Sarfaesi act and limitation
Terry DCruz
(Querist) 11 December 2014
This query is : Resolved
Section 36 of Serfaesi Act says:-
36. Limitation
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 financial asset is made within the period of limitation prescribed
under the Limitation Act, 1963 (36 of 1963).
Claim is often made by a notice under section 13(2)to the borrower to discharge in full his liabilities.
For any money claim the limitation is 3 years so can a notice u/s 13(2) be issued beyond 3 years after classification of debt as NPA.
I request Experts opinion of this.
Sailesh Kumar Shah
(Expert) 11 December 2014
it would be better if you put your facts instead of referring law.
Terry DCruz
(Querist) 12 December 2014
My Case is :-
SME Loan was sanctioned in 2007.
There was change is Govt. Policy and my Business was under Prohibited list and thereby not generating profits to repay the installments as per the agreement.
Declared NPA 30.06.2010
Sarfaesi Notice was issued u/s 13(2)on 29.11.2010
Objection / representation filed within 60 days i.e on 26.01.2011. No reply was ever given by the Bank.
Business was sealed by the Government on 09.02.2011.
Though Bank had full knowledge did not make any efforts to help the borrower during this difficulty instead filed a money suit on 31.03.2011.
In written statement all facts were brought before the court and thereafter bank did not attend the court. Finally Money suit was dismissed for default on 1.10.2013. The restoration petition filed by Bank has also been dismissed on 27.11.2014.
With the efforts of borrower in other court cases Business was de-sealed and handed over to the borrower on 26.12.2013 in a dilapidated and damage condition.
Damage suit against the Government was filed on 06.04.2014
On 25.11.2014 Bank issued a fresh Notice u/s 13(2) making a demand of Principal + interest upto 24.11.2014.
The date of NPA is 30.06.2010.
The business was sealed on 09.02.2011, Causing supervening impossibility.
Ignoring all these aspects bank is making a money claim u/s 13(2) on 25.11.2014. the notice says to discharge in full the liabilities i.e the Total Amount.
Is it not barred by limitation of 3 years for money claim?
