What is the effect of non-publication of Possession Notice under SARFAESI?
When any borrower's account is classified as 'non-performing asset' and the secured creditor(banks, other financial institutions etc) issues a demand notice under Section 13(2)to him and the guarantors to pay off the entire debt. As stated in the statute viz. the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act,2002 a time period of sixty days is given to the defaulters to repay the entire debts. If the persons are not repaying the entire debt due to the Bank on or before completion of the time period specified in the demand notice, the Bank has the right to take possession of the properties.
There is a stipulation in the statute about the publication of possession notice. At the time of taking possession of the properties which are the secured assets mortgaged by any parties for the purpose of the advance granted by the bank, a notice in writing will be given to the concerned parties by hand, post etc. Thereafter the possession notice is pasted or affixed in some conspicuos part of the mortgaged property/secured asset and photographs will be taken. The statute stipulates that the possession notice has to be published in two leading news papers. Therefore, after taking possession the Bank is required to publish the possession notice in two newspapers. If this provision is not followed in its essence, the result is that all the proceedings by which the SARFAESI action was initiated, will be vitiated. Please note that the time limit for publication of this notice in news papers in seven days from the day of taking possesion of the property.