Under SARFAESI Act whether the declaration of NPA should be intimated to the loan borrower ? whether the non-issuance of notice in this regard will amount to any irregularity ? plz suggest some citation in this regard
velmurugan (Madras High Court) 06 August 2011
Under SARFAESI Act whether the declaration of NPA should be intimated to the loan borrower ? whether the non-issuance of notice in this regard will amount to any irregularity ? plz suggest some citation in this regard
M V Gupta (Advocate) 08 August 2011
The Act does not provide for any such notice. Under the guidelines issued by the RBI if there is continuing default in payment of interest and repayment of the pricncipal over a period of time the Bank will have to treat the Account as NPA. The Bank will be advising the borrower to regularise the account by paying up the outstanding dues. Thus the borrower already knows that if he does not regularise the account, it will be treated as NPA.
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