Legal Question in Banking Law in India
dear sir,
sarfasi notice U/s13(2), is it a just notice or a decree by the authorised signatory? i feel it is a decree. since the bank authorities will go for auction if the loan is not cleared (in simple terms leave apart DRT and other litigations)
2 Answers from Attorneys
You are correct in a practical fashion. However even the legal consequence upon default is the same as a decree only.
it is immaterial whether or not it is a decree. If there are no proper grounds to reply to the said notice, the Bank can proceed further under Sec.13(4) of the Act. A decree unless set aside by the same court or higher court is binding on the person against whom it is decreed. Whereas, a notice under Sec.13(2) can be replied if there is no valid security interest or that the amount mentioned in wrong or it is time barred etc.
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