The SARFAESI Act, 2002 does not prescribe any time limit for the Bank to initiate recovery action against defaulting borrowers but this does not mean that Banks can take recovery measure as per its sweet will. LIMITATION PERIOD UNDER SECTION 36 OF SARFAESI ACT, 2002 As per Section 36 of the SARFAESI Act, 2002, a […]
It is often seen that property owners let out their residential or commercial property on rent and the tenant resides or carries on business from such property. The fact that the same property has been mortgaged by the property owner in security for some loan is usually not disclosed to tenants. When there happens a […]
An analytical overview of Section 13(5A) of the SARFAESI Act, 2002, examining its constitutional validity and judicial interpretation in Roger Mathew v. South Indian Bank Ltd. and Mahipal Singh Yadav v. Union Bank of India. Introduction The introduction of Section 13(5A) to the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, […]
Under the SARFAESI Act, once a secured creditor follows the process and takes physical possession of a secured asset with the help of the District Magistrate, the expectation is that the enforcement process has reached a meaningful stage. In reality, that is not always the case. There are instances where, even after possession is taken […]
In SARFAESI matters, borrowers often assume that once an auction is conducted, the outcome is final. A recent order of the Debts Recovery Appellate Tribunal, Allahabad shows that even at that stage, the process remains open to scrutiny. The matter arose from an auction sale of a residential property. The borrower challenged the sale before […]
Raising Challenge to Recovery Drawn under SARFAESI Act, 2002 by filing Securitization Application (S.A.) on behalf of borrowers in Debts Recovery Tribunals.
I. Introduction The concept of equity of redemption lies at the heart of mortgage law. It represents the borrower’s right to reclaim mortgaged property upon repayment of dues before the mortgage is finally foreclosed. While SARFAESI enables secured creditors to enforce security interests without court intervention, this right of redemption operates as a substantive check […]
The SARFAESI Act, 2002 was enacted with a clear objective to enable banks and financial institutions to enforce security interests quickly, without getting entangled in long-drawn litigation. Section 14 fits into this scheme as a support mechanism. It allows the secured creditor to seek assistance from the Magistrate for taking physical possession of secured assets. […]
Can a bank proceed against a guarantor before the principal borrower under the SARFAESI Act? INTRODUCTION In banking recovery litigation, one of the most frequently contested questions is whether a secured creditor can initiate proceedings against a guarantor independently of, or even before, the principal borrower. This issue arises especially in cases where the guarantor […]
The issue of providing notice and opportunity of hearing before classifying a loan Account as a Non Performing Asset is one of the very common ground which is taken by the borrowers when raising challenge to SARFAESI action undertaken by a creditor. The RBI master circular dated 01st April, 2025 in-line with its previous circulars […]