr Uday this is good boy advice , that is for those who are otherwise all-right.

But since SARFAESI is on the head of the borrower , things are not allight.

Poseession and sale by lender will diminish the prices to vertually rock bottom.

So at such occassions start counter offensive by setting up legal and equittable set off and counter claim  and keep them busy in these procedings so that by the time you can sort out your problems.

Siva (Consultant)     24 August 2010

Thanks Mr. Uday & Mr. Shashi,


Can you please let me know the validity of the SARFAESI notice?


In other words, a SARFAESI notice has been sent to a borrower some 6 months back and then where the borrower and the lender (Bank Manager) had a mutual consent and the borrower started paying his dues since from the past 3 months even after the issuance of the 13(2) notice but still some of the dues were pending (almost 3 months due). However, the account becomes mobilized and the borrower started paying his dues without fail.


But again, the lender (BM) threatened the borrower that he may enact the 13(4) and take physical possession of the mortgaged property if the 3 months due would not be paid immediately. But the borrower asked some more time to pay-back all his overdue, where the BM didn’t agree with the borrower and ended with some dispute.


So, in this case, whether the lender (BM) has to send a fresh copy of the SARFAESI Notice or the same sent earlier (6 months back) will be valid by this time? So, what is the VALIDITY of any Notice sent? Is there any timeframe for it? Pls advise!

Uday (Lawyer)     28 August 2010

Dear Mr.Siva,

The validity of SARFAESI Notice is for 12 Years. Untill you bring the outstanding dues to less than 3 months there will be a threat to you always from the bankers.

1 Like

Siva (Consultant)     29 August 2010

Dear Mr. Uday,

The validity of SARFAESI Notice is for 12 Years or 12 Months...?!  Pls clarify.

Uday (Lawyer)     30 August 2010

The validity of the SARFAESI Notice is 12 years and not 12 months.

For your kind information I've reproduced the relevant portion of the Judgment passed by the Madras High Court 


A.Venkatramani vs Lic Housing Finance Limited on 28 September, 2006


DATED: 28.9.2006



WRIT PETITIONS No.34022, 35859 & 40817/2005,

AND 12407 TO 12410, 12841 AND 16513 TO 16515/2006


W.P.M.P.Nos.36939, 38676, 41939, 43792/2005 &

14004 TO 14007, 14433 AND 15988 TO 15990/2006


W.V.M.P.Nos.111, 384, 1405 TO 1409 AND 1442 TO 1443/2006

W.P.No.34022 OF 2005:

A.Venkatramani ... Petitioner


LIC Housing Finance Limited,

rep.by its Authorised Officer,

Harrington Chambers,

Block No.-C, No.30/1A,

Abdul Razak 1st Street,

Saidapet, Chennai-600015. ... Respondent

* * *

 All the Writ Petitions have been filed under Article 226 of the Constitution of
India. In W.P.No.34022 of 2005, the petitioner prays to issue a Writ of
Certiorari to call for the records of the respondent relating to the impugned
notice dated 31.8.2005 issued by the respondent to the petitioner and others,
and quash the same.

* * *

  For petitioner in

  WP.34022/2005 : Mr.K.Ravi

       for M/s.Rugan & Arya

  For respondent in

  WP.34022/2005 : Mr.E.Omprakash for

       M/s.Ramalingam & Associates

  For petitioner in Mr.AR.L.Sundaresan, S.C.

  WP.35859/2005 : Mr.Pitty Parthasarathy

  For petitioner in

  W.P.No.40817/2005 : Mr.AR.L.Sundaresan, S.C. for


  For petitioners in

  WP.Nos.12407 to

  12410 & 12841/2006 : M/s.A.S.Kailasam Associates

  For petitioners in

  Wps.16513 to

  16515/2006 : Mr.Vijayanarayanan, S.C. For

       M/s.Vijayalakshmi Rajagopal

  For respondents in

  WPs.35859, 40817/2005,

  12407 to 12410,

  12841 & 16513 to

  16515/2006 & for

  petitioner in

  WPMP.14433/2006 : Mr.Krishna Srinivasan for

      M/s.S.Ramasubramaniam &


  For Respondents

  2 & 3 in WP.40817/05

  and for respondents

  3 & 4 in WP.35859/05: No appearance

* * *


 With the consent of either counsel, the main writ petitions themselves have
been taken up for final disposal.

 39. Section 36 of the SARFAESI Act prescribes the period of limitation to
proceed under Section 13(4) of the SARFAESI Act, which says No secured creditor
shall be entitled to take all or any of the measures under sub-section (4) of
section 13, unless his claim in respect of the financial asset is made within
the period of limitation prescribed under the Limitation Act, 1963 (36 of
1963). The period prescribed for enforcing the secured debt or mortgage is 12
years from the date when the money becomes due, as contemplated under Section 62
of the Limitation Act, 1963. If there was any subsequent acknowledgment, that
also should be taken into consideration, in calculating the period of 12 years,
as contemplated in Section 36 of the SARFAESI Act.


Abhijit C Thakur (Advocate)     11 September 2010

After issuance of the demand notice u/s 13(2) of The Act of 2002, the recovery proceeding does not stop unless the outstanding is liquidated in full. That it has been held by the Hon'ble High Court of Madhya Pradesh Principal Seat at Jabalpur in the matter of Anu Stone Crusher v. Bank of India (AIR 2008 MP244). That the bank can proceed to take action u/s 13(4) of The Act for taking possession of the property any time after 60 days of service of demand notice  unless the account is reclassified as standard by the banker. That the Hon'ble Apex Court in the matter of Transcore v. Union of India (2007 AIR SCW 389) held that the bank is at liberty to take symbolic or physical possession after service of demand notice u/s 13(2) of the Act.

That it is reiterated that the bank is not required to issue fresh demand notice unless the account is reclassified as standard asset  by the banker.


Abhijit C Thakur, Advocate

Private Practice

Manukant Sharma (Consultant)     05 November 2011

What is the Legal Status of Symbolic Possession and post case reference of Madras HC by which it is mendatory

Uday (Lawyer)     05 November 2011

Dear Mr.Sharma,

In Tamil Nadu, all the financial institutions who are aware of this judgement had made symbolic possession mandatory. But it does not mean other states should follow it unless there is a judgement supporting this by the High Court of that particular state. However, Standard Chartered Bank who is the respondent in the case referred by you has filed a SLP and it is admitted. We hope to get clarification from the Apex court at the earliest.

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     05 November 2011

There is nothing like symolic possession in the law. The lender can proceed to take legal possession which can always be legally resisted. But it is a lengthy  and costly legal battle.

In a case we are before DRT even after the property was sold for compansation and opposite party even paid part compansation before admission of  the case. But we want more so it will ultimately go to the  DART than HC and even SC.

Since the act gives draconian powers to the lender only legthy legal battle can give some relief.

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