This post details what all particulars are to be entered into in the demand notice of Sarfaesi.
Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act(hereinafter referred to as 'Sarfaesi Act'/'Act') refers to issue of notice to the borrower who makes default in payment of the dues. This notice will be in writing. This is the first stage of initiation of steps under Sarfaesi Act.
There are several particulars to be entered in this notice. It is stated in Sub-Section 3 of Section 13 in the Act. They are the details of amount payable and the secured assets. But apart from that there are so many things to be noted to be entered in the notice. They are described below. Without these essential ingredients a demand notice under Section 13(2) will not be perfect.
1.Details of Secured Creditor:-
The Secured Creditor means either Banks or Financial Institutions as per the Act. In the notice it should be evident from the very look that it is issued from a particular secured creditor. The name of the institution can be entered as header and the address of the institution including all contact numbers and communication addresses may be entered as footer.
2.Intimate borrower on the very first line of the purpose:-
It is not mandatory but desirable to enter below the header that the notice is issued under the Act as per the particular section.
3.Address of parties:-
The next line is the address portion. Here the address of the borrower has to be entered. If the permanent and present address of the borrower is different then notice has to be issued to both the addresses. Even though notice is sending separately, all address should be contained in every individual notices. Another important thing is that the notice has to be sent to the guarantors and mortgagors as well in their permanent and present addresses. This will show that the secured creditor has taken all possible steps to inform the parties about the severe methods to be adopted in future.
All the names and addresses should be entered in every individual notices. This will inform each person that against whichever persons action has been initiated by the secured creditor.
After properly addressing the parties(Dear Sir/Madam)State both Head Office/Registered Office and Branch of the secured creditor in the first paragraph. In the second paragraph state clearly that the particular branch of the secured creditor advanced amount to the particular borrower.
5.Details of Advance:-
The loan details has to be entered specifically. The nature of advance, the specific amount, date of advance, revival dates, total balance as on the present or particular date etc to be entered.
The amount is the total amount on a particular date which involves interest suspense, costs, expenses etc as per the books of account of the secured creditor. Any previous remittance has to be properly debited.
7.Details of property secured:-
The secured asset means the property, either movable or immovable, on which the security interest is created. Security interest is created over a property by way of hypothecation, charge, mortgage etc. The particulars of these properties has to be entered suitably in the notice. Property details are to be entered in the body of the notice and also in the schedule annexed to the notice at the end. Immovable properties must be properly identifiable by the description. While entering movable property description, the place in which it is stored, lying etc may also be entered.
8. Important Dates:-
There are some important dates which should be entered in the notice at suitable places. The date on which the account was classified as non-performing asset has to be stated. Apart from that the date as on which the total amount due has been calculated is to be entered. Also, the date from which the total amount along with other cost, expense and interest has to be remitted till full repayment should be noted. The notice must always state the date of recall notice/preliminary notice sent before issuing Sarfaesi notice.
9. Time Limit for Repayment and consequence on failure:-
The notice must inform the parties the time limit by which the dues are to be cleared. As per the Act, a period upto sixty days will be given for repaying the full dues. Apart from informing this time limit, the financial institution should also state the consequences on not repaying the entire dues within the prescribed period. The several actions which can be taken by the secured creditor on non-payment of the amount within the time limit is stated in Section 13(4) of the Act.
10. Restrictions on borrower:-
The notice should also state the restrictions imposed on the borrower as per Section13(13). By way of this section the borrower is restricted to transfer the secured asset by way of sale, lease etc after receipt of the notice.
11. The sign and seal of the Authorised Officer has to be affixed in the notice without which the same has no validity in the eyes of law.