If the borrower/mortgagor/guarantor is a company under the Control of Official Liquidator in winding up proceedings, what are the procedures to be complied with during the course of SARFAESI proceedings?
SARFAESI Act is a tool for speedy remedy in the hands of Banks and Financial Institutions for securing repayment of amount advanced. The procedure starts by issuing a recall notice to the defaulted party. Then a demand notice will be send to the party under Section 13(2) specifically mentioning the amount due with interest to repay within 60 days of the receipt of the notice. If the party fails to repay the amount within the time specified, the secured creditor can take symbolic/actual possession of the property mortgaged.
In case of borrowers/guarantors/mortgagor being a company under Official Liquidator, demand notice to be served on the Official Liquidator. Since Official Liquidator was the custodian of all assets of the company, Authorised Officer has to take possession under Section 13(4) by giving possession notice to him and sale notice is to be served on him prior to 30 days of sale. After realising the sale proceeds, the same shall be distributed in accordance with Section 529A of Companies Act. Workmen dues as adjudicated by Official Liquidator/Labour Court shall have paripassu charge with that of the secured creditor. All other procedures applicable for taking possession, sale, sale confirmation etc are to be complied with.