Under the SARFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) Act of 2002 in India, a borrower has several rights and obligations. Some of the key rights and obligations of a borrower under the SARFAESI Act are as follows:
Rights of the borrower
- Right to receive a demand notice: The borrower has the right to receive a demand notice in writing before the lender takes enforcement action against the property. Demand notice must contain these information.
- Right to dispute the demand notice: The borrower has the right to dispute the demand notice by filing a representation with the lender within the specified time frame.
- Right to appeal: The borrower has the right to appeal to the Debts Recovery Tribunal (DRT) if the representation is not accepted by the lender.
- Right to be heard: The borrower has the right to be heard in any proceedings related to the enforcement of the security interest.
- Right to fair treatment: The borrower has the right to fair treatment and must not be subject to harassment or intimidation by the lender or its agents.
Obligations of the borrower
- Obligation to repay the loan: The borrower has an obligation to repay the loan as agreed in the loan agreement.
- Obligation to comply with the demand notice: The borrower has an obligation to comply with the demand notice and pay the debt or dispute the notice within the specified time frame.
- Obligation to vacate the property: If the property is sold or taken into possession by the lender, the borrower has an obligation to vacate the property.
- Obligation to maintain the property: The borrower has an obligation to maintain the property and keep it in a condition that does not reduce its value.
It’s important to note that the SARFAESI Act provides a legal framework for the enforcement of security interests by lenders and the rights and obligations of borrowers. Borrowers should seek legal advice if they have any questions about their rights and obligations under the SARFAESI Act.