Legal Question in Banking Law in India
Sarfeasi act 2002
sir i want to know
!)limitation of the SARFEASI Act.2002.13(2).
2)If any money suite done by any bank. in the same time this act can be apply simultaniously? if yes how?
2 Answers from Attorneys
Re: Sarfeasi act 2002
I presume that the querist wants to know as to the period of limitation within which to invoke the rights of a Bank. you may refer to Sec.36 of the SARFAESI Act which lays down that no secured creditor shall be entitled to take all or any of the measures, unless his claim in respect of the financial asset is made within the period of limitation prescribed under the Limitation Act of 1963. This section has not been properly conceived as no period of limitation has been prescribed in the Liimitation Act, 1963 for enforcing the remedies under the SARFAESI Act. In the kind of ambiguity it has posed, only way to interpret the effect of the section is that if the bank or financial institution wants to proceed under the Act and if the financial asset is movable property it has to be done within three years from the date when the amount has become due and in the case of mortgage of immovable property within 12 years as the Limitation Act prescribes a period of 12 years for filing a suit to enforce a mortage.
Regarding the second question, if the debt is Rs.10 lakhs or above, the remedies of proceeding under the DRT Act and the SARFAESI Act can be simultaenously resorted to. If the debt is below Rs.10 lakhs, both suit and proceeding under SARFAESI Act can be embarked upon simultaneously. But in actual practice, banks would not be going in for filing for recovery before DRT or filing of suit in Civil court, when they can without incurring expenses for those remedies recover the dues by first proceeding under the SARFAESI Act and would not proceed simultaneously.
Re: Sarfeasi act 2002
Limitation would be same as governed by the Limitation Act. Bank / FIs can pursue both remedies simultaneously.
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