Thursday, February 5, 2015

ENFORCEMENT OF SECURITY INTEREST UNDER SARFAESI, ACT 2002
(Section 13 to 19 of the Act)

I.  Demand Notice under section 13(2) of SARFAESI ACT

(i)                 Requirement for initiation of Demand Notice
(a)    Account should have been classified as NPA
(b)    Documents should not be time barred (Section 36)
(c)    Above 1 lac ceiling (Section 31)
(d)   Total outstanding should be above 20% of total sanction (Section 31)
(e)    Secured Asset should not be agriculture land (Section 31)

(ii)               Important Contents of 13(2) Notice
A)    Advance details
B)    NPA date
C)    As on date dues payable
D)    Details of  Secured asset intended to be enforced

(iii)             Service of Demand Notice
Transmitting or delivering the 13(2) Demand Notice
to borrower including  Guarantors
at  (i) his Residence or
    (ii) place of business or
(iii)             place works for gain
Through
(i)                 Registered Post
(ii)               Speed Post  conspicuous
(iii)              Courier
(iv)              Email
(v)               Fax

(iv)             List of  Records to be preserved
1.       Copy of the 13(2) notice sent to all the borrowers including guarantors
2.      Postal receipts
3.      Acknowledgement card or returned cover or print out of status of delivery

 Substituted Service

4.      Affixture Photo of 13(2) at outer door or any conspicuous part of the building where borrower resides or his work place
5.      Paper publication (Both Tamil and English)
                                                  

  
II.   Reply to Representation or objection raised in response to the 13(2) notice
       (Reply should be with in fifteen days from receipt of the notice)     



III. Possession under section 13(4) of SARFAESI:

(1)  Requirement for initiation of possession notice
            (a)  Notice under Section 13(2) should have completed AND found to be in order.
            (b)  Sixty days should have completed from the date of notice
           
(2) Procedure of taking possession (Rule 8 (1) & (2) of Security Enforcement Rules, 2002)
      1. Delivering the possession notice to the borrower
      2. Affixing the Possession notice on the outer door or any other conspicuous place of the secured asset
      3.  Publishing the possession notice in two dailies having sufficient circulation  
           (English & Vernacular) within seven days after taking possession.

(3) List of Records to be preserved
1.      13(4) Affixture Photograph with authorized officer
2.      Postal receipts
3.      Acknowledgement card or personal acknowledgement on the copy of the possession notice or postal delivery status print out
4.      Copy of the paper publications (Vernacular and English)

(4) Remedies available to the borrowers (Section 17)
      Borrower or Guarantor or any other person (Tenant or person who is disputing title ) may approach the DRT against the possession notice by filing SA under Section 17 of SARFAESI Act within 45 days from the date of possession.

IIIa.  Physical Possession (Section 14)
(i)                 Filing an application before Chief Materopolitan Magistrate or District Magistrate to assist Authorised Officer to take physical possession of the property.

(2)   Application should be filed before CMM if the property situated within CMM jurisdiction otherwise to be filed before District Magistrate ie The Collector of concern District.




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