Section 13-2 - borrower has availed three different credit
1 year ago
A borrower has availed three different credit facilities from different branch of some Bank by mortgaging his residential house. Two accounts turned NPA third one is a standard asset. What is the process of issuing notice to the borrower under section 13(2) of sarfaesi act?
A.Dear Client,
Section 13 (2) of the act: Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under sub-section (4).
Section 13(2) of the said Act would certainly place an embargo on the secured creditor to take any of the steps contemplated in section 13(4) without a notice being issued and without the statutory period running out. But such embargo would not extend to the measures otherwise available to the secured creditor but which have not been set down under section 13(4) of the Act. The process when initiated requires the debtor to discharge his liability within 60 days.
Section 13 (2) of the act: Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under sub-section (4).
Section 13(2) of the said Act would certainly place an embargo on the secured creditor to take any of the steps contemplated in section 13(4) without a notice being issued and without the statutory period running out. But such embargo would not extend to the measures otherwise available to the secured creditor but which have not been set down under section 13(4) of the Act. The process when initiated requires the debtor to discharge his liability within 60 days.
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