Sarfasi act

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, allows banks and financial institutions to auction properties (residential and commercial) when borrowers fail to repay their loans. It enables banks to reduce their non-performing assets (NPAs) by adopting measures for recovery or reconstruction.

As regards SARFAESI Act is concerned, subsequent to default as per the provision, Bank is entitled to issue notice u/s 13 (2) of The Act and provides 60 days time to the defaulting borrower to regularize and clear all his liabilities.  That, to the said notice, the borrower can raise objection pursuant to receipt of the same bank has to reply the objection if any raised within 7 days from the receipt of the objection as to non-acceptance of the objections.

In case if the borrower does not clear up or discharge all his liabilities, then in such case, the secured creditor or bank can issue notice u/s 13 (4) and taken possession of the property i.e. symbolic possession pursuant to same the bank can/may proceed for auction sale for which the bank has to issue public notice in news paper and fix the sale notice at conspicuous place at the mortgaged property.

That, the said action of the secured creditor/bank can be challenged within 45 days by preferring an application before DRT.

i am a women enterpreneur with loan under CGTMSE. The business is not doing good giving me continous loss, i am finding myself helpless in paying the EMI and handling the business.

Will bank permit me to sell the asset (primary) and accept the reliased value as full settlement.

can bank sue me for the balance if the loan is guaranted under CGTMSE.

Can bank attach my husbands property for this.

Thanks Mr Yougesh for the suggestion. i downloaded the entire act and the same thing (as you mentioned) was given there, but, still bit of confussion. i will write the whole episoide:

1. in month of March, a letter from zonal office (chief manager rural) comes stating "the outstanding of blah HTL a/c is 6,58,000/= on 19-01-2012 and clear this outstanding in 60 days otherwise the sarfaesi act shall apply."

2. on 17/04/12 a reply was sent to the same officer saying "on 28/03/12 the statement from the branch was 5,58,000/- not 6,58,000/- and so please clearify". no reply to that even today.

3. on 30/04/12 the same letter was sent to regional & zonal managers, but no reply till today.

4. on 5/6/12 again the same letter was sent to DRT reginal and branch office, but till today no reply.

5. on 25/6/12 a phone call comes "we are going to take possession of that house" from zonal office.

6. on the same day another letter to branch manager is sent saying "the complete matter has been sent to above mentioned authorities, pls hold for the action till i get reply from them".

7. on the next day the local news paper display "possession of house".

All the letters were sent to respective officers via registered post with acknowledgement, the acknowledgements have been signed with seal. on 02/07/12, on-line the same letter was sent to bankdrt.com and today the reply comes "it has been forwarded to the nodal officer Banking Ombudsman".

sir, my question is:

1. the actions (serving of sarfaesi notice and then taking possession) of the lending bank was correct and lawful ??

2. the action of the borrower (by objecting to the balance outstanding and by writing letter to the higher authorities) was correct ??

3. what should be done now in this case.

regards

arvind

Thanks Mr Yougesh for the suggestion. i downloaded the entire act and the same thing (as you mentioned) was given there, but, still bit of confussion. i will write the whole episoide:

1. in month of March, a letter from zonal office (chief manager rural) comes stating "the outstanding of blah HTL a/c is 6,58,000/= on 19-01-2012 and clear this outstanding in 60 days otherwise the sarfaesi act shall apply."

2. on 17/04/12 a reply was sent to the same officer saying "on 28/03/12 the statement from the branch was 5,58,000/- not 6,58,000/- and so please clearify". no reply to that even today.

3. on 30/04/12 the same letter was sent to regional & zonal managers, but no reply till today.

4. on 5/6/12 again the same letter was sent to DRT reginal and branch office, but till today no reply.

5. on 25/6/12 a phone call comes "we are going to take possession of that house" from zonal office.

6. on the same day another letter to branch manager is sent saying "the complete matter has been sent to above mentioned authorities, pls hold for the action till i get reply from them".

7. on the next day the local news paper display "possession of house".

All the letters were sent to respective officers via registered post with acknowledgement, the acknowledgements have been signed with seal. on 02/07/12, on-line the same letter was sent to bankdrt.com and today the reply comes "it has been forwarded to the nodal officer Banking Ombudsman".

sir, my question is:

1. the actions (serving of sarfaesi notice and then taking possession) of the lending bank was correct and lawful ??

2. the action of the borrower (by objecting to the balance outstanding and by writing letter to the higher authorities) was correct ??

3. what should be done now in this case.

regards

arvind