The secured creditor or his authorized officer may take
recourse to one or more of the measures provided in sec.13 (4) of the Act to
recover his secured debt who has the following options. He may take possession
of the secured assets of the borrower including the rights to transfer by way
of lease assignment or sale. He may take over the management of the secured
assets of the borrower, including the right of transfer of lease assignment
sale. He may appoint any person as manager to manage the secured assets, the
possession of which has been taken over. The secured creditor may require by
notice any person who has acquired any secured assets from the borrower and
from whom any money is to pay the secured creditor so much of the money as is
sufficient to cover the secured debt.
Both in the case of movable and immovable properties, it is
obligatory to serve a notice of thirty days to the borrower about the sale. The
notice of sale shall be also published in two leading widely circulated
newspapers, of which one shall be of the local language. The public notice
shall contain important details of the property, the amount of dept, reserve
price, time and place of public auction earnest money to be deposited etc. The
notice shall be affixed on the conspicuous part be put on website.Sale by any
other modes than auction/tender shall be on terms settled between the parties.
After confirmation and completion of sale process, the authorized completion of
sale process, the authorized officer shall issue a sale certificate in favor of
the purchaser in the prescribed format.
If the secured assets are movable properties, the authorized
officer shall take the possession in the presence of two witnesses. The
panchanama shall conform to the prescribed format. After taking possession, the
authorized officer, shall prepare an inventory of the property as per the format
prescribed and shall deliver a copy of such inventory to the borrower or his
authorized agent.
If the property is subject to speedy or natural decay or
expenses for keeping such property are likely to exceed the value of the
property the authorized officer may sell it at once. It is the duty of the
authorized officer to take proper care and take steps for preservation and
protection of the assets. If necessary the assets may be insured until they are
sold or disposed of.
While taking possession or sale of the secured asset, the
secured creditor may request the help of chief metropolitan Magistrate or
District secured assets fall.
Right
of appeal.
Under sec.17 of the Act the person aggrieved by the actions
of the secured creditor as provided in sec13(4) may make an application to the
Debt Recovery Tribunal having jurisdiction, within 45 days from the date on
which action has been taken. Similarly any person aggrieved by the order made
by DRT under section 17 may prefer an appeal to the appellate tribunal within
30 days from the date of the order.
Transaction
not covered under the Act.
The following transactions are excluded from the provisions
of the SRFAESI Act.
a] A lien on any goods money or security given by or under
the Indian Contract Act, Sale of Goods Actor Any other law for the time being
in force;
b] Pledge of movables within the meaning of sec.172 of the Indian
Contract Act.
c] Any conditional sale hire purchase or lease or any other
contract in which no security interest has been created;
d] Any property not liable to attachment;
e] Any security interest created in agricultural land;
f] Any security interest for securing payment of any
financial asset not exceeding rupees one lakh;
Limitation:
The provisions of the Limitation Act 1963 are application to
the Act Therefore taking possession of the property or appointing a management
of the securities are to be carried out within the period stipulated in the
Limitation Act 1963
The housing loan borrower may note that if they default in
payment of dues to banks and the loan account become NPA the banks can initiate
action under the SRFAESI Act issue notice to the borrowers, take possession of
the building and proceed to realize the dues by sale of the mortgaged property
therefore it is suggested that the housing loan borrowers may repay the housing
loan as per schedule to protect their property.
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