After a default by the borrower, the lender (financial institution) must issue a notice under Section 13(2) of the SARFAESI Act. This notice demands repayment of the dues and gives the borrower 60 days to make the payment.
If the borrower fails to repay the dues within the 60-day notice period, the lender can take possession of the secured asset under Section 13(4). This includes physical possession or taking over the management of the asset.
If the borrower challenges the action of the lender, they can file an application before the Debt Recovery Tribunal (DRT) under Section 17 within 45 days from the date of taking possession of the asset.
After taking possession, the lender can sell the secured asset under Section 13(8). The sale must be conducted following the due process and within a reasonable time frame as prescribed by regulations.
If dissatisfied with the DRT's decision, an appeal can be filed with the Debt Recovery Appellate Tribunal (DRAT) within 30 days from the date of the DRT's order.
If still dissatisfied with the DRAT's decision, the borrower may approach the High Court or Supreme Court, but there are no specific time limits defined under SARFAESI for such appeals.
Under the SARFAESI Act, the key time limits include 60 days for the borrower to respond to a notice of default, 45 days to challenge the lender’s action before the DRT, and 30 days to appeal the DRT's decision to the DRAT.
Answer By Law4u Team
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