SARFAESI ACT
MANOJ HARIT
(Querist) 23 February 2010
This query is : Resolved
Sir, What is the period of limitation for the Bank to proceed under Sec - 13(4) of Sarfeasi Act after issuance of Notice under sec - 13(2). If a Notice u/s 13(2) is issued in Feb - 2007 can the Bank proceed under the Notice in March - 2010 or it is barred by Limitation?
Raj Kumar Makkad
(Expert) 23 February 2010
Limitation in the given quarry is 3 years and thus notice of the bank is beyond limitation.
Silabhadra Sastry Advocate
(Expert) 23 February 2010
Dear Manoj,SARFEASI act is a dracunian law having absolute power with bank.If 13(2) notice isuued agains the loanee,then the loanee is given 60 days time to pay bak the loan.If he fails to pay back the loan within that period then the bank with start attachment process at any time after 60 days through the process of law,which is to be executed by the District Magistrate or colector.Or if the loanee replies the bank with due reasoning then the bank has to reply back,in between the loanee can chalenge the wrong done by the bank.further 13(2) notice can only be chalenged in High Court,DRT ,as because Civil Court Jurisdiction is a bar.This Act was chalenged in Supreme Court,You can see a case law for beter information i.e. Maredia Chemicals Vrs State Bank Of India 2004 Supreme Court.Regards Silabhadra Sastry,Advocate,Bhubaneswar,you can send me your mail at shastry.adv@gmail.com
J K Agrawal
(Expert) 23 February 2010
Notice of 13(2) restricts the bank up to 60 days and then the bank is free to take any action. This saction does not provide any right or remedy to bank but only restricts it for sixty days only. So the question of limitation not arises. Question of limitation only arise when a cause of action arises. The cause of action with bank arised very first day when the defaulter did not make payment according to the agreement. S 13 (2) does not create new right to bank nor running of time from first cause of action stops or regain strength of new limitation period by such notice.
So the answer is That Bank can take any action only up to the period of limitation available to it otherwise.
Here I would like to add one more thing. suppose it remains only 10 or 5 days limitation to file a suit and bank gives a notice under s 13(2), it will extend the period of limitation for 60 days.
In your case appearantly there is no transattion since last 3 years so right to recovery is time barred but if bank is having more limitation period like in mortgate case where limitation period is very long, bank has a chance with it.
These are my personal views and I have no backup of any citation in this regard.
Adv.Shine Thomas
(Expert) 24 February 2010
Where a bank or financial institution has to recover any debt from any persion,it makes an Original Application to the tribunal against such person.I think,there is no case for limitation.
