Module: General Practice
Q29: According to the provisions of the SARFAESI Act, 2002, the measures of the Act do NOT apply if the outstanding amount of debt due to the secured creditor is less than which of the following thresholds?
✅ Correct Answer: C
The provisions of the SARFAESI Act do not apply if the amount due is less than Rupees 1.00 Lakh.
Statutory Reference: Section 31(h) of the SARFAESI Act states that the Act does not apply to any security interest created in financial assets for an amount not exceeding one lakh rupees.
Additional Threshold: Furthermore, Section 31(j) specifies that the Act also does not apply if the remaining debt is less than 20% of the principal amount and interest.
Both conditions serve to prevent the invoking of harsh enforcement measures for trivial amounts.
Statutory Reference: Section 31(h) of the SARFAESI Act states that the Act does not apply to any security interest created in financial assets for an amount not exceeding one lakh rupees.
Additional Threshold: Furthermore, Section 31(j) specifies that the Act also does not apply if the remaining debt is less than 20% of the principal amount and interest.
Both conditions serve to prevent the invoking of harsh enforcement measures for trivial amounts.