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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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(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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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.
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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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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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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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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.
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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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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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,
• 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:
The Board, vide Resolution No. 36, passed in its meeting held on
26.06.2012, approved following revised guidelines:
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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,
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“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”.
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.
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:
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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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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.
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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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..
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.
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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.
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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
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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
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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
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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.
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.
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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
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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
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be and still bank can either move the court of the DM/CMM for getting
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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.
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).
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7 FIXATION OF RESERVE PRICE:
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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
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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:
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(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.
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(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.
(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
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shall seek approval from the Committee at Circle Office and in case of LCB from
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the ZM.
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(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:
(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,
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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.
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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
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movable as well as immovable secured assets can be sold by any of the
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following methods:
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(a) By obtaining quotations from the parties / persons dealing with similar
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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
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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.
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(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.
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amended vide Govt. Notification dated 03.11.16 and states that:
“On every sale of immovable property, the purchaser shall immediately i.e on
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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
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conducting the sale and in default of such deposit, the property shall be sold
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again.”
“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
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may be agreed upon in writing between the purchaser and the secured
creditor, in any case not exceeding three months”.
“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.
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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.
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iv. Sale of Movable Assets- Payment of Sale Consideration, Confirmation of
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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.
The above mentioned Committees will confirm the sale of secured assets
(compulsorily for immovable property), in the capacity of secured creditor.
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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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“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
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”.
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,
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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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10.2 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
(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
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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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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.
12.1 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
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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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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
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.
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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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.
(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.
(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.
13.4 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.”
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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.
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.
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).
:46
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.
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:
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.
14.3. Publicity
In the current scenario, publicity plays a vital role to make an E-Auction a
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successful event. Publicity can be bifurcated mainly into two parts:
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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www.pnbindia.in
25
&
www.tenders.gov.in
www.pnbindia.biz
(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.
(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.
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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
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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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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
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.
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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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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.
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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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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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“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.”
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.
: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:
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
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.
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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
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
(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.
: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
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remain operative.
18
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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:
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
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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
17.3 The DRT heard the agreements of both the sides and observed /ordered as follows
in its hearing in February, 2014:
: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
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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
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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.
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
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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
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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
+++
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,
: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:
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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 ___________.
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.
: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
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statutory injunction/restraint, as provided under the said Act, is an offence.
18
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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.
*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
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M/s______________________________________
M/s __________________________________________________
18
/08 790
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.
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
_____________________
_____________________
25
(Name Designation)
AUTHORISED OFFICER
Copy to:
____________________
43
Annexure-3
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
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Us Services Products Services Services Care
STEP 2
18
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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
Track Consignments
Track All Mail Items
After entering the 13 digit consignment number, Click “Go” icon to view results.
44
Registered Mail RX123456789IN 13
Express Parcel Post XX000000000XX 13
STEP 4
When 13 digit consignment number is entered and button “Go” is pressed,
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)
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
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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.
+++
:46
16
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18
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25
46
Annexure-4
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.
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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.
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47
STEP-1 Open your E-Mail and go to Menu Option >>Tools<< , which is
available on the top left side.
:46
16
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18
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25
48
STEP-2 On the Tools menu, click “Options” and then under E-Mail, Click “E-
mail options”
:46
16
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18
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25
49
STEP-3 .Under Message handling, click “Tracking Options”
:46
16
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18
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25
50
Step-4 Select the Read receipt or the Delivery receipt /or both of the check box.
:46
16
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18
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25
+++++
51
Annexure-5
: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
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.
++++
:46
16
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18
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25
53
Annexure-6 (Revised SI-7A)
PANCHNAMA
(Minutes/Panchnama when borrower readily delivers possession)
WHEREAS We,
:46
were present at ________________________________________.
16
payment of the dues mentioned in the Demand Notice dated __________ in respect of
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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
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
: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
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_________________(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-
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payment, has taken over possession of secured assets, as detailed in the inventory
attached to this Panchnama between the hours_________ and____________ in our
presence.
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
: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)
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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.
_____________________________________________________________________
______________________________________________.
(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.
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
:46
____________________________.
16
We declare and state that the ‘Authorised Officer’ in exercise of Powers under Section
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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)
:46
Bank” which term shall include its successors and assigns).
16
WHEREAS the Borrower has availed, inter alia, the following
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facility/ies from the Bank :
______________________________________________________
18
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______________________________________________________
______________________________________________________
Describe the WHEREAS the above said facility/ies has/have been secured
facilities availed by the following securities :
______________________________________________________
______________________________________________________
______________________________________________________
25
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 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
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_________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.
:46
decision in this regard will be final and binding upon borrower.
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
For ………………
Delete whichever
____________
25
is not applicable
(BORROWER)
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 _________________
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_________________________________, 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)
:46
Bank” which term shall include its successors and assigns).
16
WHEREAS the Borrower has availed, inter alia, the following
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facility/ies from the Bank :
____________________________________________________
18
/08 790
____________________________________________________
____________________________________________________
WHEREAS the abovesaid facility/ies has/have been secured by
the following securities :
____________________________________________________
____________________________________________________
____________________________________________________
25
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 ____________________.
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
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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.
63
For ………………
_________
(BORROWER)
:46
(AUTHORISED SIGNATORY)
16
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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
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_________________ _________________________________, 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
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
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
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
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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
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
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
________________________________________________________
68
All that part and parcel of the property consisting of Flat No. /Plot
No._____________ In Survey No. __ /City or Town Survey No.
Bounded:
On the North by
On the South by
On the East by
On the West by
:46
16 .………………….
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DATE:
18
(Name Designation)
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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……
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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 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.
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).
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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 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.
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.
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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
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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.,
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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
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
1.
2.
List II:
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List of encumbrances not freed from, and subject to which sale made
1.
16
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18
2.
/08 790
(Name Designation)
Date: Authorised Officer Place:
Punjab National Bank
25
74