Module: General Practice
Q75: With reference to the procedure under Section 13 of the SARFAESI Act, consider the following statements:
The secured creditor must issue a demand notice giving the borrower 60 days to discharge the liabilities.
The borrower has the right to make a representation or objection to the notice, and the secured creditor must respond within 15 days.
If the borrower fails to pay, the creditor can take possession of the asset under Section 13(4) immediately after the 30th day.
Which of the statements given above are correct?
The borrower has the right to make a representation or objection to the notice, and the secured creditor must respond within 15 days.
If the borrower fails to pay, the creditor can take possession of the asset under Section 13(4) immediately after the 30th day.
Which of the statements given above are correct?
✅ Correct Answer: A
Statement 1 is Correct: Under Section 13(2), the secured creditor must send a notice in writing to the borrower to discharge in full his liabilities within 60 days from the date of notice.
Statement 2 is Correct: As per Section 13(3A), if the borrower makes any representation or raises any objection, the secured creditor shall consider it.
If the creditor rejects the objection, they must communicate the reasons for non-acceptance within 15 days of receipt of such representation.
Statement 3 is Incorrect: The secured creditor can take recourse to measures under Section 13(4), such as taking possession, only after the expiry of the 60-day period mentioned in the demand notice, not 30 days.
Statement 2 is Correct: As per Section 13(3A), if the borrower makes any representation or raises any objection, the secured creditor shall consider it.
If the creditor rejects the objection, they must communicate the reasons for non-acceptance within 15 days of receipt of such representation.
Statement 3 is Incorrect: The secured creditor can take recourse to measures under Section 13(4), such as taking possession, only after the expiry of the 60-day period mentioned in the demand notice, not 30 days.