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Recovery Division, Head Office

7, Bhikhaiji Cama Place, New Delhi

In supersession of Recovery Division’s


Circulars no.
(i) 37/2015 dated 29.12.2015.
(ii) 18/2016 dated 26.04.2016
30.06.2017
TO ALL OFFICES
RECOVERY DIVISION CIRCULAR NO. 31 /2017
SARFAESI ACT- CONSOLIDATION OF IMPORTANT ASPECTS

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Govt. of India promulgated the Securitization and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) and also

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notified the Security Interest (Enforcement) Rules 2002 with the object of quicker
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resolution of non-performing assets of the banks/FIs. The Security Interest
(Enforcement) Rules 2002 prescribe the manner of exercise of rights of secured
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creditors under the SARFAESI Act.
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2. In order to enforce provisions of SARFAESI Act, Bank has been framing various
guidelines like granting permission for initiation of SARFAESI action, formation of
Committees for fixation of Reserve Price and taking SARFAESI action to the
logical end, within the ambit of the Act.
3. The basic guidelines on SARFAESI Act are stipulated in the SARFAESI Manual-
2008, however for further amendments and clarifications Recovery Division
and Law Division have been issuing Circulars from time to time.
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4. Latest amendments in SARFAESI Act, 2002 as made vide Enforcement of


Security Interest & Recovery of Debts Laws & Miscellaneous Provisions
(Amendment) Act, 2016 have been circulated vide Law Division Circular no.
3/Law/2016 dated 06.09.2016. Latest amendments made by Central
Government in Security Interest Enforcement Rules 2002 vide Notification
No. 775 dated 03.11.2016, published in Gazette of India on 04.11.2016 have
been circulated vide Law Division Circular No. 5/Law/2016 dated
16.11.2016.

5. To facilitate the field staff, guidelines issued through different circulars by


Recovery Division on various important aspects, have been consolidated, and
the consolidated revised guidelines having regard to amendments made in
SARFAESI Act / Security Interest Enforcement Rules, 2002 are enclosed for
meticulous compliance.

(V K Goyal)
Dy. General Manager
1
INDEX
S.No Particulars Page No.
1. SARFAESI Act- Work Flow Chart 3-9
2. Delegations of powers to initiate SARFAESI action 10
3. Authorized Officer, Demand Notice & Service of Demand Notice 10-11
4. Tracking of messages/notices 12
5. Reply to borrowers’ representation/objections under Section 13 (3A) 13
6. Possession of secured assets 13-15
7. Fixation of Reserve Price 15-17
8. Sale of secured assets, Confirmation of sale, Sale Certificate, Committee of Officers 17-20
9. Important aspects/Common discrepancies, Bidding at more than reserve price 20-21
10. Keeping SARFAESI action in abeyance, Publication under SARFAESI Act 21
11. Hypothecated Book Debts 22-25

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12. NPA accounts under Consortium/Multiple banking lending 25-27
13. Strategies for successful Sale Process 27-31
14. Sale of immovable secured assets through Private Treaty 31-32
15. Failure/Cancellation of sale process
16 32-33
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16. Stay against SARFAESI Act 33-35
17. Land mark DRT orders 35-38
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18. Annexure-I (Revised SI-4) 39-40


19. Annexure-2 (Revised SI-4A) 41-43
20. Annexure-3- Tracking messages/notices sent by post 44-46
21. Annexure-4- Tracking messages/notices sent in Microsoft Outlook 47-51
22. Annexure-5- Reply to representation /objections made to demand notice 52-53
23. Annexure-6 (Revised SI-7A) 54
24. Annexure-7 (Revised SI-7B) 55
25. Annexure-8 (Revised SI-7C) 56
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26. Annexure-9 (Revised SI-7D) 57


27. Annexure-10-A- Supplementary Agreement in case of OTS 58-60
28. Annexure-10A-1- letter of consent from guarantor 61
29. Annexure-10-B- Supplementary Agreement in case of reasons other than OTS 62-64
30. Annexure-10-B-1- letter of consent from guarantor 65
31. Annexure-11- Notice to borrower for providing details of Book debts/receivables 66
32. Annexure-12- Public Notice 67
33. Annexure-13 (Revised SI-10) 68-69
34. Annexure-14 (Revised SI-10A) 70
35. Annexure-15 (Revised SI-10B) 71
36. Annexure-16 (Revised SI-15) 72
37. Annexure-17 (Revised SI-17) 73-74
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SARFAESI Act : WORK FLOW CHART

Mounting NPAs have been cause of concern to banks as they have to maintain capital
at the prescribed level to comply with the capital adequacy norms, continue incurring
costs to serve the funds blocked in NPAs and bear the loss of opportunity to lend these
funds.

It is a well established fact that SARFAESI Act can be used as an efficient tool for
expeditious resolution of NPAs. However, its efficacy is dependent on the chain of
actions initiated one after the other. Despite detailed guidelines contained in the
SARFAESI Manual 2008, it has been noted that the field officials are still not fully
conversant with the expected/standard time-line to be observed for initiating
various actions, permitted under SARFAESI Act.

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Keeping in view the delay noted in the operative measures taken by the
Branches/Circles/ZOs, a Work Flow Chart of SARFAESI Action is given below as a
ready reckoner providing for time lines to be observed by the
Branches/Circles/ZOs/Authorized Officers for the various measures of SARFAESI

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Action culminating into recovery and reduction in NPAs, ultimately.
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In the Work Flow Chart of SARFAESI Action an attempt has been made to briefly
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describe the procedure and the various steps involved in the SARFAESI action from the
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inception till its logical end along-with the well defined timelines to be adhered to
strictly. However, the present Work Flow Chart is not intended to be a substitute of the
detailed operative guidelines and SARFAESI Manual, which will continue to be referred
as reference material.

Actions Under SARFAESI Act Timeline For


Initiating Steps
Under SARFAESI
Act
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An account becomes NPA


Prepare SI-2 (SARFAESI Manual). Get administrative sanction for Day-1
Recall and taking SARFAESI Action, which lies with Branch Head
irrespective of scale.
Issue 60 Days’ “Notice under Section 13(2)” of SARFAESI Act-cum- Day 2nd/4th
Recall Notice/Invocation of Guarantee as per format revised SI-4
(Annexure-1 of this circular) for borrowers and revised SI-4A
(Annexure-2 of this circular) for guarantors.

(Section 13(2) Notice to be issued by Designated Authorized Officer


appointed by Circle Office. Branches upto Scale III to send SI-
2(SARFAESI Manual) along with draft notice to Designated Authorized
Officer by Circle Office, who will issue Notice within 3 days.)
Notice served: Notice un-served: By 9th/11th Day
In the ordinary course, service Within a reasonable period, say of 7
of notices is effected within a days or so, if service of notices on
reasonable period, say 7 days all/some of the borrowers who have
or so. Check and ensure that created security interest is found to be
notice stands served on all not effected, fresh steps be taken for
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the borrowers who have service / Substituted Service by
created security interest.affixation of 13(2) Notice where
Authorized Officer to satisfy borrower /mortgagor ordinarily resides
that service is complete. Proof or carries on business and also by
of sending notices, (Postal publication in two newspapers, one of
Receipts, AD Cards, POD, which should be in vernacular
etc. be kept on records). language. Authorized Officer to satisfy
Notice can also be served that service is complete. Proof of
through hand delivery. sending notices, (Postal Receipts,
Notices received back (without opening
/tearing them), AD Cards, POD, and
publications in the newspapers etc. be
kept on records.)
Representation by the borrower under Section 13(3A) By 69th/ 71st
In case borrowers submit representation/raise objections under Section
13(3A), suitable reply to be submitted by Authorized Officer within
Day
maximum mandatory time limit of 15 days from the date of receipt of

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representation from the borrowers, {preferably within the 60 days period
of having issued Notice under Section 13 (2)}.
STEPS AFTER SECTION 13 (2) NOTICE

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Engagement of Supporting Agency and its role All these steps to
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For pre-take over examination of identified secured assets, taking
over possession, obtaining assistance of DM/CMM for taking over
be
possession, acting as custodian, providing security for protection andsimultaneously
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preservation of assets taken in possession and assisting bank for completed by


sale of assets. st
69th/71 Day
Take permission of Circle Head/ZM for engagement of supporting All these steps to
agency
Letter to the Supporting Agency to be issued by Authorized Officer as
be
to its engagement and specific services/support it has to render to simultaneously
Authorized Officer, as per policy guidelines pertaining to Supporting completed by
Agencies. st
69th/71 Day
Supporting agency to make pre possession survey and submit
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report. The report be examined as to what precautions and steps


need to be taken for possession. If everything is found in order,
Authorized Officer to proceed for further action. In
Consortium/Multiple Banking Accounts consent of 60% of the
secured creditors need to be taken before taking possession /other
measures u/s 13(4) of SARFAESI Act.
Pre-Possession Notice (Form SI-6 of SARFAESI Manual) On 69th /71st Day
In case service of notice is found to be complete and representation
u/s 13(3A), if any received, stands duly replied, issue “Notice to
deliver possession of secured assets” (Form SI-6) giving reasonable
time to hand over possession of secured assets. (Although issue of
Notice to deliver possession, is not a legal requirement as per
SARFAESI Act)
Taking over of possession On 79th/ 81st Day
Wait for 10 days after issue of “Notice to deliver the possession of
secured assets” and in case still there is no response, proceed under
Section 13(4) to take Possession on or after the date given in the
said Pre-Possession Notice. Check up that there is no stay
granted by DRT/ Court/High Court. Court orders received at any

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stage are to be honoured after examining its intent & directions.
Possession Day (Movables) Possession Day (Immovables)
1) Take possession of movables. 1) Take Possession of
2) Prepare Panchnama form immovable property by delivering
On 79th/ 81st Day
revised SI -7A/7B/7C/7D Possession Notice (Form-SI-10-
(Annexures 6,7,8,9 of this Revised form available in this
circular) circular as Annexure) to the Publication by
3) Prepare inventory under rule borrower. th
4(2) as per format (SI -8). (2) Simultaneously affix such 82nd/84 Day
(4) Deliver a copy of inventory Possession Notice on the outer
(SI-8- SARFAESI Manual) to the door or at such conspicuous
person entitled to receive the place of the property.
same. However, in case of (3) Prepare inventory as per
refusal to give acknowledgement, format (SI -9- SARFAESI
send it by Regd.Post AD/Speed Manual).
Post/Courier etc
(5)Take Valuer with you for In terms of Govt. of India

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valuation as it would obviate notification dated 03.11.2016,
delay in getting valuation of All notices under new sub rule
movables. (2 B) of Rule 4
“ All notices under these rules

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may also be served upon the
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borrower through electronic
mode of service in addition to the
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modes specified under Rule 3.
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(4) Deliver a copy of Possession


Notice and inventory (SI-9) to the
person entitled to receive the
same. However, in case of
refusal to give acknowledgement,
send it by Regd.Post AD/Speed
Post/Courier etc
(5)Publication of Possession
Notice
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As per Rule 8(2), for immovable


properties it is mandatory to
get the “Possession Notice”
(Revised Forms SI-10, SI-10A &
SI-10B- are available in this
circular as Annexures 13,14 &
15), which may be suitably
modified as circumstances
warrant published in the two
leading newspapers within 7
days out of which, one in
vernacular language having
sufficient circulation in the
locality.
(i) Form SI-10- Possession
Notice for a single NPA A/c (may
be multiple properties)
(ii) Form SI-10A- Possession
Notice for multiple NPA A/cs and
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related to one Authorized Officer.
(iii) Form SI-10B- Possession
Notice for multiple NPA A/cs and
related to more than one
Authorized Officer.
(6)Take Valuer with you for
valuation as it would obviate
delay in getting valuation of
secured assets.
Valuation of secured assets By 82nd/84th Day
• Obtain Valuation Report from Board Approved Valuer
• (No need to wait for actual possession of immovable secured
assets)
Actual physical possession not delivered voluntarily/ resisted File DM/CMM
by borrower
If there is resistance in delivering actual possession:
application by
nd
• Filing of application before DM/CMM for taking possession u/s 90th/ 92 Day

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14 of SARFAESI Act.
• When application is allowed, possession be taken as per
orders of the DM/CMM. In terms of amendments made in the
provisions of Section 14 of the SARFAESI Act, on

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application/affidavit of the bank, the District Magistrate/Chief
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Metropolitan Magistrate will henceforth pass suitable orders
for taking possession of the secured assets within a period
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of 30 days. If no order is passed by him within 30 days for
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reasons beyond his control, he may, after recording reasons,


will pass orders within such further period but not exceeding
in aggregate 60 days.
Fixation of Reserve Price of secured assets (movables & By 84th/86th Day
immovables)
Authorized Officer to send recommendations to COCESI along with
valuation reports and get fixed the Reserve Price and the mode of
sale. COCESI to finalize the Reserve Price maximum within 2 days.
Movables Immovables Issue of Notice of
 Issue “Notice for intended  Issue “Notice for intended
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intended Sale
Sale by Auction/Tender” of 30 Sale by Auction/Tender” of
and Publication
Days (Form SI-13- 30 Days (Form SI-13).
SARFAESI Manual).  Issue Public Notice
by 87th/89th Day
 Issue Public Notice (Proclamation of Sale) SI-14
(Proclamation of Sale) SI-14 /Invitation for Tender -form Day of Auction
/Invitation for Tender -form SI-24. 121st/123rd
SI-24-SARFAESI Manual .
 Serve notice of intended sale
 Serve notice of intended sale
by Auction/Tender SI-13 sale
by Auction/Tender SI-13 and
by Auction/Tender and
Proclamation of Sale SI-14
Proclamation of Sale SI-14
/Invitation for Tender -form
/Invitation for Tender -form
SI-24 on the Borrower and
SI-24 on the Borrower
guarantors.
/Mortgagor and guarantors.
 Publish Public Notice
(Proclamation of Sale SI-14)  Proclamation of Sale Notice
/Invitation for Tender -form (SI-14)/ Invitation for Tender -
SI-24, in the two leading form SI-24 is to be affixed on

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newspapers, out of which, the conspicuous part of the
one in vernacular language property to be sold/auctioned.
having sufficient circulation in  Publish Public Notice
the locality.
(Proclamation of Sale SI-
 There should be minimum 30 14)/ Invitation for Tender -
days gap (Expiry of 30 days) form SI-24 in the two leading
between the date of newspapers, out of which,
publication and the date of one in vernacular language
Auction or date of opening having sufficient circulation in
the tenders. the locality.
 There should be minimum 30
days gap (Expiry of 30 days)
between the date of
publication and the date of
Auction or date of opening

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the tenders.
• Sale through E- Auctions is to be conducted as per extant guidelines. In case of E-
Auctions, Sale Notice is to be compulsorily placed at (i) www.pnbindia.in (ii)
www.tenders.gov.in and (iii) www.pnbindia.biz for at-least 30 days in addition to

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publication in the newspapers. For adopting the mode to conduct auction e.g e-auction,
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manual auction etc. please refer to the latest guidelines issued by the recovery Division.

• If sale is by inviting tenders, as soon as publication is made in the newspaper, keep


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ready the Tender Form (SI-25) along with Annexure of Terms &Conditions which is to
be submitted by the Tenderer/Bidder duly signed with EMD in a sealed cover
accompanying a covering letter –Form-SI-26. Check up that there is no stay granted by
DRT/ Court/High Court. Court orders received at any stage are to be honoured.
Auction Process (Manual Tender Process
Auction)  Tenders be opened at the
 Auction be held at the place, place, time and on the day
time and on the day
On 121st/123rd
mentioned in Public Notice in
mentioned in Public Notice. the presence of bidders.
Day
 Earnest Money Deposit: Get  Recording of Tenders.
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All
EMD from the the Tenders received from
Participants/Bidders as individual bidders be
notified in the Public Notice recorded on the Bid- Sheet
(Generally 10% of the on the format SI-19. Each bid
reserve price). No bidder, be checked up that Terms
whose bid is below Reserve &Conditions Form (SI-25) of
Price, be allowed to Tender is duly accepted and
participate. signed by bidder and is
 Acceptance of Terms accompanied with EMD.
&Conditions by bidders-Form Take care that
SI -18 A. Before bidder/participant has not
commencement of bid, read changed any condition of
out terms of sale to bidders tender. Sort out the eligible
and obtain signatures in bids.
token of acceptance of these  As Terms & Conditions
terms and conditions. Form (SI-25) duly signed

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 Recording of Bids After have already been submitted
completing all the above there is no need to take Form
SI 18 A.
formalities, start inviting inter
se bids from the bidders. All However, before
the bids received from commencement of bid. read
individual bidders out Terms & Conditions of
be
sale to bidders.
recorded on the Bid- Sheet
 Recording of Bids: Decide
on the format SI-19.
the tenderer which has made
 When the auction reaches at
the highest bid.
the climax, where no bidder is
In case inter se bidding is
ready to increase the bid as contemplated as per terms of
against the highest bid tender terms, inter se bidding
received, the second highest from the bidders be called
bidder be asked whether he and these bids be recorded.
 Where no bidder is ready to
wants to increase the bid and

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on refusal , the fact be increase the bid as against
recorded and his signature the highest bid received, the
be obtained . Similarly, all second highest bidder be

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the bids received from asked whether he wants to
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individual bidders increase the bid and on
be
recorded on the Bid- Sheet refusal , the fact be recorded
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and his signature be
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(Form SI-19) and their


signatures be obtained . Similarly, all the
obtained.
Highest bidder be declared bids received from individual
as successful bidder. bidders be recorded on the
Initial deposit : The successful Bid- Sheet (Form SI-19) and
Highest Bidder is required to their signatures be obtained.
make initial deposit of 25% Highest bidder be declared
immediately of the bid /sale as successful bidder.
amount after adjusting the EMD.Initial deposit : The successful
Balance 75% is to be paid within
Highest Bidder is required to
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15 days. make initial deposit of 25%


immediately i.e as per Govt.
E-Auction notification dated 03.11.2016
Please refer to Recovery on the same day or not later
Division Circulars issued from than the next working day, of
time to time. the bid /sale amount after
adjusting the EMD. Balance 75%
is to be paid within 15 days of
confirmation of sale by secured
creditor or such extended
period as may be agreed upon
in writing between the
purchaser and the secured
creditor, in any case not
exceeding 3 months.

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 Get Bio-data of the Highest  Get Bio-data of the Highest Balance 75%
Bidder’s per format SI- 20. Bidder as per format SI- 20. amount by 136th/
 138th Day
 On getting initial deposit,  On getting initial deposit,
communication of acceptance communication of
of bid be given to the Highest acceptance of bid be given to
Bidder as per format-SI-21. the Highest Bidder as per
format-SI-21.
 In case of Immovable, Move
to Circle Office (Committee of  In case of Immovable, Move
Officers) immediately but not to Circle Office (Committee of
later than 15 days, to get Officers) immediately but not
confirmation of sale from later than 15 days, to get
them as a Secured Creditor. confirmation of sale from
And this confirmation of sale them as a Secured Creditor.

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be communicated to the And this confirmation of sale
Highest Bidder as per format- be communicated to the
SI-22. No confirmation of Highest Bidder as per
sale of Secured Creditor is
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format-SI-22. No
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required in case of sale of confirmation of sale of
movables. Secured Creditor is
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Execution of Agreement to required in case of sale of


Sell: be executed with the movables.
purchaser as per format SI-  Execution of Agreement to
23. Sell: be executed with the
 Balance bid amount of 75% is purchaser as per format SI-
received within time of 15 23.
days as per Terms  Balance bid amount of 75%
&Conditions of the auction. is received within time of 15
days as per Terms
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&Conditions of the Tender.

Certificate of sale be issued (when sale price is received in full and asset sold is delivered.)
Form SI-15/ or SI 16 for Movables and Form 17 for Immovables (revised forms attached
as Annexures in this Circular).
Appropriation of sale proceeds
• All the costs, charges and expenses incurred for Sarfaesi action which inter-alia include
postage, publication, watch & ward,

• insurance, godown charges, fees of supporting agency needs to be recovered.

• Care must be taken that sale expenses are to be appropriated first from the sale
proceeds. The balance proceeds of the sale be credited in the NPA account for
liquidation of Principal bank dues, then to interest as per Recovery Division HO Circular
no.26/2013 dated dated 04.06.2013.The residue/balance amount shall be paid to the
person entitled thereto.
***SARFAESI ACTION CONCLUDES***
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SARFAESI Act : CONSOLIDATION OF IMPORTANT ASPECTS:

1. DELEGATION OF POWERS TO INITIATE SARFAESI ACTION:

The Board, vide Resolution No. 36, passed in its meeting held on
26.06.2012, approved following revised guidelines:

“Incumbents Incharge (now Branch Heads) of the branches including LCBs,


irrespective of the Scale shall have full powers irrespective of amount of loan
outstanding, to permit for initiation of SARFAESI action and issue of Recall
Notices through SI-1 (Borrower) and SI-1A (Guarantor), given in the
SARFAESI Manual.

On taking administrative decision to initiate action under SARFAESI Act, the

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matter shall be referred to the competent/designated Authorized Officer by
submitting the note of approval (by Branch Head) on SI-2 (refer SARFAESI
Manual) along-with the Draft Notice under Section 13(2) of the Act, who then
shall issue the Notice under Section 13(2), maximum within 2 to 4 working

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days of date of slipping of an account to NPA category.
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In the branches headed by the Scale IV and above officers, including LCBs,
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the Branch Head in his capacity as designated Authorized Officer, shall
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himself take action under the SARFAESI Act on the basis of the proposal
prepared as per SI-2. However, they shall keep the respective Circle Head / ZM
informed. All actions under SARFAESI Act however shall continue to be
taken by such designated Authorized Officer.

2. AUTHORIZED OFFICER:

(i) The Security Interest (Enforcement) Rules 2002 provide that only “Authorized
Officers” can take various actions under the Act such as issue of demand notice,
25

taking possession of movable/immovable property, taking steps for sale of such


property etc. The Rule 2 (a) of the Security Interest (Enforcement) Rules
2002 defines the “Authorized Officer” as:

“An officer not less than a Chief Manager of a public sector bank or equivalent,
as specified by the Board of Directors or Board of Trustees of the secured
creditor or any other person or authority exercising powers of superintendence,
direction and control of the business or affairs of the secured creditor, as the
case may be, to exercise the rights of a secured creditor under the Ordinance”.

(ii) Accordingly, all officers in the rank of DGM/AGM/CM working in respective


branches and DGM/AGM/CM working in controlling offices for branches in
their jurisdiction other than DGM/AGM/CM branches be and do act as
Authorized Officer for the purpose of Act.

Circle Head may delegate the powers to act as Authorized Officer to Asstt.
Gen. Manager/Chief Manager of any branch in their jurisdiction for a cluster
of branches which are headed by Incumbents below the rank of Scale IV
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and their delegation shall be decided based on geographical location by
the Circle Head.

3 DEMAND NOTICE UNDER SECTION 13 (2) OF SARFAESI Act:

The first step toward initiation of SARFAESI action is to issue Demand Notice
u/s 13(2) of SARFAESI Act upon the borrower/s or guarantor/s and/or
mortgagors who have created security interest over the secured assets in
favor of the Bank.

As per the latest amendments made vide Govt. Notification dated 03.11.16, a
new Sub Rule (5) has been added in Rule 3 of the Security Interest
Enforcement Rules, 2002 as under:

“The Demand Notice may invite attention of the borrower to provisions of


sub section (8) of Section 13 of the SARFAESI Act, in respect of time

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available to the borrower, to redeem the secured assets.”

Thus, the dealing officials must ensure to comply with the above by incorporating

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the suitable clause in the 60 days notice under Section 13 (2) of SARFAESI Act
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in the above regard:
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For ready reference, modified formats SI-4 / SI-4A, after incorporating the above
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clause, are enclosed as Annexure 1 & 2.

4. SERVICE OF DEMAND NOTICE:

a. When a notice u/s 13(2) is issued, the most important aspect is that service of
the said notice is effected upon the concerned persons / obligants.

b. As per procedure prescribed under Rule 3 (1) of The Security Interest


(Enforcement) Rules, 2002, service of demand notice is to be made by
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delivering, or transmitting it, either by:

(i) Registered post with acknowledgement due, addressed to the borrower or


his agent empowered to accept the service OR
(ii) Speed Post OR
(iii) Courier OR
(iv) Hand Delivery (added vide Govt. Notification dated 03.11.16) OR
(v) Any other means of transmission of documents, like fax message or
electronic mail service.

c. For the completion of the first step of service of demand notice, and to thwart
borrowers’ tactics, there is need to ensure that these notices are:

 Addressed properly
 Sent on all the available addresses and
 More particularly at the most current addresses of the borrower / guarantor /
mortgagor
 Simultaneously by more than one mode i.e by Registered/Courier/E-mail etc.
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d Tracking of Messages/Notices sent by Registered Post / Speed post
Normally in the ordinary course of things, when notices are sent by Registered
Post/Speed Post (Acknowledgement Due), service of notices is effected within a
reasonable period of 7 days or so.

As per the past experience it has been observed that branches continue to hold
on further SARFAESI Action, waiting for receipt of Acknowledgments/Return of
undelivered notices /or report of concerned Post Office, resultantly, SARFAESI
Action is delayed. The situation is aggravated on account of the fact that
branches are not clear what further course of action needs to be adopted due to
non-receipt of service report from Postal Department. It is, therefore, advisable
that instead of waiting for receipt of Acknowledgements /undelivered notices
/service report from the Post Office, the field functionaries can track service of
these notices from the Website of Indian Post of the Govt. of India.

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The steps for tracking delivery of the notices sent by Registered / Speed Post are
enclosed as Annexure 3.

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e. Tracking of Messages/Notices sent by Electronic Mail Service (E-mail)
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As per Rule 3 of Security Interest Enforcement Rules 2002, the Demand
Notice can also be sent through Electronic Mail Service (E-Mail). Therefore
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wherever E-mail addresses of the obligants are available, it is advisable to send
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Notice under Section 13(2) to them by E-Mail also.

In order to prove that Sec. 13(2) notices were sent through email, the branch
needs to take out a print of e-mail as sent to the respective obligant and keep it in
the file for record purposes..

Further, in case Read Receipt/ Delivery Receipt message stands already


activated on the E-mail of the Sender/Branch, a print out of the Read Receipt/
Delivery Receipt message be also taken which would be the most important
25

document to prove in the court of law that such a notice sent by e-mail and was
duly delivered to the recipient/borrower/obligants.

To activate the Read Receipt/ Delivery Receipt message, the branches need to
follow the following procedure or take help of IT Official at Circle Offices.
However, for ready reference, procedure has been incorporated in Annexure 4.
f. Substituted service of 13 (2) notice by affixation & publication: Proviso to
Rule 3 of Security Interest (Enforcement) Rules 2002 inter-alia provides that
where Authorized Officer has reason to believe that the borrower or his agent is
avoiding the service of notice or that for any other reason, service cannot be
made as aforesaid, the service shall be effected by affixing a copy of demand
notice on the outer door or some other conspicuous part of the house or building
in which the borrower or his agent ordinarily resides or carries on business or
personally works for gain and also by publishing the contents of the demand
notice in two leading newspapers one in vernacular language having sufficient
circulation in that locality.

12
5. REPLY TO BORROWER’S REPRESENTATION / OBJECTIONS UNDER
SECTION 13 (3A) OF SARFAESI ACT
When Demand Notice u/s 13(2) of SARFAESI Act is served upon the borrower/s
or guarantor/s and/or mortgagors, they may make a representation/ raise
objections in writing in response to the Demand Notice under Section 13(2) of
SAEFAESI Act issued by the Bank.

If, on receipt of the demand notice, the borrower/s or guarantor/s and/or


mortgagors make representation or raise any objection, the secured creditor is
required to consider such representation in terms of provisions of Section 13 (3A)
of SARFAESI Act, and if the secured creditor comes to the conclusion that such
representation/ objections are not acceptable or tenable, the reasons for non
acceptance shall be communicated to the borrower/guarantor/mortgagor/objector
within 15 days of receipt of such representation/ objections by the secured
creditor.

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It is desirable that field functionaries should act promptly for giving reply to the
representation/objections within Time Line mentioned in the SARFAESI Act-Work

16
Flow without for waiting for mandatory period of 15 days
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It be noted that delay caused beyond 15 days for reply to such
18
representation/objections would give a ground to the borrowers to challenge and
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frustrate SARFAESI action of the Bank in the DRT/Court. It is, therefore desirable
that the objections raised be carefully examined and Bank’s stand in respect of
the objections raised should be communicated to the
borrower/guarantor/mortgagor/objector within mandatory period. The reply of the
Bank should not be a routine reply without application of mind but it should be
reasoned reply giving reasons for non acceptance of the objections raised by
them. The rejection/reply should be meaningful and not just a ritual rejection.

The branches without wasting time should submit point-wise comments to the
25

Authorized Officer and finalize the reply. In the accounts where heavy stakes
of the bank are involved, the reply prepared may be got vetted from the
Law Officer/Manager Law posted at the Circle/ZO, if necessary. Duly vetted
reply be sent under the signature of Authorized Officer of the Bank.
Nevertheless, vetting should not be taken as a pretext to cross the Time Line
prescribed for by the Bank.

Considering the hardships the field functionaries may face in this behalf, a
gist of possible objections and guidance for preparing suitable reply is
provided in Annexure 5.

6. POSSESSION OF SECURED ASSETS

i Pre-possession Survey
Before proceeding for taking possession, pre-possession survey of concerned
properties be made to ascertain present status and verify details of the same.
The concerned officials should visit the site with supporting agency (if engaged)
in four wheeler with banners of Bank.
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ii Symbolic Possession of Secured Assets
Although well defined guidelines pertaining to, taking possession of secured
assets are mentioned in the SARFAESI Manual, it has been observed that
Authorized Officers are not very clear about taking symbolic possession of the
properties and it is imperative that the field functionaries realize its effectiveness.
The important guidelines in this respect are reiterated for ready reference and to
enable the field staff to use it as an enduring tool. It is pertinent to mention that
Symbolic Possession is recognized under Law.

 Where immovable property is in occupancy of the


borrower/guarantor/mortgagor or some other person on his behalf or with
person/s claiming under a title created, subsequent to mortgage in favour of
the bank, the secured creditor is entitled to get vacant possession and if

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possession is not willingly given, to remove such person who refuses to
vacate the same. Hence keeping in view the circumstances, if vacant
possession cannot be immediately obtained, possession notice, be got
affixed on the property and a copy thereof be also given (by hand or

16
post) to the borrower/guarantor/mortgagor, as the case may be. Such a
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possession is termed as Symbolic Possession. In symbolic possession, the
actual physical possession remains with the owner/occupant as the case may
18
be and still bank can either move the court of the DM/CMM for getting
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physical possession or can sell the property on “as is where is basis”.

 In case occupancy of the property by a tenant or any other person is legal


and the immovable property is put to sale, the possession that can be given
to the purchaser is only by symbolic possession by affixing a copy of the
Certificate of Sale on some conspicuous place of the property and
proclaiming to the occupants by beat of drum or other customary modes
that the interest of the borrower/guarantor/mortgagor has been transferred to
the purchaser.
25

Thus, in all such cases where physical possession is either not immediately
possible or not being immediately resorted to, symbolic possession is a good
option available with the bank to put pressure on the defaulters and for
affecting recoveries thereof.
iii Physical Possession of secured Assets
It is easy to sell secured assets which are under physical possession of Bank.
Further, secured assets, which are under physical possession of the Bank, fetch
better price also. As such endeavor be made to take physical possession of
maximum properties charged / mortgaged to Bank.

Keeping the above in view, upon expiry of 60 days period of notice issued under
Section 13 (2) of SARFAESI Act, application be invariably filed with DM / CMM to
take physical possession simultaneously with issuance of 13 (4) notice.

iv. Sending of notice to borrower enclosing Panchnama


As per new sub-rule 2A added in Rule 4 of Security Interest Enforcement
Rules, 2002 vide Notification dated 03.11.2016, the borrower is to be intimated
14
by a notice enclosing the Panchnama & inventory. Further, vide Notification
dated 03.11.2016, following words have been added after first para of format of
Panchnama:

“The borrower’s attention is invited to provisions of sub-section (8) of


section 13 of the Act, in respect of time available to redeem the secured
assets.”

It is further provided that all the notices may be served upon the borrower
through electronic mode of service, in addition to mode provided under Rule 3 of
Security Interest Enforcement Rules, 2002 (mentioned in para 4 above).

Format for issuing notice to borrower, along with modified formats of


Panchnama (SI-7A, SI-7B, SI-7C & SI-D) are enclosed as Annexures 6, 7, 8
& 9.

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7 FIXATION OF RESERVE PRICE:

7.1 Formation of Committees For Fixation of Reserve Price

16
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(a) As the Authorized Officer may need guidance/ support for effective utilization of
mechanism of SARFAESI, the Committee of officers is constituted at Circle
18
Office/LCB to extend the guidance and support to the Authorized Officer for
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action taken under SARFAESI Act. The Committee at Circle Office shall
approve the Reserve Price based on recommendations of Authorized
Officer, valuation report from an approved valuer and other attendant
factors to arrive at a realistic Reserve Price. However, the Committee at
LCB shall refer and recommend the Reserve Price to ZM for approval.

(b) The structure of committee constituted for the enforcement of Security Interest
under SARFAESI Act 2002, shall be as under:
25

Circle Office Committee for Enforcement of Committee at LCB


Security Interest (COCESI)
Head of Circle Office (Chairperson) Head of branch
Deputy Circle Head Second in command
Chief Manager/Senior Manager, Recovery Section Relationship/Dealing
of Circle Office Manager
Senior Manager (Law)/ Manager (Law),if posted
The Committee shall extend the guidance and support to the Authorized Officer
for effective utilization of mechanism of SARFAESI. The Committee at LCB
shall refer & recommend the fixation of Reserve Price and other warranted
matters to ZM for approval.

(c) To take stock of the actions taken by the Authorized Officer, ‘Monthly Review
Meetings’ shall be convened by the committees at Circle Office/Branch
Office for LCB level.

15
(d) Though, the Large Corporate Branches (LCBs) are directly reporting to Head
Office, it has been decided that, for the purpose of enforcement of provisions
of SARFAESI Act (Sale/ transfer of Asset to ARCs as well as Enforcement
of Security Interest), the LCBs / their Authorized Officials, shall forward
such matters to the Zonal Manager (ZM) for consideration.

7.2 Delegation of Powers to give concurrence in fixing Reserve Price:

(a) In terms of the Rule 5 and 8(5) of the Security Interest (Enforcement) Rules
2002, before sale of movable secured assets, the authorized officer has to obtain
the estimated value of the same, whereas, in case of immovable secured assets,
the valuation of property has to be obtained from a Board approved valuer.

Presently as per extant guidelines, there exists only one panel of valuers
(both for Plant & Machinery, immovable properties etc.), which is approved
by the Board of Directors.

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Fixing of reserve price is an important and sensitive issue in the process of
enforcement of security interest. It is therefore desirable that Authorized Officer

16
shall seek approval from the Committee at Circle Office and in case of LCB from
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the ZM.
18
(b) The powers for approval of Reserve Price shall be vested with Committee at
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Circle Office (COCESI) and in case of LCB with Zonal Manager (ZM) as under:

COCESI / ZM Full Powers

7.3 Guidelines for fixing Reserve Price


(a) For Enforcement of Security Interest under the SARFAESI Act 2002, valuation of
secured assets is required. The objective of valuation is essentially to arrive at
the fair market value of the asset and to provide a basis for sale of the asset
25

through auction or otherwise. Guidelines to arrive at the realizable value of


the security (ies)/ properties and/or fixing the reserve price are as under:

(b) In order to arrive at realizable value of security/property and/or fixing the Reserve
Price, the valuation report in respect of movable/immoveable properties shall be
obtained from a valuer approved by the Board.

(c) The valuation report relied upon by the Authorized Officer/ Committee/ ZM
should normally not be more than a year old.

(d) The Reserve price shall be fixed on the basis of market/realizable value of
underlying assets as assessed by the approved valuer and taking cognizance of
other attendant factors like multiple suits/tenancy, I.P. not demarcated,
attachment by the Government authorities and other warranted factors etc.

(e) The committee at Circle Office shall be the approving authority for the
reserve price as recommended by the Authorized Officer. In case of LCB,

16
the ZM shall be approving authority of the reserve price as recommended
by the Committee at LCB.

(f) The COCESI / ZM, while fixing the reserve price may also fix the period
(maximum six months) within which the sale of the secured asset should be
conducted. If the sale does not take place within the period fixed by the COCESI
/ ZM, if need be, the matter will again be referred by Authorized Officer/LCB to
the COCESI / ZM for their concurrence.

(g) If due to non-response of bidders, fall in the price etc., the reserve price is
to be downwardly revised, then concurrence for revision in reserve price
shall be sought again from the COCESI and in case of LCB from ZM.

8. SALE OF SECURED ASSETS:


In terms of second schedule to Income Tax Act 1961, sale is prohibited on
holidays.

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i Modes of sale of movable as well as immovable secured assets
In terms of Rule 6 (1) & 8 (5) of Security Interest (Enforcement) Rules, 2002, the

16
movable as well as immovable secured assets can be sold by any of the
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following methods:
18
(a) By obtaining quotations from the parties / persons dealing with similar
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secured assets or otherwise interested in buying the such assets; or


(b) By inviting tenders from the public; or
(c) By holding public auction including e-auction mode; or
(d) By private treaty

ii Sale notice

(a) Before effecting sale (save and except in case of movable property subject to
speedy or natural decay or expense for custody exceeds its value), the
25

borrower shall be given 30 days’ notice for the intended sale as per SI–13 of
SARFAESI Manual.

(b) If the sale is to be effected either by inviting tenders from the public or by
holding public auction, the ‘Authorized Officer’ shall also cause a public notice
published in two leading newspapers, one of which should be in vernacular
language, having sufficient circulation in the locality.

(c) In case of sale of an immovable property:

 Notice of sale shall also be affixed on a conspicuous part of the


property, and shall also be put on the website of the Bank.
 No sale in first instance shall take place before the expiry of 30 days
from the date on which the public notice of sale is published in
newspapers or notice of sale has been served to the borrower.
 There must be gap of at least 30 days between the date of publication
of public notice of sale and auction / sale date.

17
(d) As per the latest amendments made under Security Interest (Enforcement)
Rules, 2002 vide Notification dated 03.11.2016, if sale of movable /
immovable property by any one of the methods mentioned in para 8 (i)
above fails, and the sale is required to be conducted again, the
Authorized Officer has to serve, affix and publish notice of sale of not
less than 15 days to the borrower, for any subsequent sale.

(e) As per the latest amendments made under Security Interest (Enforcement)
Rules, 2002 vide Notification dated 03.11.2016, sale by any method other
than public auction or public tender shall be on such terms as settled
between the secured creditor and proposed purchaser.

iii. Sale of Immovable Assets

(a) Time period for payment of 25% of the amount of sale


Rule 9(3) of the Security Interest (Enforcement) Rules, 2002 has been

:46
amended vide Govt. Notification dated 03.11.16 and states that:

“On every sale of immovable property, the purchaser shall immediately i.e on

16
the same day or not later than next working day, as the case may be, pay a
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deposit of twenty five percent of the amount of the sale price, which is
inclusive of earnest money deposited, if any, to the Authorized Officer
18
conducting the sale and in default of such deposit, the property shall be sold
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again.”

(b) Time period for payment of balance amount:


Amendments have been made by the Govt. of India in Rule 9(4) of the Security
Interest (Enforcement) Rules, 2002 and the revised Rule 9(4) provides that:

“The balance amount (i.e 75%) of the purchase price payable shall be paid by
the purchaser to the Authorized Officer on or before the fifteenth day from date
of confirmation of sale of the immovable property or such extended period as
25

may be agreed upon in writing between the purchaser and the secured
creditor, in any case not exceeding three months”.

(c) Forfeiture of deposit amount


Following amendments have been made in Rule 9(5) of the Security Interest
(Enforcement) Rules, 2002, and the revised guidelines are given below:

“In default of payment within the period mentioned in sub rule (4), the deposit
shall be forfeited to the secured creditor and the property shall be resold and
the defaulting purchaser shall forfeit all claims to the property or to any part of the
sum for which it may be subsequently sold.

(d) Confirmation of Sale & Issue of Sale Certificate:


On payment of initial deposit i.e. 25% of sale consideration, the sale shall
be confirmed. Confirmation of sale shall be recorded and conveyed to the
highest bidder. The steps needs to be taken immediately for getting the sale
confirmed from the secured creditor i.e. Committee of Officers and
confirmation be conveyed to the highest bidder. Draft of recording of
18
confirmation of sale is given in Appendix B- Form SI – 22 of SARFAESI
Manual.

In terms of the Rules as notified, confirmation of sale is necessary only in


respect of sale of immovable assets. Sale of immovable property is to be got
confirmed (Form SI-22 of SARFAESI Manual) by the Authorized Officer from
the Secured Creditor i.e Committee of Officers (constitution of the
committee is given in the following paras). Further, in terms of Rule 9 (6) of
Security Interest (Enforcement), 2002:
“On confirmation of sale by the secured creditor (Committee of Officers) and if
the terms of payment have been complied with, the Authorized Officer
exercising the power of sale shall issue a “Certificate of Sale” of the
immovable property in favour of the purchaser.” (Form SI-17 of the SARFAESI
Manual)

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(e) Non Confirmation of sale by Secured Creditor
In case it is found by the Committee of Officers that sale is not to be confirmed,
the reasons for not confirming the sale be recorded in the minutes of the meeting
and should be immediately conveyed to the purchaser and initial deposit be
returned.
16
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iv. Sale of Movable Assets- Payment of Sale Consideration, Confirmation of
18
Sale & Issue of Sale Certificate:
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In case of sale of movable secured assets, the sale price shall be paid as per
the terms of public notice or on the terms settled between the parties, as the
case may be, and in the event of default of payment , the movable secured
assets shall be liable to be ordered for sale again.

In case of sale of movable assets, wherever it is found inconvenient, the


procedure of confirmation of sale by the Authorized Officer/ Secured
Creditor (i.e Committee of Officers) may be dispensed with/may not be
followed, as in case of movable assets, sale confirmation is not required.
25

Further, in case of sale of movable assets, on payment of full sale price,


Authorized Officer shall issue “Certificate of Sale” (Form SI-15 of the
SARFAESI Manual). Certificate of Sale may attract stamp duty. If the purchaser
does not insist for a Certificate of Sale, he can be given a receipt (see Form SI –
16 of the SARFAESI Manual) for the sale price received.

v. Committee of Officers for Confirmation of Sale:


Further, for exercising the rights of Secured creditor under the SARFAESI Act (in
the past circulated vide Recovery Division Circular No. 25/2010 dated
13.07.2010); “Committee of Officers” to be constituted at the Circle
Office/LCB, details of which are given below:
S.No. Particulars Committee To Members of Committee
Confirm the Sale
1. For Branches COCESI (Circle 1. Circle Head (Chairperson)
other than Office Committee
LCBs for Enforcement of 2. Second in command at Circle Office
Security Interest) 3. Chief Manager/Sr. Manager
(Recovery Section) of Circle Office
19
4. Sr. Manager (Law)/Manager (Law) if
posted
2. For LCBs Committee at LCB 1. Head of the LCB
for enforcement of 2.Second in Command
Security Interest 3.Realtionship / Dealing Manager

The above mentioned Committees will confirm the sale of secured assets
(compulsorily for immovable property), in the capacity of secured creditor.

vi. Sale through E-auctions of properties- Incorporation of details in


advertisements- Govt. of India guidelines.

9. COMMON DISCREPANCIES / IMPORTANT ASPECTS RELATED TO SALE


OF SECURED ASSETS:

:46
9.1 Recently, some instances have come to the notice that, in the Sale notices
(published in the Newspapers and/or in the Notices uploaded at the Portal of the
Service Provider for E-Auction for sale of immovable properties), instead of

16
mentioning that “sale is to be confirmed by the Secured Creditor”, it was
wrongly mentioned that “sale is to be confirmed by the Authorized Officer”.
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In this regard, provisions of Rule 9(2) of The Security Interest
18
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(Enforcement) Rules, 2002, provide as under:

“The sale shall be confirmed in favour of the purchaser who has offered the
highest sale price in his bid or tender or quotation or offer to the authorized
officer and shall be subject to confirmation by the secured creditor.”

Provided that no sale under this Rule shall be confirmed, if the amount
offered by sale price is less than the Reserve Price, specified under Rule 8
(5).
25

In view of the above, it is imperative that mandatory provisions of the


SARFAESI Act read with Rules are complied with meticulously and all
concerned are requested to ensure that-

a) While publishing the Sale Notices and uploading them at the E-Auction sites/
Bank’s website / Govt website (tenders.gov.in) etc., there is no variation in the
nomenclature used and regarding confirmation of sale, it is invariably
mentioned that “Sale would be subject to confirmation by the secured
creditor”.

b) However, where in a particular account, there are both movable and


immovable assets and common procedure is adopted for sale thereof
then it must be ensured to incorporate in the sale proclamation/Public
Notices/ advertisements in the newspapers etc. that “Sale is to be
confirmed by the Secured Creditor”. Thus in such cases, the sale will be
confirmed by the Secured creditor i.e Committee of Officers.

20
9.2 Important Note- Bidding at more than Reserve Price
Further, Rule 9 (2) provides that sale shall be confirmed in favor of the purchaser
who has offered the highest sale price in his bid or tender or quotation of offer to
the Authorized Officer and shall be subject confirmation by the secured creditor:

Provided that no sale under this rule shall be confirmed , if the amount offered
by sale price is less than the reserve price, specified under sub rule (5) of
rule 9;

Provided further that if the authorized officers fails to obtain a price higher
than the reserve price, he may, with the consent of the borrower and the
secured creditor can effect the sale at such price.

Keeping the above provisions in view, Law Division, HO has opined that
though technically, a bidder can start bidding at reserve price, however, as
the sale at reserve price can be effected with the consent of borrower only,

:46
the first bidding should start at any amount higher than reserve price.
Keeping the above in view, necessary utilities have been incorporated in E-
auction Portal of Bank (refer Para 2 of Recovery Division Circular No.
29/2015 dated 02.11.2015)
16
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10. PROCEDURE FOR KEEPING ENFORCEMENT OF SARFAESI ACTION IN
18
ABEYANCE
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10.1 As per provisions of the Securitisation and Reconstruction of Financial Assets


and Enforcement of Security Interest Act 2002, the Bank, in an eligible NPA
account, may require the defaulting borrower, by notice in writing under Section
13(2) of the Act, to discharge his liabilities in full to the Bank within 60 days of the
date of notice.

10.2 There may arise one of the following eventualities after demand notice
under Section 13(2) of the Act is issued to the borrower/mortgagor:
25

(i) The account is fully adjusted, or


(ii) The party/ies remedy the default and request for continuation of credit
facilities; and this request is acceded to by the Bank, or

(iii) The party/ies enter into a compromise with the Bank and the compromise
amount is to be deposited within a time frame or there may be certain
reason/s at any stage, the competent authority deems fit to hold on
SARFAESI action.

10.3 The SARFAESI action can be kept in abeyance for a further period not
exceeding 60 days in case of OTS or any other reason at any stage if the
competent authority deems fit and reason/s thereof are kept on records.

10.4 The powers to hold on SARFAESI action vests with the authority which has
permitted for the initiation of SARFAESI action.

21
10.5 Further it is to be ensured that the deferment of SARFAESI action is not used by
the borrower/ co-obligants as a time gaining tool.

10.6 To obviate such eventualities and to enable the Bank to resume the process of
enforcement of security interest from the point where it was kept on hold, it is
considered necessary to get a supplementary agreement executed by the
borrower/s and to also obtain a letter of consent from the guarantor/s at the time
of entering into OTS or other reasons acceptable to bank. The format of draft of
agreement and consent letter approved by HO, Law Division is given as
Annexure-10-A/ 10-A-1/10-B/10-B-1.
11. PUBLICATION UNDER SARFAESI ACT:

11.1 Under SARFAESI Act and Rules, the publication in the newspapers, as stated
above, is a must and cannot be avoided. The cost of publication is as per the
rates prescribed by the newspaper publishers. Any expenditure incurred on
publication is a necessary expenditure and it is appropriate to deem incurrence of

:46
such expenditure as approved, in the matters where sanction for action under
SARFAESI Act is given.

11.2
16
Vide Board Resolution No.30 dated 5.9.2006 that the powers delegated
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interalia provide for sanction under SARFAESI Act implies incurring expenditure
in full in respect of publication effected for substituted service, taking possession,
18
and proclamation of sale/sale notice as per provisions of SARFAESI Act and
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Security Interest (Enforcement) Rules 2002.”

11.3 The expenses incurred for publication under SARFAESI Act shall be
debited under the head “Law charges” and shall recorded in memoranda
dues for record and recovery from the sale proceeds of secured assets.

12. HYPOTHECATED BOOK DEBTS – ENFORCEMENT OF SECURITY


INTEREST UNDER SARFAESI ACT
25

12.1 The SARFAESI Act, 2002 confers the powers with the secured creditor (Bank) to
enforce the security interest without intervention of the Courts or Tribunals. The
Bank has been taking recourse to the provisions of the SARFAESI Act for
recovery of the Non Performing Assets by enforcing security interest in respect of
Movable / Hypothecated securities, such as Plant & Machinery, Vehicles etc.
besides Immovable Assets such as Land& Building etc.

12.2 However, the provisions of SARFAESI Act empowering the Bank for enforcing
security interest in respect of Book Debts, Receivables, Share in a Body
Corporate and such other movable properties not in possession of the borrower
still remain legally untapped to a large extent.

12.3 Somehow, a misplaced view has got developed that the movable securities, such
as Book Debts / Receivables etc. are not eligible / are not possible to be
enforced under SARFAESI on the ill conceived perceptions that it is not possible
to lay hands on these securities. The experience has shown that the branches
are reluctant to exercise our rights under the loan / security documents
executed by the borrower. When such inactions are questioned, usually the
22
branches come out with alibis that addresses of the debtors are not available to
serve notices on the debtors of the borrower.

12.4 Since such debtors form the primary security against which Bank’s exposure was
/ is secured, it is of paramount importance to enforce the security interest on
such debtors either by way of SARFAESI Act or through DRTs for realization of
our dues. If we fail to enforce our rights, it is quite possible that the recalcitrant
borrowers may realize such debtors either to pay off their pressing unsecured
creditors and / or to siphon off such amounts thereby reducing the chance of
realizability of our securities. Some of such debtors may be persons / corporate
bodies of repute and in some cases such debtors may be PSUs or Govt.
Departments and / or allied / associate concerns of the borrowers.

12.5 It is noted that in respect of Cash Credit (Book Debt) facility, the Hypothecation
Agreements obtained (PNB- 516), mandates the Bank to claim the amount of
debtors directly and Bank is authorized to act as the Power of Attorney Holder of

:46
the Borrower and / or to appoint Receivers or to make demands to the debtors
and to collect money from them.

16
Similarly SARFAESI Act empowers for enforcement of security interest in respect
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of:
a) a debt not secured by negotiable instrument;
18
b) a share in the body corporate;
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c) other movable property not in possession of the borrower.

12.6 Thus, SARFAESI Act empowers the authorized officer to obtain possession or
recover the debt by service of notice
 prohibiting the borrower from recovering the debt or any interest thereon,
and

 prohibiting the debtor from making payment thereof to the borrower


25

and
 directing the debtor to make such payment to the Authorized Officer.

(Sections 13(4)(d), & 13(5) further provide that any payment made to the
secured creditor shall give such person a valid discharge as if the
payment is made to the borrower).

12.7. In view of the above provisions, the following procedure be adopted for
enforcement of security interest in respect of Book Debt:

STEPS:
i. Demand Notice under Section 13(2) of SARFAESI Act, be served on the
Borrower as per the prescribed format (SI-4 of Manual). The Notice must
state that Bank, inter-alia, would also enforce its security interest in
respect of hypothecated / charged Book-Debts.

23
ii. If the Borrower fails to discharge its liability within 60 days, notice as per
the Format SI-28 of SARFAESI Manual 2008 be served on the Borrower
as well on each of the debtors prohibiting and restraining the Borrower
from recovering the debt or any interest thereon from the debtor and the
debtor from making the payment to the Borrower and directing the debtor
to make such payment to the Authorized Officer.

In all the above notices, it shall be specifically stated that


noncompliance of the directions, as communicated in the notice,
shall be contravention of the Security Interest (Enforcement) Rules,
2002, and any contravention of the Rules is an offence in terms of
Section 29 of the Act.

iii. In case list of the Debtors and their addresses are not available, Notice be
served on the borrower to furnish list of the debtors along with their
complete addresses as per (Annexure-11). In the meanwhile, notices

:46
may be sent to the debtors whose addresses are available on Format
SI-28 (Manual).

iv.
16
In the event, the Bank does not have a complete list of the debtors and
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their addresses and borrower is not cooperating, Public Notice in the
News Paper may be given as per the Model Draft (Annexure-12). This
18
is to be suitably modified as per the facts of the particular account.
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v. In case, it comes to the notice that borrower has received payment of


Debts, after service of Demand Notice, Criminal Complaint may be
filed u/s 29 of SARFAESI Act before the Metropolitan Magistrate or a
Judicial Magistrate of First Class.

12.8 Besides the above steps, for enforcement of security interest under SARFAESI,
the following steps be taken for recovery of dues through DRT.
25

(i). Suit for Recovery / Original application be filed in Debt Recovery Tribunal
in terms of Model Draft of the plaint circulated vide Law Division Circular
No. 16/Law/2013 dated 06.08.2013.

(ii). An application be moved for production of register for inspection


and for furnishing the extracts from the register by the borrower
before the court, in which they have recorded the details about the
hypothecated book debts.

(iii). An application can be moved, directing the borrower to produce all


account books and other relevant evidence for inspection to verify the
correctness of the entries made in the said register with reference to any
statement / return required to be furnished / being furnished.

(iv). After getting the list of debtors along with the respective amount due from
them, an application be made for directing the debtors to deposit the
respective amount before the court so that the said amount can be

24
appropriated towards the dues of the Bank, with the permission of the
court.

(v). The aforesaid interim relief if granted by the court, be got published
in the local newspaper so that the affected parties (debtors) are
aware of the court’s order.

(vi). It is advisable to have complete details and addresses of the major


debtors of the party and they can be made parties in the recovery suit
at the time of filing of the suit itself and prayers can be made for suitable
interim directions to such debtors for settling their debts directly by
depositing such dues with the Bank / Court / Tribunal.

(vii). Move an application for appointment of receiver with power to collect the
money from the debtors / third parties.

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13. NPA ACCOUNTS UNDER MULTIPLE / CONSORTIUM LENDING:
In case of financing by more than one secured creditor (Multiple Banking) or
joint financing by several Secured creditors (consortium advances), SARFAESI

16
Act vide Section 13(9) lays down that no Secured creditor shall be entitled to
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exercise any or all of the rights as conferred by Section 13(4) of the Act, unless
exercise of such rights is agreed upon by Secured creditors representing 60% in
18
value.
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13.1 As a prudent measure it is always desirable that the Leader Bank initiates action
under SARFAESI Act on behalf of all the consortium members. However,
seeking consent from all the fellow members consumes much of the valued time,
thus delaying the action under the Act.

13.2 While dealing with NPA accounts of High Value, it has been observed that at
times there are more than one consortium e.g one consortium of Term Lenders
and another consortium for Working Capital Lenders. Similarly it has been
25

observed that at times the securities are also cross-charged and interlinked with
different consortiums/lenders and across other Associated & Allied concerns of
the same Group.

13.3 In such situations, generally in the absence of a common meeting ground,


absence of consensus among various lenders/group of lenders, a joint approach
towards recovery does not get developed and such situations are exploited by
such recalcitrant borrowers to their advantage and Lenders come to a
disadvantageous position to enforce their securities.

13.4 These issues have come up for discussions at various platforms and it has been
suggested that recovery in such accounts be pursued as a joint and common
approach by the Leader of all Lenders by developing a common consensus
among all lenders/group of lenders.

13.5 In pursuit to the above, the following measures be taken by our Branches/Circle
Heads/ZMs in such accounts in NPA category:

25
13.6 Immediately after an account becomes NPA, as a proactive measure, the
Branches irrespective of our share in the lending should press for convening the
Consortium/Joint Lenders Meet even in cases where we may not be the leader
and/or formal consortium may not exist like in case of Multiple Banking. Where
ever we are the leader and/or major shareholder, Branches should suo-motto
convene such meetings, with a view to discuss ways and means of bringing back
the Account to normalcy and/or taking further recovery measures.”

13.7 In case of large consortiums/multiple consortiums/cross charging of securities in


Associated & Allied concerns/Multiple Banking etc a Core Committee of 4-5
Banks be formed to handle day to day affairs and to develop a common
consensus/approach towards recovery and a leader be elected for this
Core Committee. This Core Committee should meet more frequently to review
the progress and the action points viz. Restructuring/CDR, SARFAESI Action,
Filing Recovery Suit with DRT, exploring negotiated settlement, declaring them
as Wilful Defaulters, filing of FIRs/Criminal complaints declaring the account as

:46
Fraud, be specifically implemented/got implemented in a time bound manner.

13.8 Obviously once Recovery measures are to be initiated there has to be consensus

16
among all lenders, pertaining to common cutoff date, valuation of securities,
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fixing Reserve Price, on the sharing pattern of the realizations, Distribution
among 1st and 2nd charge holders and other subordinate charge holders etc.
18
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13.9 Before giving our consent to support such Recovery Measures, a prior
mandate from the competent authority is mandatory and is of great
importance to quicken the pace of Recoveries.

Needless to say that in NPA accounts with outstanding balance of Rs. 50


lacs and above, the competent monitoring authority lies at Head Office
Recovery Division.

13.10 For taking SARFAESI Action in all such accounts, the leader bank be
25

authorized by all the member banks for taking all actions for recovery of
dues of all consortium members as prescribed in the Act. The leader has to
take all actions for and on behalf of all member banks in accordance with
the provisions of the SARFAESI Act.

It is clarified that recording/minutising of such consent/mandate by the


representatives of lenders in such Consortium/Joint Lenders’ Meetings should be
treated as enough and separate mandates normally need not be insisted upon.
For this purpose it shall be important that Agenda is circulated well in advance
and the representatives of various lenders obtain proper mandate from their
competent authorities, permitting to attend the meeting.

13.11 Thus it is advised that in all Consortium/Multiple Banking advances under


NPA category, the branches shall submit their consent to the respective
Leaders for initiating action under the SARFAESI Act against the defaulting
borrowers and to obviate the possibility of delay in the matter, need not
wait for any communication from the Leader. Similarly where PNB is the
Leader, such consent for the joint action under the Act shall be sought
26
from all the members avoiding any delay on this count. For this purpose,
the branches need not make any reference to the Circle Head/ZM/HO to
take approval of giving/seeking consent.

13.12 Further, such consent for exercise of powers should be given in such a manner
that it confers consent for exercise of powers jointly and severally and while
giving such consent, it be explicitly stated that matters relating to acceptance of
valuation, fixation of Reserve Price and confirmation of sale and distribution of
proceeds etc. is subject to decision of the Consortium (as explained above).

13.13 The above instructions/suggestions do not apply to the securities, if any,


exclusively charged to us, where independent action is to be initiated without any
reference to the Consortium/JLM.

13.14 All other guidelines contained in the Chapter-XI-Consortium


Advances/Joint Financing of Bank’s Manual on ‘Enforcement of Security

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Interest’ (also known as SARFAESI Manual), continue to remain unchanged
and are to be meticulously followed.

16
13.15 These guidelines shall apply to all such joint advances irrespective of the fact
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whether PNB is the Leader or some other Bank is the Leader. Representatives of
the Bank attending the Joint Lenders Meet may specifically note these guidelines
18
and put forth their suggestions/views effectively in accordance with the above
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guidelines.

Circle Heads/ZMs shall monitor all such cases, so as to ensure that SARFAESI
tool is effectively used in such High Value NPA accounts.

14. STRATEGIES FOR SUCCESSFUL SALE PROCESS UNDER SARFEASI ACT


– IMPORTANT ASPECTS
Under the SARFAESI Act when we go for sale of secured assets, the aim is to
secure maximum price for the assets to be sold. Over a period of time it has
25

become a proven fact that the most transparent and effective methods of sale of
the secured assets are:
 Public Auction including auction through e-auction mode and
 Inviting Tenders
However, experience has revealed that in large number of cases the sale efforts
are thwarted on account of non-receipt of bids or buyers offering sale price
not commensurate with the Market Value/Reserve Price. In pursuit of free,
fair and transparent auctions Ministry of Finance directed the Banks to
adopt the Electronic medium for conducting auctions also known by the
name “E-Auctions”. However, to improve the success rate of even e-
auctions, we need to initiate certain steps, which are given below:

14.1. Valuation of secured assets


Valuation of securities is an important and sensitive issue in the process of
enforcement of security interest, as it forms the base for fixation of Reserve
Price, before proceeding for sale. Valuation Report relied upon should

27
normally be not more than a year old. Branch Incumbent, besides relying upon
the Valuation Report submitted by the Valuer(s), as per extant guidelines,
should involve him/herself in the process and make discreet enquiries from
the Property Dealers/Real Estate Agents/Residents of that area etc. so that
a fair assessment may be made, before fixing the Reserve Price.

14.2. Fixation of Reserve Price


This is the most important factor to decide the success rate of E-Auctions. A
realistic Reserve Price will always improve the chances of successful sale
process. Reserve Price needs to be fixed by taking into cognizance, various
factors e.g location of the property, multiple tenancy, IPs not demarcated, various
Government obligations/litigations/attachments etc. Thus a pragmatic and
rational approach is the key to success.

14.3. Publicity
In the current scenario, publicity plays a vital role to make an E-Auction a

:46
successful event. Publicity can be bifurcated mainly into two parts:

 As per statutory/regulatory guidelines and

16
 General practices for fetching better quotes/price
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14.4 Statutory/Regulatory Requirements
For statutory compliance, “Sale Advertisement” is to be compulsorily
18
(i)
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published in two leading Newspapers, one of which should be in


vernacular language. Further, in addition to giving 30 days Notice to
the borrower/mortgagor/guarantor, Sale Notice is also required to be
affixed on the conspicuous part of the property.

(ii) The Sale Notice is to be loaded at the following two websites,


compulsorily:

www.pnbindia.in
25

&
www.tenders.gov.in

In case of e-auction notice must also be compulsorily loaded at

www.pnbindia.biz

14.5 Other Important Steps for Publicity


In addition to the above mentioned modes of publicity which are more or less
statutory/regulatory in nature, in order to brighten the prospects of successful
Auctions and fetch better price, following Publicity measures may also taken:

(i) Sale Notice can be displayed on Notice Boards of all the branches of the
Circle/ATM Cabins etc.

(ii) Other than the statutory requirement of publishing the Sale Notices in two
Newspapers, it can be published in some additional Newspapers, having
good circulation in that particular area.
28
(iii) To give wider publicity, a Strip can be displayed on the Local Cable
TV/Other TV Channels for some period say a week/fortnight/month.

(iv) Hand Bills/Pamphlets can be circulated through Newspaper Vendors,


which a low cost publicity medium with wider reach.

(v) For sale of properties with high Reserve Price (1 crore & above),
pamphlets/brochures containing description and photos of the property
(wherever possible) can also be considered for circulation.

(vi) While giving the advertisement in the Newspapers/Hand Bills/Pamphlets


etc. positive features of the property be highlighted e.g posh locality, near
to Market/Schools etc., having modern kitchen. Such features enhance
the chances of receiving better quotes. Thus proper description of the
security is very important.

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14.6 Preparation of list of potential buyers and Mobilization of bids

16
A database of the prospective Valuable Customers/Real Estate Agents/Property
/20 70
Dealers etc. may be prepared and kept hand for future sale transactions also. In
case of any fresh sale process, E-Mails/Invitation letters may be sent to such
18
prospective buyers to make the event successful.
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Mobilization of bids is very important parameter for a successful Auction process.


Once the auction process has commenced, one should not wait for the last day
of depositing the Earnest Money. Instead proactive efforts must be made at both,
Circle and Branch levels to mobilize the bidders.

14.7 Spot Inspection of the property and Enquiries by the Prospective Buyers
No bidder would be inclined to bid until and unless the property placed for sale, is
personally inspected by the bidder. Therefore such request of the bidders needs
25

to be complied with and spot inspection may be arranged as per their


convenience. Further, at the time of Due Diligence by the prospective buyers, it is
quite obvious and natural that certain queries are raised by them, for which it is
essential that they are properly, correctly and honestly responded to so that
no complications arise at a later stage, which may have an adverse effect on the
entire sale process.

14.8 Facelift of the Properties


Generally after taking possession, the condition of the property deteriorates due
to closure or lack cleanliness, whitewash etc. and sometimes it is difficult to have
access through the property due to growing of weeds, grass etc. in the open area
of the premises. Thus, before opening the property to spot inspection, wherever
possible, efforts must be made for giving them a face lift by spending a nominal
amount and taking help of the labour for whitewash, removal of weeds/grass,
cleaning the premises etc.

29
14.9 Actual /Physical/Symbolic Possession
As pointed out time and again, it is in the interest of the bank to take physical
possession of maximum eligible properties because it is easy to sell the
properties which are under physical possession of bank, and moreover,
properties under physical possession of bank fetch better price also. As such, all
field functionaries are again advised as under:
 All possible efforts be made to take eligible properties under physical
possession of bank.
 Applications before DM / CMM for taking physical possession need to be filed
simultaneously ith 13(4) notice.
 The applications filed before DM / CMM be closely followed up for expediting
physical possession. If needed, meetings be held with DM requesting to
expedite the matters.

:46
 In all those cases where DMs / CMMs are delaying the matters, writ petitions
be filed seeking directions to concerned DMs / CMMs to expedite action in
pending matters.

16
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However, where there is only Symbolic Possession, Bidders will be interested to
know when will he/they get the possession, in case the sale is finalized. Thus all
possible efforts must be made to obtain the DM/CMM orders so that Bank may
18
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give delivery of the property after the sale.

14.10 Utilization of services of Supporting Agencies


Bank permits utilization of services of Supporting Agencies for procuring bidders.
Through their professional approach and local contacts such Agencies can play
an effective role for getting the bidders. For utilization of services of Supporting
Agencies, Circle Heads may take a final call in this regard and wherever
required, services of such Agencies may be utilized.
25

14.11 SARFAESI action to be initiated against all secured assets including movable
assets & book debts. As per the definition provided under Section 2 (t) of
SARFAESI Act, the term ‘property’, inter alia, includes immovable property,
movable property as well as book debts. As such SARFAESI action has to be
initiated in all the NPA accounts including those where eligible secured assets
are available in the form of hypothecated movable properties and book debts
only.

14.12 Ministry of Finance, Department of Financial Services vide their letter dated
20.11.2015 has advised all the Public Sector Banks that, while conducting
e-auctions, following points must be included in the advertisements:

(i) In the advertisements the address should be complete with pin code of
city or area.

(ii) The advertisement should contain a column mentioning the outstanding


dues of Local Self Government (Property Tax, Water Sewerage,
electricity Bills etc.) on a particular date against each property.
30
Although in the said letter, it has not been clarified about address, however as an
abundant precaution, the word address may be considered for address of
the:
 Property(ies) placed for sale
 Concerned Branch
 Circle Office
 Authorized person etc.

In fact wherever the address is to mentioned in the advertisement, it should be


complete in all respects including pin code of city/area. Similarly any dues
payable to the Central/State/Local Government (whether Central or
locals/State etc. must be invariably mentioned against each respective
property(ies).

:46
14.13 Updation of data at SARFAESI portal
The data relating to SARFAESI action be updated at SARFAESI portal on regular
basis as the data extracted from SARFAESI portal is being used for various MIS
purposes.

16
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15. SALE OF IMMOVABLE SECURED ASSETS THROUGH PRIVATE TREATY
Sale through private treaty should generally be resorted to, only when the other
18
more transparent methods of public auctions/quotations/tenders fail to produce
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desired results. As per Bank’s extant guidelines, minimum number of attempts


of sale of immovable secured assets through other more transparent methods,
depending upon the assessed value/reserve price fixed for the secured assets, is
reiterated below:
 1 such attempt is prescribed for assets with a value up to Rs.1 crore.
 2 such attempts are prescribed for assets with a value more than Rs.
1 crore.
25

However, the alternative of private treaty may be considered without resorting to


other methods if all the dues of the bank/banks in the case are fully recovered.

15.1 Further, where dues of the bank(s) are not being fully recovered and the amount
recoverable through sale in private treaty is less than the assessed
value/reserve price, the approval of one level above the authority
competent to enter into private treaty should be invariably be obtained.

15.2 As per bank’s guidelines in vogue COCESI (Committee at Circle Office for
Enforcement of Security Interest) is empowered for approval of the Reserve
Price.

Hence, where dues of the bank are not being fully recovered and the
amount recoverable through sale in private treaty is less than the assessed
value/reserve price, approval of the Zonal Manager (ZM) should invariably
be obtained. Branches under Circle Office will seek approval through their
Circle Office, however LCBs may take up directly with the ZM.

31
15.3 Central Government through notification dated 03.11.2016 published in the
Gazette on 04.11.16 has made certain amendments in the Security Interest
Enforcement Rules, 2002 which have been circulated through Law Division
Circular no. 5/2016 dated 16.11.2016.

15.4 Major amendments related to Sale of properties through Private Treaty are
given below based on the clarification given by Law Division vide their letter
dated 01.05.17:

15.4.1 While settling terms of sale of secured assets by the Bank by method other
than public auction/public tender, consent of the borrower is not
necessary.

15.4.2 In terms of Sub-Rule 2 of Rule 6 & Sub-Rule 6 of Rule 8, the Authorized Officer
is invariably required to serve to the borrower a notice of 30 days for sale of

:46
movable as well as immovable properties. As such in conformity to the
judgement passed by the Hon’ble Supreme Court, the Bank is under obligation
to put the borrower on notice before sale of secured assets.

16
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It may be added further that if sale of such secured assets is being effected
either by inviting tender from public/by holding public auction, the secured
18
creditor shall be under obligation to cause a public notice of 30 days by
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publication in two newspapers.

16 FAILURE/ CANCELLATION OF SALE PROCESS


In terms of Govt. gazette notification dated 03.11.16, a new para has been
introduced after the provision of Rule 6 {sub rule(2)} of “The Security
Interest (Enforcement) Rule, 2002”, which deals with the failure of sale
processes, which states as under:

“Provided further that if sale of immovable property by any one of the methods
25

specified under sub rule (1) fails and the the sale is required to be conducted
again, the Authorized Officer shall serve, affix and publish notice of sale of
not less than fifteen days to the borrower for any subsequent sale.”

The methods of sale stipulated in Rule 6 {sub rule(1)} are:

(i) By obtaining quotations


(ii) Inviting Tenders
(iii) Holding Public Auction including through e-auction mode
(iv) By Private Treaty

Similarly amendment has been made in Rule 9 {sub rule (1)} and the revised
guidelines are given below:

“No sale of immovable property under these rules, in first instance (new
amendment) shall take place before the expiry of thirty days from the date on
which the public notice of sale is published in the newspapers as referred to in

32
the proviso to Sub Rule (6) of Rule 8 or notice of sale has been served to the
borrower.

(New para added vide Govt. of India notification dated 03.11.16)


Provided further that if the sale of immovable property by any one of the
methods (i.e quotations or tenders or public auction or private treaty)
specified by Sub rule (5) of Rule (8) fails and sale is required to be conducted
again, the authorized officer shall serve, affix and publish notice of sale of
not less than fifteen days to the borrower, for any subsequent sale.

16. STAY AGAINST SARFAESI ACT


We come across several cases where stay is granted by the DRTs/Courts
against the SARFAESI Action initiated by the Bank, on some ground or the other.
Thus there is always a need to analyze on case to case basis and remedial
measures be adopted for vacation of the stay.

:46
Given below is the list of some of such instances where stay has been granted
on account of various reasons and remedial measures there against:

S.No. Reasons For Stay


16 Remedial Measures
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1. Section 13(2) and other Notices under Authorized Officer must ensure that Section
SARFAESI Act are sent by UPC or 13(2) Notices are sent through Registered Post
ordinary post or improper service of (acknowledgement due)/Speed Post/Hand
18
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such Notices is furnished in the Delivery and got served through as per the
Court/DRT. prescribed guidelines mentioned in the
SARFAESI Act. In case the acknowledgment of
service is not received by the Authorized Officer,
steps must be initiated for tracking the same
from Indian Post internet site
(http://www.indiapost.gov.in/), as given in the
this Circular.
2. Representations received under Section It must be ensured that a proper reply is
13(3A) made by the borrowers/co- submitted within 15 days and guidelines
25

borrowers/guarantors in the mentioned in this Circular are complied with.


DRTs/Courts against the action initiated
by the Bank under the SARFAESI Act, Possession Notice should not be issued without
are not responded/replied by the bank, or prior to giving reply to the representation of
in the prescribed time frame of 15 days the borrower.
and/or in an appropriate manner.
3. As per Rule 8 of the Security Interest Compliance of Rule 8 of Security Interest must
(Enforcement Rules) 2002, in case of be ensured. Further, for submission of the
possession of immovable properties, proofs for having Symbolic/Actual Possession,
the possession is taken by affixing photographs must be taken from close as well
Possession Notice as per Appendix-IV as far angles, so as to cover optimum area of
by affixing it on the outer door or the required area/asset showing picture of the
conspicuous place of the property. Borrower/his representative / Witnesses /
However, proof submitted in the shape Authorized/Other Bank Officer. Possibility may
of photographs give a very closed view be explored for capturing the details through
of the door of the property, not Videography.
establishing conclusively that the
possession has been taken of the
property in question.

33
4. Copy of the Possession Notice is not Subsequent to taking of the possession of the
delivered to the borrower/mortgagor secured assets, copy of the Possession Notice
and proof of sending such copy to them be delivered to the borrower/mortgagor against
is not furnished in the DRT/Court and/or receipt and in case of refusal the same may be
improper recording of the proof for recorded and copy of the Possession Notice be
having possession. sent through Registered Post
(Acknowledgement Due)/Speed Post and
further, in terms of amendments in the Security
Interest (Enforcement) Rules introduced through
notification dated 03.11.16, all notices under
these rules may also be served upon the
borrower through electronic mode of
service.
5. Not adhering to the prescribed time Time line of 7 days and of publication of
limits for publication of Possession possession notice in two newspapers, must be
Notice in the two Newspapers within 7 strictly adhered to.
days.

:46
6. 30 days Notice is not issued to the As the borrower/mortgagor has a right of
borrower/mortgagor for holding of redemption, therefore, 30 days Notice as per
Auction/Sale. prescribed format (SI-13 of the SARFAESI
Manual) must be issued to the

16 borrower/mortgagor for holding of Auction /Sale.


/20 70
7. Invalid mortgage created in favour of Before initiating action under SARFAESI Act, it
the bank and/or different claimants must be ensured that valid mortgage has been
18
pressing for their ownership for the created in favour of the Bank.
/08 790

same secured assets. In other words a There may be some collusion of the alleged
third party files application, claiming to purchaser with the mortgager, hence all such
be the bonafide purchaser of the cases of disputed ownership/invalid mortgage
secured assets. must be contested on merits
8. Challenging the market value of the Proper reply be filed as per the Bank’s records,
immovable properties, got assessed by justifying and supporting the veracity of the
the bank while going for sale. Valuation Report vis a vis Reserve Price, fixed
by the Bank.
9. Inter-Bank disputes, each bank claiming In case of Inter-Bank disputes, if the other
to be the rightful owner of the secured banker goes directly to the court, application
25

assets. must be immediately filed stating that such


cases need to be dealt, first, through Inter Bank
Dispute Mechanism, besides immediately
referring such matters to Department of
Financial services, Ministry of Finance through
Head Office.
10. In case of NPA accounts of Educational In case of Educational Institutions, possession
Institutions, plea is taken that any action may preferably be taken when their academic
initiated under SARFAESI Act may ruin sessions are off/vacation period and
the career of the students etc. applications may be filed for granting orders to
the defaulting borrowers, for depositing of the
fees deposited by the students, with the
concerned bank.

Possibilities may be explored to take up the


matter with the governing Govt./Quasi-Govt.
bodies granting license/certification to such
institutions e.g AICTE (All India Council of
Technical Education), AIMA (All India
34
Medical Association), for putting pressure on
such institutions.
11. While filing the appeal against the In case any OTS/Compromise/Restructuring
SARFAESI action initiated by the Bank, Proposal has been received from the borrower,
plea is taken by the borrowers that an the same must be processed without any delay
OTS/Compromise/Restructuring etc. and the decision in that regard be immediately
Proposal is pending with the bank. conveyed to the borrower so that no stay is
granted on such grounds.

It is further advised that:

(i) In the cases where huge stakes of the bank are involved or it is
apprehended that borrower/mortgagor may file appeal against SARFAESI
action of the Bank, CAVEAT Application be filed in the DRT/DRAT/Court.

(ii) Proper reply/applications are filed in the DRTs/DRATs/Courts for vacation

:46
of stay/preponement of next dates of hearings etc.

(iii) Bank Officials and the dealing Counsel should invariably attend the

16
hearing of the SARFAESI appeal in the DRTs so as to ensure that
SARFAESI appeals are disposed off within 4 months and no stay orders
/20 70
remain operative.
18
/08 790

17. LAND MARK ORDERS BY DRT - APPEAL (SA) / INTERVENING


APPLICATION (IA) UNDER SARFAESI ACT:

17.1 Bank made an advance of Rs.18 crore in December 2010 to a Housing society
promoted by Senior Administrative/Police/Provincial Civil Service Officers for
construction of Villas & flats. Further advance of Rs.2 crore was also made for
completion of the project in January, 2012. However, consequent upon default in
payment of installment/interest by the Borrower, the account got classified as NPA in
July, 2013 for the outstanding dues of approx. Rs.20 crore. Bank issued SARFAESI
notice in July, 2013 for enforcing the mortgaged security of the Borrower. Symbolic
25

possession was taken in October, 2013 against which the borrower filed SARFAESI
Appeal(SA) before DRT in January, 2014 challenging action of the bank and sought
interim stay against SARFAESI Action by the Bank: The borrower also filed
Intervening Application(IA) before DRT.

17.2 The case was contested before DRT on the following grounds:

Contentions of the Borrower Contentions of Bank


i. The society has repaid the bank i. Bank opposed the contentions of the
substantial dues before being classified as Borrower by bringing to notice of DRT the
NPA. applicable clause of sanction vide which it
was duly acknowledged by the Society that
in case of nonpayment or service of interest,
the account shall get declared as NPA

35
ii. The project could not be completed and ii. At the time of sanction it was agreed upon
got delayed due to unfavorable market by the Borrower, that the cost escalation if
conditions, recession in the Real Estate any would be borne by them from their own
Sector and escalation in cost of resources and they shall complete the
construction. project as was envisaged at the time of
sanction.
iii. The bank neither restructured the loan iii. Borrower was sanctioned additional loan
nor granted additional funds of Rs.14 of Rs. 2 crore to help it out to meet cost
crore, otherwise the project could have escalations and complete the project.
been completed and bank dues would
have been paid by selling the dwelling
units.
iv. A reputed Real Estate company has iv. The offer was conditional and the
evinced interest to takeover entire loan of conditions were not acceptable to the bank
the bank and has issued letter also to the and Bank’s stand /view point had been

:46
bank provided Standby Letter of clarified to the borrower.
Credit/Bank Guarantee is issued by the
bank. Therefore bank could have saved
the position by allowing these
arrangements.
16
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v. Another Financial Institution is ready to v. The same Financial Institution said to be
sanction Rs.30 crore and they are going to now ready to sanction loan, had earlier put
18
disburse Rs. 5 crore by March,2014 and conditions upon the Bank, which were not
/08 790

remaining Rs.25 crore by April,2014. acceptable to the bank and now it was
nothing but another set of delaying tactics by
the borrower.
vi. The Bank’s SARFAESI action will vi. It was also brought to the notice of DRT
further complicate the situation. that earlier, the vehicle loans were also
granted by the bank which they failed to pay
and were adjusted only by selling these
vehicles.
vii.Bank also expressed its apprehensions
25

that applicants being highly influential, Police


Officers/Executing Officers of the State are
not allowing to take possession of the
properties rightfully charged to the bank.
They are creating hindrances in obtaining
permission of physical possession of
properties from the Distt. Magistrate, although
Bank had approached DM in the month of
Nov., 2013.

17.3 The DRT heard the agreements of both the sides and observed /ordered as follows
in its hearing in February, 2014:

Observations of DRT Orders of DRT


i. The main promoters being Senior i. The Presiding Officer of the DRT not only
Police/Administrative officers are highly dismissed interim application of the borrower
placed Govt. Officers and who otherwise declining interim stay against Sarfaesi action
36
should have been model for others of the bank, but also imposed cost of
instead are using tactical pressure of their Rs.25000/-.
stature in this case and misusing their
official capacities.
ii. The contention of the Society ii. The DRT further directed the DM to
regarding restructuring of the loan account immediately provide sufficient security to
is misconception. All the pleadings for the bank to take physical possession of
restructuring are nothing than those of the mortgaged security.
black sheep who have been giving
assurances to the bank, but unwilling to
pay dues of the bank.
iii. The readiness of real estate iii. Copy of the decision was also
company to take over the Unit is forwarded to Principal Secretary of the
nothing more than offering lollipops to State Govt. to ensure that these officers
the bank particularly when asking for should not be allowed to influence the DM.

:46
undertaking in the shape of Bank
Guarantees.
iv. The same Financial Institution earlier iv. Copy of the order was also sent to
putting unacceptable conditions for Inspector General of Police to take strict

16
sanction of loan, now agreeing to sanction action against its erring officials and tame
/20 70
of huge amount of loan without condition them to ensure security to the bank official
cannot be relied upon and seems that while taking possession of the unit.
18
highly placed officers are trying to procure
/08 790

each and every document to delay the


recovery process.
v. The bank is to recover approx.Rs.20 v. DRT also ordered to place a copy of its
crore from so called Public Officers in the orders on the personal files of all the
high ranks of law protecting agencies as Govt. Officers of the Society so that they
well as holding public offices of the State should not dare to obstruct the legal
are indulging in such practices that instead recourse of officers of the bank who are
of being a role model in the society are doing their best to recover huge amount of
showing eyes to the bank officers, who are public dues from such type of so called
25

trying to recover their dues. decorated Officers who are using their
position to make loss to the economy of
the company.
vi. It is not expected from these high
ranked officers to influence the District
Magistrate for providing security &
permission for taking possession of the
mortgaged security.

The above orders of the DRT obviously have a very demonstrative impact to create a
better recovery climate. These need to be noted to be used/contested in other cases
also. The orders highlight unfounded/flimsy arguments/grounds of the recalcitrant
borrowers on the basis of so called alibis like denial of restructuring of loans, intention
of takeover of loans by other Financial Institutions, or takeover of Unit by some other
Investors, and assurances to pay dues of the bank are nothing but delaying tactics by
those who in fact are not willing to pay dues of banks. If these unfounded pleas are
logically refuted by producing the loan documents/correspondence made and

37
properly briefing the dealing counsel ensuring that case is put before the
Tribunal in proper perspective, similar orders on the above lines are bound to be
pronounced in favor of the Bank facilitating quicker recovery of dues.

Branches/Nodal Officers/Circle Offices are requested to closely monitor such stay


orders and ensure that the security interest gets enforced smoothly. The mere presence
of senior level functionaries on the court hearings, obviously works as deterrent to such
recalcitrant borrowers for taking illogical pleas for seeking court interventions to delay
the court proceedings.

18. SUPREME COURT’S DECISION IN MARDIA CHEMICALS CASE


The Supreme Court pronounced its judgement in the case M/s Mardia Chemical
Ltd. vs Union of India and others, etc. etc. on 08.04.2004.

The Supreme Court has - (i) upheld the validity of the SARFAESI Act, - (ii) struck
off the provisions of Section 17(2) of the Act and - (iii) directed that any reply

:46
made / objections raised by the borrower in response to the notice given under
Section 13(2) of the Act should be considered and the consideration should be
a meaningful one with due application of mind and the objection should not

16
be rejected ritually. The reasons for not accepting the objections or points
/20 70
raised in reply, however brief they may be, must be communicated to the
borrower. The reasons so communicated shall only be for the purposes of the
18
information / knowledge of the borrower without giving rise to any right to
/08 790

approach the DRT under Section 17 of the Act, at that stage.

The existing guidelines for dealing with borrower’s reply to the bank’s demand
notice are contained in Chapter IV of the Bank’s Manual on Enforcement of
Security Interest. These provide that the Authorised Officer can issue rejoinder,
if the same is warranted by the allegations made by the borrower in his
reply to the bank’s demand notice, after verifying the facts of the matter vis-à-
vis the allegations, rebutting such allegations. The rejoinder, if need be, may be
got vetted by the Law Officer/ Manager (Law) at RO/ZO.
25

Keeping in view the observations made by the Supreme Court, the


borrower’s reply, if any, to the bank’s notice must be considered. The
reasons for not accepting the objections or points raised, however brief
they may be, must be communicated to the borrower.

+++

38
Annexure-1 (Revised SI-4)
60 Days’ Notice to Borrower
Date:___________
________________________
_________________________
(Name and address of the borrower
who has created security interest)

Dear Sir,

NOTICE U/S 13(2) of the Securitisation and Reconstruction of Financial Assets


and Enforcement of Security Interest Act 2002

:46
Reg : Account No.__________/credit facilities availed by
M/s__________________________________

16
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You, M/s ______________________________________ (Name & address of the
Borrower) have availed the following credit facilities:
18
/08 790

Facility Limit Balance outstanding


as on __________
1.
2.
3.
Total
Due to non payment of installment/ interest/ principal debt, the account/s has/have
25

been classified as Non Performing Asset as per Reserve Bank of India guidelines. We
have demanded/recalled the entire outstanding together with interest and other charges
due under the above facilities, vide letter dated ___________.

The amount due to the Bank as on ____________is


Rs.____________(Rupees________________________________________________
______) with further interest until payment in full (hereinafter referred to as “secured
debt”).

To secure the outstandings under the abovesaid facilities, you have, inter alia, created
security interest in respect of the following properties/assets:
Facility Security
1.
2. (Give details)
39
We hereby call upon you to pay the amount of Rs.____________ (Rupees__________
_____________________) with further interest at the contracted rate until payment in
full within 60 days (sixty days) from the date of this notice. In default, besides
exercising other rights of the Bank as available under Law, the Bank is intending to
exercise any or all of the powers as provided under section 13(4) of the Securitisation
and Reconstruction of Financial Assets and Enforcement of Security Interest Act
2002 (hereinafter referred to as “the Act”). The details of the secured asset/s
intended to be enforced by the Bank, in the event of non payment of secured debt by
you are as under:
1.
2.

Your attention is hereby drawn invited to provisions of sub-section (8) of section


13 of the Act in respect of time available to you redeem the secured assets.

:46
Please take notice that in terms of section 13(13) of the said Act, you shall not, after
receipt of this notice, transfer by way of sale, lease or otherwise (other than in the
ordinary course of business) any of the secured assets above referred to, without prior

16
written consent of the Bank. You are also put on notice that any contravention of this
/20 70
statutory injunction/restraint, as provided under the said Act, is an offence.
18
/08 790

If for any reason, the secured assets are sold or leased out in the ordinary course of
business, the sale proceeds or income realised shall be deposited/remitted with/to the
Bank. You will have to render proper account of such realisation/income.

*We reserve our rights to enforce other secured assets.


Please comply with this demand under this notice and avoid all unpleasantness. In case
of non-compliance, further needful action will be resorted to, holding you liable for all
costs and consequences.
25

*This notice is issued without prejudice to the bank taking legal action before
DRT/Court, as the case may be.

*This notice is issued without prejudice to the bank’s rights in the suit/litigation
pending before DRT/Court.

* Delete, if inapplicable.

Yours faithfully,
For Punjab National Bank
____________________
_

(Name Designation)
AUTHORISED OFFICER
Copy to:
____________________
40
Annexure-2 (Revised SI-4 A)
60 Days’Notice to Guarantor/Mortgagor
Date:___________
______________________
_____________________
(Name and address of the
guarantor/mortgagor who has created
security interest)
Dear Sir,
NOTICE U/S 13(2) of the Securitisation and Reconstruction of Financial Assets

:46
and Enforcement of Security Interest Act 2002

16
Reg : Account No.__________/credit facilities availed by
/20 70
M/s______________________________________
M/s __________________________________________________
18
/08 790

(Name & address of the Borrower)


have availed the following credit facilities:
Facility Limit Balance outstanding
as on __________
25

1.
2.
3.
TOTAL
Due to non payment of instalment/interest/principal debt the account/s has/ have been
classified as Non Performing Asset as per Reserve Bank of India guidelines. We have
already demanded/recalled the entire outstanding together with interest and other
charges due under the above facilities from the Borrower, vide letter dated
______________, copy of which has already been sent to you. We have invoked the
guarantee vide letter dated ___________.

41
The amount due to the Bank as on ____________is
Rs.____________(Rupees_________________________) with further interest until
payment in full (hereinafter referred to as “secured debt”).

To secure the outstandings under the abovesaid facilities, you have, interalia, created
security interest in respect of the following properties/assets:
Facility Security
1.

2. (Give details)

:46
3.

16
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We hereby call upon you to pay the amount of
Rs.____________(Rupees________________________________________________)
18
with further interest on the contracted rate until payment in full within 60 days (sixty
/08 790

days) from the date of this notice. In default, besides exercising other rights of the Bank
available under Law, the Bank is intending to exercise any or all of the powers as
provided under section 13(4) of the Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act 2002 (hereinafter referred to as
“the Act”). The details of the secured asset/s intended to be enforced by the Bank, in
the event of non-payment of secured debt by you are as under:

1.
25

2.

3.

Your attention is invited to provisions of sub-section (8) of section 13 of the Act in


respect of time available to redeem the secured assets.

Please take notice that in terms of section 13(13) of the said Act, you shall not, after
receipt of this notice, transfer by way of sale, lease or otherwise (other than in the
ordinary course of business) any of the secured assets above referred to, without prior
written consent of the Bank. You are also put on notice that any contravention of this
statutory injunction/restraint, as provided under the said Act is an offence. If for any
reason, the secured assets are sold or leased out in the ordinary course of business,
the sale proceeds or income realised shall be deposited/remitted with/to the Bank. You
will be liable to render proper account of such realisation/income.
42
*We reserve our rights to enforce other secured assets.

Please comply with this demand under this notice and avoid all unpleasantness. In case
of non-compliance, further needful action will be resorted to, holding you liable for all
costs and consequences.

*This notice is issued without prejudice to the bank taking legal action before DRT/Court,
as the case may be.

*This notice is issued without prejudice to the bank’s rights in the suit/litigation pending
before DRT/Court.

:46
*Delete, if inapplicable.

16
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Yours faithfully,
18
/08 790

For Punjab National Bank

_____________________

_____________________
25

(Name Designation)
AUTHORISED OFFICER
Copy to:
____________________

43
Annexure-3

Tracking of Messages/Notices sent under Section 13(2) by Registered Post /


Speed post

Normally in the ordinary course of things, when notices are sent by Registered
Post/Speed Post (Acknowledgement Due), service of notices is effected within a
reasonable period of 7 days or so. It is, therefore, advisable that instead of waiting for
receipt of Acknowledgements /undelivered notices /service report from the Post Office,
the field functionaries can track service of these notices from the Website of
Indian Post of the Govt. of India. The steps for tracking delivery of the notices sent
by Registered / Speed Post are narrated herein below:

STEP 1
Log in on the internet site http://www.indiapost.gov.in/

:46
When you log in, the site of Indian Post will open and on the top side of the
screen, following Menu options would be displayed:

16
Home About Mail Premium Financial Retail Customer Philately Tools
/20 70
Us Services Products Services Services Care

STEP 2
18
/08 790

Click on the extreme right-side the Menu ‘Tools’, then following options will
appear:
Track consignment
Post Office Saving Schemes interest Calculator
Postage Calculator
Speed Post Rate Calculator
Search Pin Code

STEP 3
25

Click on “Track consignment”. A screen would be displayed as shown below:

Track Consignments
Track All Mail Items

Enter 13 Digit Consignment Number of (Speed Post/Registered Mail) Go(


BUTTON)

After entering the 13 digit consignment number, Click “Go” icon to view results.

In fact following Tracking Number Formats are available:


Category Format No. of digits
Speed Post (EMS) Domestic EE123456789IN 13
International EMS Articles to be delivered in
EE123456789XX 13
India
Electronic Money Order (eMO) 000000000000000000 18

44
Registered Mail RX123456789IN 13
Express Parcel Post XX000000000XX 13

STEP 4
When 13 digit consignment number is entered and button “Go” is pressed,

Track Result for the consignment would be shown as under:

Example
Track More
Lets us assume, the consignment number is RD190533215IN
Booked Delivered
Booked at Delivered at Details
on on
PATEL NAGAR R K PURAM
30/08/2013 31/08/2013 Details

:46
EAST (MAIN)

Not satisfied? Click here to register complaint.

16
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Note:
To have a proof in black & white for record purposes, a print of
the above mentioned status of delivery be taken out and kept in
18
/08 790

the respective file.


STEP 5
On further clicking the “Details” icon shown in the above mentioned
screen, following screen will apeear:

Detailed Track Events for : RD190533215IN


Date Time Status at Status
PATEL
25

30/08/2013 10:19:02 NAGAR Article Booked


EAST
RMS
Article Bagged to R K PURAM
31/08/2013 01:57:16 BHAVAN
(MAIN)
(CRC)
RMS
Bag Despatched to R K PURAM
31/08/2013 03:46:06 BHAVAN
(MAIN)
(CRC)
R K PURAM
31/08/2013 10:54:24 Bag is Opened
(MAIN)
R K PURAM
31/08/2013 11:57:40 Article Delivered
(MAIN)
R K PURAM
03/09/2013 11:20:56 Bag is Received
(MAIN)
Take out the print of the above mentioned “Detailed Track Event” for record
purpose and place it in the respective file.

45
Note: If you are not satisfied, a complaint can also be lodged as stated
herein above at Step No. 4, which we understand, is duly replied by the Post
Office within 5 days.

Nevertheless the acknowledgements etc., whenever received should be kept in


record too. Further, as an abundant precaution report of service from the
concerned Post office duly signed/authenticated by the Postal authorities
be obtained and kept on record.

+++

:46
16
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18
/08 790
25

46
Annexure-4

Tracking of Messages/Notices sent under section 13(2)

As per Rule 3 of Security Interest Enforcement Rules 2002, the Demand Notice can
also be sent through Electronic Mail Service (E-Mail). Therefore wherever E-mail
addresses of the obligants are available, it is advisable to send Notice under Section
13(2) to them by E-Mail also.

In order to prove that Sec. 13(2) Notices were sent through email, the branch needs to
take out and keep a print of e-mail as sent to the respective obligant and keep it in the
file for record purposes..

Further, in case Read Receipt/ Delivery Receipt message stands already activated on

:46
the E-mail of the Sender/Branch, a print out of the Read Receipt/ Delivery Receipt
message be also taken which would be the most important document to prove in the
court of law that such a notice sent by e-mail and was duly delivered to the

16
recipient/borrower/obligants.
/20 70
To activate the Read Receipt/ Delivery Receipt message, the branches need to follow
18
the following procedure or take help of IT Official at Circle Offices.
/08 790

The procedure is prescribed below:

Track all messages that you send in Microsoft Outlook


25

47
STEP-1 Open your E-Mail and go to Menu Option >>Tools<< , which is
available on the top left side.

:46
16
/20 70
18
/08 790
25

48
STEP-2 On the Tools menu, click “Options” and then under E-Mail, Click “E-
mail options”

:46
16
/20 70
18
/08 790
25

49
STEP-3 .Under Message handling, click “Tracking Options”

:46
16
/20 70
18
/08 790
25

50
Step-4 Select the Read receipt or the Delivery receipt /or both of the check box.

:46
16
/20 70
18
/08 790
25

+++++

51
Annexure-5

REPLY TO REPRESENTATION/ OBJECTIONS MADE TO THE DEMAND NOTICE

REPRESENTATION /OBJECTIONS REPLY OF THE BANK


S. Possible objections from To explain with reference to the following
No. Borrower/owner
1 Denial that account has been NPA Explain how account has been classified as
NPA as per extant guidelines of RBI/Bank.
2 Denial of loan To deny and refer to Loan application and
loan documents executed supported with
proof of end utilization, and particulars of
specific release etc;
3 Denial of execution of Loan documents Loan documents executed supported with
other correspondence, if any.

:46
4 Denial of creation of charge / mortgage Loan /Security documents like hypothecation
agreements/Mortgage charge created and If
these are registered/ filed with statutory
authorities-Sub Registrar, like ROC, RTO

16 and Central Registry under SARFAESI Act,


/20 70
etc., be referred to.
5 Denial of Guarantee by Guarantors and The liability of the guarantors is joint, several,
18
resort to borrowers securities first. and co-extensive with that of the borrower
/08 790

and bank can resort to any security.


6 Claim Barred by limitation To deny and refer to operations made in the
account (debit and credit transactions made
or last installment deposited, loan documents
executed, Recall Notice served, Invocation of
guarantee, Balance Confirmation Letter
executed or the Balance Sheet of the party,
if available.etc).
7 Rate of interest has not been correctly To explain that rate of interest has been
25

charged, Penal interest has been charged as per Sanction letter, loan
wrongly charged, rate of interest is high documents and various circulars and is not
and not charged as per guidelines of contrary to RBI guidelines/Bank’s policy.
RBI.
8 Debits of various charges / expenses to To deny, refer to enabling clauses in the loan
the account disputed. documents and Bank guidelines.
9 Claim is not correct. To deny and refer to the Balance
Confirmation Letters executed or the
Balance Sheet of the party, if available.etc
10 Statement of account not furnished / To state that Statement of account furnished
received. from time to time .However furnish a copy of
Statement of account again to the borrower.
11 Bank can’t take action without filing suit No such bar is prescribed under SARFAESI
or can’t take possession without order Act. In fact Civil Court has no jurisdiction at
of the court etc. all for steps taken under this Act.
12 Simultaneous action under SARFAESI Supreme Court vide its judgment
cannot be resorted to as Civil dt.29.11.2006 in the matter of Transcore v/s
52
Case/DRT case is pending. Union of India has decided that remedies
under DRT Act & Securitization Act can be
simultaneously resorted to.

As such the controversy stands decided and


both the actions can be taken
simultaneously.
13 Requests for some time, Consider the same on merits as per extant
Tagging/Restructuring/Reschedulement Guidelines and decision be taken quickly at
/ the appropriate level and borrower be
Rephasement / OTS. informed accordingly, subject to executing a
Supplementary Agreement to keep further
action under SARFAESI in abeyance.

++++

:46
16
/20 70
18
/08 790
25

53
Annexure-6 (Revised SI-7A)
PANCHNAMA
(Minutes/Panchnama when borrower readily delivers possession)

WHEREAS We,

S.No. Name of Panch & Address Age Occupation


Father’s/Husband Name

the above mentioned Panchs on being called by Shri____________, the


Authorised Officer of Punjab National Bank, under the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002

:46
were present at ________________________________________.

We declare and state that Shri_________________, the Authorised Officer demanded

16
payment of the dues mentioned in the Demand Notice dated __________ in respect of
/20 70
loan A/c bearing No._______, and on its non-payment, in exercise of Powers under
Section 13(4) of the said Act, called upon the borrower/guarantor/mortgagor
18
/08 790

Sh/M/s_____ ______________________ to deliver possession of the secured asset as


detailed in the Demand Notice abovesaid. The borrower/guarantor/mortgagor abovesaid
has/have handed over the possession of the secured assets, as detailed in the
inventory attached to this Panchnama between the hours_________ and____________
in our presence.

The borrower’s /guarantor’s /mortgagor’s attention is invited to provisions of sub-


section (8) of section 13 of the Act in respect of time available to redeem the
secured assets.
25

Therefore, we solemnly, declare that the facts of the Panchnama mentioned herein
are true & correct to the best of our observations & knowledge.
Name Address Signature
1.
2.
Date:
Time:
Drawn before me
(Name Designation)
Authorised Officer

54
Annexure-7 (Revised SI-7B)

PANCHNAMA
(Minutes/Panchnama when AO takes possession without resistance)

WHEREAS We
S.No. Name of Panch & Address Age Occupation
Father’s/Husband Name

the above mentioned Panchs on being called by Shri____________, the


Authorised Officer of Punjab National Bank, under the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002

:46
were present at____________________.

We declare and state that the Authorised Officer, in exercise of Powers under

16
Section 13(4) of the said Act, today went to/entered the premises of Shri / M/s
/20 70
_________________(borrower/guarantor/mortgagor) at________________, and
demanded the payment of the dues mentioned in the Demand Notice
18
dated_________ in respect of loan A/c bearing No.______________ and on its non-
/08 790

payment, has taken over possession of secured assets, as detailed in the inventory
attached to this Panchnama between the hours_________ and____________ in our
presence.

The borrower’s /guarantor’s /mortgagor’s attention is invited to provisions of


sub-section (8) of section 13 of the Act in respect of time available to redeem the
secured assets.
25

Therefore, we solemnly, declare that the facts of the Panchnama mentioned herein
are true & correct to the best of our observations & knowledge.
Name Address Signature
1.
2.
Date:
Time:
Drawn before me
(Name Designation)
Authorised Officer

55
Annexure-8 (Revised SI-7C)
PANCHNAMA
(Minutes/Panchnama where Authorized Officer faces resistance but takes
possession)
WHEREAS We

S.No. Name of Panch & Address Age Occupation


Father’s/Husband Name

the above mentioned Panchs on being called by Shri____________, the Authorised


Officer of Punjab National Bank, under the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002 were present at
_______________________ .

:46
We declare and state that the Authorised Officer in exercise of powers under Section
13(4) of the said Act today went to/entered the premises of Shri / M/s

16
____________________________________ (borrower/guarantor/mortgagor)
/20 70
at________________________, and demanded the payment of the dues mentioned
in the Demand Notice dated_________ in respect of loan A/c bearing
No.______________ and on its non-payment, has taken over possession of the
18
/08 790

secured assets, as detailed in the inventory attached to this Panchnama between the
hours_________ and____________ in our presence.

The borrower‘s /guarantor‘s /mortgagor’s attention is invited to provisions of


sub-section (8) of section 13 of the Act in respect of time available to redeem
the secured assets

We also hereby state that during takeover of possession


_____________________________________________________________________
25

_____________________________________________________________________
______________________________________________.
(give details of occurrence of incidents, if any)

Therefore, we solemnly, declare that the facts of the Panchnama mentioned herein
are true & correct to the best of our observations & knowledge.

Name Address Signature


1.
2.
Date:
Time:
Drawn before me
(Name Designation)
Authorised Officer

56
Annexure-9 (Revised SI-7D)
PANCHNAMA
(Minutes/Panchnama where taking possession is not possible)
WHEREAS We,
S.No. Name of Panch & Address Age Occupation
Father’s/Husband Name

the above mentioned Panchs on being called by Shri____________, the ‘Authorised


Officer’ of Punjab National Bank, under the Securitisation, Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002 were present at

:46
____________________________.

16
We declare and state that the ‘Authorised Officer’ in exercise of Powers under Section
/20 70
13(4) of the said Act today went to/entered the premises of Shri /
M/s_____________________________________ (borrower/guarantor/mortgagor)
at________________________, and demanded the payment of the dues mentioned in
18
/08 790

the Demand Notice dated________ in respect of Loan A/c bearing No. ______ and on
its non-payment, proceeded to take over possession of secured assets, as described in
the schedule hereunder, between the hours_________M. and____________M. in our
presence. There was hue and cry. The ‘Authorised Officer’ faced lot of resistance from
the borrower/ guarantor/mortgagor and borrower’s/guarantor’s/mortgagor’s ______
___________.We also hereby state that while trying to take over of
possession_____________________________________________________________
______________________________________________________________________
(give details of the incidents)
25

The ‘Authorised Officer’ came to the conclusion that possession cannot be taken
without use of force. Hence it is decided by the ‘Authorised Officer’ not to venture
further but to seek the assistance of Magistrate, as per the provisions of the Act.

Therefore, we solemnly, declare that the facts of the Panchnama mentioned herein
are true & correct to the best of our observations & knowledge.
Schedule of Assets
Name Address Signature
1.
2.
Date:
Time:
Drawn before me
(Name Designation)
Authorised Officer
57
Annexure-10-A
(Describe name, SUPPLEMENTARY AGREEMENT
constitution and
address of the (In case OTS)_
Borrower)

This Supplementary Agreement is executed at _______ on this


____ day of __________ between
M/s___________________________________________________
______________________________________________
(hereinafter referred to as “the Borrower” which term shall include
its successors and assigns) and PUNJAB NATIONAL BANK, a
body corporate constituted under Banking Companies (Acquisition
and Transfer of Undertakings) Act, 1970 having its Head Office at
7, Bhikhaiji Cama Place, New Delhi 110 066 and, inter alia, a
Branch Office at ___________ (hereinafter referred to as “the

:46
Bank” which term shall include its successors and assigns).

16
WHEREAS the Borrower has availed, inter alia, the following
/20 70
facility/ies from the Bank :
______________________________________________________
18
/08 790

______________________________________________________
______________________________________________________

Describe the WHEREAS the above said facility/ies has/have been secured
facilities availed by the following securities :
______________________________________________________
______________________________________________________
______________________________________________________
25

WHEREAS the Bank, in terms of the provisions of the Securitisation


and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 (SARFAESI ACT), has issued 60 days
notice/have taken further steps,
Namely,_______________________________________________
Give details of _________________ in exercise of the powers given under the Act,
the securities in respect of following securities:
______________________________________________________
______________________________________________________
_____(hereafter referred to as ‘ the said security.)

WHEREAS the borrower has shown his / her inability to pay the
total outstanding amount under the said credit facilities within the
58
prescribed period..

WHEREAS the borrower proposed to enter into a compromise / one


time settlement in the account.
Give details of
securities under WHEREAS the Borrower has requested the Bank to hold on the
enforcement
enforcement of security interest in respect of the said security.

WHEREAS the Bank has agreed to the proposal of the borrower for
compromise on the following terms and conditions and also to hold
on the enforcement of security interest during implementation of
compromise proposal.

:46
NOW, THIS AGREEMENT WITNESSETH :
1. The Borrower agrees and acknowledges that the amount

16
outstanding in respect of the abovesaid facility/ies as on
/20 70
_________is Rs.__________ (Rupees
_______________________ only) as under:
18
/08 790

Facility Amount

2. The Bank and the Borrower have agreed that if and only if the
borrower pays without default Rs. ________ (Rupees
_________________) along with interest @ _____ from time to
time as per the following time schedule, Bank will hold on the
enforcement of security interest.
25

(Time Schedule)
3. Further if and only if the Borrower pays the amount without
default as above said, all the amount due to the bank, as stated in
clause 1 above will stand discharged.
4. The Bank and the Borrower agree that possession notice earlier
issued by the Bank be treated as not having acted upon. The
Borrower confirms that the possession of the secured asset taken
by the Bank, has been restored back to him / them in good
condition as was taken by the Bank.

OR
The Borrower agrees that the security is taken possession of by the
Bank as per procedure as prescribed under the Security Interest
(Enforcement) Rules, 2002 and the Bank will not proceed further for

59
sale, to facilitate the fulfillment of compromise terms by the
Borrower.

5. The Borrower confirms the continuance of the said security and


other securities as before.

6. The borrower agrees that in the event of any default in payment


of the compromise amount by the borrower:

a) All concessions granted as above, shall lapse and the Bank


shall be entitled to recover entire amount with further interest and
costs as stated in the clause 1 above.

b) Bank will be entitled to resume process of taking possession /


sale of the security from the point where it was ‘held on’ and Bank’s

:46
decision in this regard will be final and binding upon borrower.

7. The Borrower agrees that all other terms and conditions as

16
contained in the loan and security documents continue to be in
/20 70
force and be binding, save and except those modified as above.
18
/08 790

8.This Supplementary Agreement is in addition to the loan and


security documents executed by the Borrower.

IN WITNESS WHEREOF, the parties hereto have signed these


presents on the day, month and year above mentioned.

For ………………
Delete whichever
____________
25

is not applicable
(BORROWER)

For PUNJAB NATIONAL BANK


(AUTHORISED SIGNATORY)

60
Annexure- 10A-1
NOTE: To be stamped as an agreement. Not to be Attested/Witnessed
LETTER OF CONSENT FROM GUARANTOR
PLACE : _________
DATE : __________
The Branch Manager
Punjab National Bank
BO: _____________

Dear Sir,
Reg : M/s ………………………………... (Borrower),
Facility…………………Account No…………..

The Borrower has been availing the credit facility/ies as above said. The above credit
facility/ies, inter alia, has/have been guaranteed by me/us vide guarantee deed / letter

:46
of guarantee dated_________.

The Bank has issued demand notice to borrower under Section 13(2) of SARFAESI
Act/has taken further
16
steps namely _________________
/20 70
_________________________________, in terms of the provisions of the Act.
18
/08 790

The Borrower has entered into a compromise / one time settlement with the Bank. In
terms of the compromise the Bank and the borrower has agreed that if and only if the
borrower pays without default a sum of Rs.____________ (Rupees
_________________ only) along with interest @______% PA from time to time as per
the time schedule agreed upon between the bank and the borrower, bank will hold on
the enforcement of the security interest, as stated in supplementary agreement
dated_______

I/We give consent to the arrangement as above said as per the Supplementary
Agreement/s dated ___________.
25

I/We agree that the Guarantee/s dated ___________ already executed by me/us will
continue to be in force and binding on us.
I/We confirm and acknowledge that the mortgage/hypothecation security, as
created/executed by me/us continues to be in force and secures the above facility/ies
availed/being availed by the Borrower.

Thanking you,
Yours faithfully,

________
[GUARANTOR (S)]

61
Annexure-10-B
SUPPLEMENTARY AGREEMENT
(SARFAESI Action kept in Abeyance Reasons other than OTS)

This Supplementary Agreement is executed at _______ on


this ____ day of __________ between
M/s_________________________________________________
________________________________________________
(hereinafter referred to as “the Borrower” which term shall include
its successors and assigns) and PUNJAB NATIONAL BANK, a
body corporate constituted under Banking Companies (Acquisition
and Transfer of Undertakings) Act, 1970 having its Head Office at
7, Bhikhaiji Cama Place, New Delhi 110 066 and, inter alia, a
Branch Office at ___________ (hereinafter referred to as “the

:46
Bank” which term shall include its successors and assigns).

16
WHEREAS the Borrower has availed, inter alia, the following
/20 70
facility/ies from the Bank :
____________________________________________________
18
/08 790

____________________________________________________
____________________________________________________
WHEREAS the abovesaid facility/ies has/have been secured by
the following securities :
____________________________________________________
____________________________________________________
____________________________________________________
25

WHEREAS the Bank, in terms of the provisions of the


Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (SARFAESI ACT), has
issued 60 days notice/have taken further steps,
Namely,______________________________________________
__________________ in exercise of the powers given under the
Act, in respect of following securities:
____________________________________________________
____________________________________________________
_________(hereafter referred to as ‘ the said security.

WHEREAS the borrower has shown his / her inability to pay the
total outstanding amount under the said credit facilities within
prescribed period.
WHEREAS the Borrower has requested the Bank to hold on the
enforcement of security interest in respect of the said security due
62
to the reason ____________________.

Whereas the bank has agreed to the justification/reason given by


the borrower and also to hold on enforcement of security interest
_______________(not exceeding a period of 60 days).

NOW, THIS AGREEMENT WITNESSETH :


1. The Borrower agrees and acknowledges that the amount
outstanding in respect of the abovesaid facility/ies is
Rs.__________(Rupees _______________________ only) on
______________ as under:

Facility Amount

:46
2.. The Bank and the Borrower agree that possession notice
earlier issued by the Bank be treated as not having acted upon.

16
The Borrower confirms that the possession of the secured asset
/20 70
taken by the Bank, has been restored back to him / them in good
condition as was taken by the Bank.
18
/08 790

OR
The Borrower agrees that the security is taken possession of by
the Bank as per procedure as prescribed under the Security
Interest (Enforcement) Rules, 2002 and the Bank will not proceed
further for sale due to the reason mentioned as above.

3. The Borrower confirms the continuance of the said security and


other securities as before.
25

4. In the event of any default/unable to sort out the reasons to


hold on SARFAESI action within prescribed period , Bank will be
entitled to resume process of taking possession / sale of the
security from the point where it was ‘held on’. The borrower agrees
that in that eventuality, no fresh notice of possession will be issued
by the Bank.

5. The Borrower agrees that all other terms and conditions as


contained in the loan and security documents continue to be in force
and be binding, save and except those modified as above.

6.This Supplementary Agreement is in addition to the loan and


security documents executed by the Borrower.

IN WITNESS WHEREOF, the parties hereto have signed these


presents on the day, month and year above mentioned.

63
For ………………

_________
(BORROWER)

For PUNJAB NATIONAL BANK

:46
(AUTHORISED SIGNATORY)

16
/20 70
18
/08 790
25

64
Annexure-10-B-1
NOTE: To be stamped as an agreement. Not to be Attested/Witnessed
LETTER OF CONSENT FROM GUARANTOR
PLACE : _________
DATE : __________
The Branch Manager
Punjab National Bank
BO: _____________

Dear Sir,
Reg : M/s ………………………………... (Borrower),

Facility…………………Account No…………..

:46
The Borrower has been availing the credit facility/ies as above said. The above credit
facility/ies, inter alia, has/have been guaranteed by me/us vide guarantee deed / letter
of guarantee dated_________.

16
The Bank has issued demand notice/ has taken further steps namely
/20 70
_________________ _________________________________, in terms of the
provisions of the Securitisation and Reconstruction of Financial Assets and
18
Enforcement of Security Interest Act, 2002 (SARFAESI ACT)
/08 790

To sort out the reason /justification given by the borrower within….(period) acceptable
to the Bank and bank has agreed to hold on SARFAESI action as stated in the
supplementary agreement, I/We give consent to the arrangement as above said as per
the Supplementary Agreement/s dated ___________.

I/We agree that the Guarantee/s dated ___________ already executed by me/us will
continue to be in force and binding on us.
25

I/We confirm and acknowledge that the mortgage/hypothecation security, as


created/executed by me/us continues to be in force and secures the above facility/ies
availed/being availed by the Borrower.

Thanking you,
Yours faithfully,
_________
[GUARANTOR (S)]

65
Annexure-11

(Notice to the Borrower for providing details of Book Debts and Receivables)

BO: ____________
(Give complete address of the branch)
(Telephone No.__________; Email__________________)

To Date:________
Sh. / M/S………………

--------------------------------
(Borrower’s Name and Complete Address)

:46
Reg: Your NPA A/Cs____________________________________

Sir,

16
/20 70
You, Sh./ M/s_____________________ availed credit facilities from Punjab National
Bank, BO:_____________ and have failed to pay the amount due to the Bank in
18
/08 790

respect of the secured debt amounting to Rs…………….. as on ………..and further


interest payable thereunder for the period commencing immediately after the said date.

You hypothecated with the bank your present and future book debts and other money
receivables by way of first charge as continuing security to the bank for due repayment
of the debts.

Further, as per the terms and conditions of loan/credit facilities availed by you, You are
required to submit statement of book-debts hypothecated to Bank on the prescribed
format provided to you in time and regularly at the monthly (mention stipulated
25

periodicity) intervals. You submitted the statement lastly on…………… for the
month………….However, thereafter, You have not submitted the statement and got the
books of accounts/register inspected and verified by the bank officials.

You are requested to submit/provide the details of all the book-debts and receivables
within 15 days without fail to the Branch as under :

S.No. Name & Address of the Debtor Amount Due Date Since When Due

1.

2
BRANCH MANAGER

66
Annexure –12

(Notice To M/s_________(Borrower) and the Debtors of M/s________(Borrower)

BO: ____________
(Give complete address of the branch)
(Telephone No.__________; Email__________________)

PUBLIC NOTICE
Whereas M/s_____________________ (herein after called the borrower) having
Registered Office at_____________________ availed credit facilities from Punjab
National Bank, BO:_____________. On account of default committed by the borrower

:46
accounts of the borrower have been classified as Non Performing Assets by the Bank
with outstanding balance of Rs.____________________ as on________________.

16
Demand Notice U/s 13(2) of the Securitsation and Reconstruction of Financial Asset
/20 70
and Enforcement of Security Interest Act (SARFAESI Act) 2002 on ________has been
issued to the borrower to discharge its liability in full. The Book Debts and other
18
receivables of the borrower are hypothecated/ charged with the Bank as a security and
/08 790

as such are secured asset of the Bank.

Notice is hereby given to M/s.___________________(Borrower) prohibiting and


restraining it from recovering the debts due from its debtors and interest thereon and all
the Debtors of M/S.___________________ (the borrower) are prohibited and restrained
from making payment of the said debt or any part thereof or any interest thereon to the
borrower or to any person whomsoever, otherwise than to the undersigned. The
Debtors are hereby called upon and directed to make payment to the undersigned. The
payment made to the undersigned shall give valid discharge as if payment has been
25

made to the Borrower.

Further, any contravention of the Provisions of SARFAESI Act, 2002/Rules is an offence


in terms of Section 29 of the said Act.

In case of any query please contact the undersigned personally.

For Punjab National Bank


Date__________

Place_________ CHIEF MANAGER


AUTHORISED OFFICER

67
Annexure –13 (Revised SI-10)
POSSESSION NOTICE
Possession Notice for Immovable Property in case of one borrower
(For Immovable property)

Whereas

The undersigned being the Authorised Officer of the Punjab National Bank under the
Securitisation and Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 and in exercise of Powers conferred under Section 13 read with
Rule 3 of the Security Interest (Enforcement) Rules, 2002, issued a demand notice
dated_____________ calling upon the Borrower Shri
__________________/M/s____________________
__________________________________to repay the amount mentioned in the

:46
notice being Rs.__________________(In
words_______________________________) within 60 days from the date of
notice/date of receipt of the said notice.

16
/20 70
The borrower having failed to repay the amount, notice is hereby given to the
borrower and the public in general that the undersigned has taken possession of
the property described herein below in exercise of powers conferred on him
under sub-section (4) of section 13 of Act read with rule 8 of the Security Interest
18
/08 790

Enforcement) Rules, 2002 on this the .......day of ….. of the year……


The borrower’s /guarantor’s /mortgagor’s attention is invited to provisions of
sub-section (8) of section 13 of the Act in respect of time available to redeem
the secured assets

The borrower in particular and the public in general is hereby cautioned not to deal with
the property and any dealings with the property will be subject to the charge of the
Punjab National Bank for an amount of Rs.______________and interest thereon.
25

________________________________________________________

Description of immovable property

68
All that part and parcel of the property consisting of Flat No. /Plot
No._____________ In Survey No. __ /City or Town Survey No.

___ /Khasra No._______________ Within the registration sub-district


__________ and district ________________

Bounded:
On the North by
On the South by
On the East by
On the West by

:46
16 .………………….
/20 70
DATE:
18
(Name Designation)
/08 790

Authorised Officer
PLACE: Punjab National
Bank
25

69
Annexure –14 (Revised SI-10 A)
(For publication purposes)
POSSESSION NOTICE
Common Possession Notice for Immovable Properties of more
than one borrower by the same Authorised Officer
(For Immovable property)
Whereas
Punjab National Bank/ the Authorised Officer/s of the Punjab Nationa Bank under
the Securitisation and Reconstruction of Financial Assets & Enforcement of Security
Interest Act, 2002, and in exercise of powers conferred under Section 13 read with
the Security Interest (Enforcement) Rules, 2002, issued demand notice/s on the
dates mentioned against each account calling upon the respective borrower/s to
repay the amount as mentioned against each account within 60 days from the date
of notice(s)/ date of receipt of the said notice(s).

:46
The borrower having failed to repay the amount, notice is hereby given to the
borrower and the public in general that the undersigned has taken possession
of the property described herein below in exercise of powers conferred on him
under sub-section (4) of Section 13 of Act read with Rule 8 of the Security

16
Interest Enforcement) Rules, 2002 on this the .......day of ….. of the year……
/20 70
The borrower’s /guarantor’s /mortgagor’s attention is invited to provisions of
sub-section (8) of section 13 of the Act in respect of time available to redeem
18
/08 790

the secured assets

The borrower/s in particular and the public in general is hereby cautioned not to deal
with the property/ies and any dealing with the property/ies will be subject to the
charge of Punjab National Bank for the amounts and interest thereon.

S. Name Name Name of Descriptio Date of Date of Amount Name of


No of the of the the n of the deman possessi out- the
. branc Accoun borrower property d on notice standin Authorise
h t (Owner mortgage notice affixed g as on d Officer/s
25

of the d the
property date of
) deman
d
notice.
1.

2.

3.

Date: (Name
Designation)
Authorised Officer
Place: Punjab National Bank

70
Annexure –15 (Revised SI-10 B)
(For publication purposes)
POSSESSION NOTICE
Common Possession Notice for Immovable Properties in case of
more than one borrower by the respective Authorised Officers
(For Immovable property)
Whereas
Punjab National Bank/ the Authorised Officer/s of the Punjab Nationa Bank under
the Securitisation and Reconstruction of Financial Assets & Enforcement of Security
Interest Act, 2002, and in exercise of powers conferred under Section 13 read with
the Security Interest (Enforcement) Rules, 2002, issued demand notice/s on the
dates mentioned against each account calling upon the respective borrower/s to
repay the amount as mentioned against each account within 60 days from the date
of notice(s)/ date of receipt of the said notice(s).

:46
The borrower having failed to repay the amount, notice is hereby given to the
borrower and the public in general that the undersigned has taken possession
of the property described herein below in exercise of powers conferred on him
under sub-section (4) of Section 13 of Act read with Rule 8 of the Security

16
Interest Enforcement) Rules, 2002 on this the .......day of ….. of the year……
/20 70
The borrower’s /guarantor’s /mortgagor’s attention is invited to provisions of
sub-section (8) of section 13 of the Act in respect of time available to redeem
18
/08 790

the secured assets

The borrower/s in particular and the public in general is hereby cautioned not to deal
with the property/ies and any dealing with the property/ies will be subject to the
charge of Punjab National Bank for the amounts and interest thereon.

S. Name Name Name of Descriptio Date of Date of Amount Name of


No of the of the the n of the deman possessi out- the
. branc Accoun borrower property d on notice standin Authorise
h t (Owner mortgage notice affixed g as on d Officer/s
25

of the d the
property date of
) deman
d
notice.
1.

2.

3.

Date: (Name
Designation)
Authorised Officer
Place: Punjab National Bank

71
Annexure –16 (Revised SI-15)

[Rule 7 (2)]

Sale Certificate
(For movable property)

Whereas
The undersigned being the Authorised Officer of the Punjab National Bank under the
Securitisation and Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 and in exercise of the powers conferred under Sub Section 4 and 12
of Section 13 read with Rule 6 & 7 of the Security Interest (Enforcement) Rules, 2002
has in consideration of the payment of Rs.________ (Rs. ___________) sold on behalf
of the Punjab National Bank in favour of __________________________ (Purchaser),

:46
the following movable property secured in favour of the Punjab National Bank by
________________(the names of the borrowers) towards the financial facility
___________________ (description) offered by/availed from Punjab National Bank. The
undersigned acknowledges the receipt of the sale price in full and hands over the

16
delivery and possession of the items listed below.
/20 70
18
Description of the movable property:
/08 790

(Name Designation)
Authorised Officer
Punjab National Bank
25

Date:
Place:

72
Annexure –17 (Revised SI-17)
[Rule 9(6)]
SALE CERTIFICATE
(For Immovable property)

Whereas

The undersigned being the Authorised Officer of the Punjab National Bank (secured
creditor) under the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 and in exercise of powers conferred under
Section 13 read with Rule 8 & 9 of the Security Interest (Enforcement) Rules, 2002 sold
on behalf of the Punjab National Bank in favour of
_____________________________________________________ (purchaser), the

:46
immovable property shown in the schedule below secured in favour of the Punjab
National Bank by ________________ (the names of the borrowers) towards the
financial facility ______________________ (description) offered by/availed from Punjab

16
National Bank. The undersigned acknowledges the receipt of the sale price viz.,
/20 70
Rs_______________(Rupees____only) in full and hands over the delivery and
possession of the scheduled property.
18
/08 790

The sale of the scheduled property was made free from all encumbrances known to the
secured creditor listed below (list I) on deposit of the money demanded by the
undersigned.
The sale of the scheduled property was made without freeing from encumbrances listed
below (list II).
25

Description of immovable property

All that part and parcel of the property consisting of Flat No. _____ /Plot
No._____________ In Survey No. ____ /City or Town Survey No. __________
/Khasra No._______________ Within the registration sub-district__________
and district ________________.

Bounded:
On the North by
On the South by

249

73
On the East by
On the West by

List I:
List of encumbrances Freed from

Encumbrances Deposit made/amount adjusted

1.

2.
List II:

:46
List of encumbrances not freed from, and subject to which sale made

1.
16
/20 70
18
2.
/08 790

(Name Designation)
Date: Authorised Officer Place:
Punjab National Bank
25

74

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