SARFAESI Act: quashing of demand notice

t

Question asked on: 01/02/2019

Under sarfaesi act violation of procedure and proceeded for property auction. In possession notice, date of demand notice was incorrect. Moreover, under 13 (3–A) bank has not responded for the representation given on the demand notice. How to quash or stop the notice of sale and possession notice?

Advised by: Shivendra Pratap Singh,

SARFAESI Act is special legislation. IT empowers the banks to recover dues from defaulting borrowers without the intervention of courts.

The borrower has the right to receive a demand notice under section 13(2) of the SARFAESI Act. The said demand notice bears the total outstanding and sixty days time period for its payment.

Sixty days period for payment of outstanding starts from the date of receiving of notice.

As per the provision of the SARFAESI Act, the bank cannot take measure under section 13(4) in violation of mandatory requirements. A demand notice with the correct particulars is necessary under section 13(2).

A notice with wrong information has no effect in the eye of law. You should file an appeal before the DRT (Debts Recovery Tribunal) for quashing the said demand notice.

Section 17 provides you with a remedy to appeal before the DRT if aggrieved by the steps under section 13(4). If demand notice has issued and assets declared NPA the Bank will proceed under section 13(4).

When bank likely to take steps under section 13(4) you can move an appeal before the DRT. The DRT has the power to quash the irregular notice.

Notice is invalid because it bears wrong information. In Chimanlal v Mishrilal (1985) 1 SCC 14 the Supreme Court holds that the validity of notice is the precondition for taking a further step. 

Hence, bank authority cannot proceed under section 13(4) by invalid notice. 

Ask Your Question

Shivendra Pratap Singh

Advocate, Lucknow

Advice: 17493

Consultation: 3402

Consumer forum case is dismissed in default

I have filed a case before the consumer forum but due to nonappearance in the hearing my case is dismissed by the forum. Can I file another case before the consumer forum or file an appeal before the state consumer forum.  Your case is dismissed for default. According...

Tenant not deposited due rent in eviction suit

I filed an eviction suit for eviction of tenant on several grounds and non payment of rent is one of them. Suit is filed under section 12(1); 12(3)(a); 12(4) Bombay rents hotel and lodging house rent control act 1947. Tenant has not been deposited due rent on serving...

Right to property under article 300 A

Whether the right to property is a fundamental right under the constitution of India, I am afraid that the government will not pay the fair price of my land. The government has acquired my land without payment of compensation. What is the remedy against such arbitrary...

How can I file PIL on environmental issues

What is the procedure to file PIL? What kind of expenditure is expected in a PIL against central government for environmental related issues? Any citizen of India can file Public interest litigation either before The supreme court of High court. There is same...

Cancellation of contract

My company had signed a contract with another company for digging the land for construction of railway lines and rail bridges. At the time of contract all the terms and conditions were finalised by the other company. Other company published a tender for the...

quick Advice

Get A Quick Advice

Book an appointment for 15 minutes and consult with an expert over the phone within minutes

Talk to Advocate Shivendra

Book a phone consultation for 30 minutes and get solid advice on the phone

Book it Now