SARFAESI Act
A law that allows banks to recover secured loan dues by taking possession of the mortgaged property without going to court.
SARFAESI stands for Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. It gives banks and NBFCs the power to enforce security interests (take possession of collateral) without court intervention when a borrower defaults.
The key process: Bank issues a 60-day demand notice under Section 13(2) → if unpaid, takes possession under Section 13(4) → publishes auction notice → conducts e-auction. Borrowers can challenge proceedings at the Debt Recovery Tribunal within 45 days of a possession notice. Time limits are strict — missing them eliminates legal remedies.
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