BANKING AFFAIRS

Detailed explanation-1: -In case a borrower is unable to repay his/her loan for a period of six months consecutively, the lender bank has the legal right of sending a notice to him and then asking him to clear all the dues within 60 days.

Detailed explanation-2: -SARFAESI Act, 2002 provides power to a bank or financial institution to seize the property of a defaulting borrower. As per the SARFAESI Act procedure, the banks issue notices to the defaulting borrowers to discharge their liabilities within 60 days period.

Detailed explanation-3: -According to Rule 8, paragraph (6), the borrower must be issued a notice of 30 days before selling any immovable secured property. The bank has only provided the borrower ten days’ notice in its selling notice, which is quite short for the sale of the mortgaged property under sarfaesi act.

Detailed explanation-4: -Recourse to remedies provided under Section 13(4) in case of failure to discharge debt: 2.1 In case the secured debt is not discharged within the notice period (sixty days), the Secured Creditor can enforce security interest and take one or more of the actions as enumerated in the Section13 (4) of the act.

Detailed explanation-5: -The Court ruled that since there was a failure on the part of the respondent to serve notice of not less than 15 days upon the petitioner, therefore, the notice of sale was bad in law and the consequent sale was liable to be set aside.