Under the SARFAESI Act, 2002, banks take possession of secured assets from defaulting borrowers by issuing a 60-day demand notice under Section 13(2). If the debt is not repaid, the bank issues a possession notice (symbolic possession) under Section 13(4), followed by physical possession via a Magistrate under Section 14. [1, 2, 3] 


Step-by-Step Possession Procedure:

1. : The loan account is classified as a Non-Performing Asset (NPA) following default.
2. : The bank issues a written 60-day notice to the borrower demanding repayment.
3. Borrower Response: The borrower has 60 days to repay the dues or file objections.
4. : If the borrower fails to comply, the bank takes “symbolic possession” by delivering a notice to the borrower and publishing it in two newspapers.
5. : For physical possession, the bank applies to the Chief Metropolitan Magistrate or District Magistrate (DM).
6. : The DM appoints a Tehsildar or court commissioner to take physical possession of the asset and its documents.
7. : The authorized officer takes over the property, often photographing and inventorying it, and securing the keys. [2, 3, 4, 5, 6, 7, 8] 

Key Takeaways:

• No Court Intervention: The process allows seizure without immediate court intervention.
• Notice Period: 60 days must pass after the demand notice before taking possession.
• Appeal Right: Borrowers can appeal the possession notice (Section 13(4)) at the Debt Recovery Tribunal (DRT) within 45 days.
• Legal Protection: Actions taken by the DM under Section 14 cannot be challenged in lower courts. [1, 5, 7, 9, 10] 

AI can make mistakes, so double-check responses

[1] https://www.bajajfinserv.in/sarfaesi-act
[2] https://www.bajajfinserv.in/understanding-sec-13-4-of-sarfaesi-act
[3] https://www.bajajfinserv.in/understanding-sec-14-of-sarfaesi-act
[4] https://ibclaw.in/procedure-for-sale-of-immovable-assets-under-sarfaesi-act-2002/
[5] https://www.youtube.com/watch?v=43W01oKt1Cw
[6] https://ikfhomefinance.com/files/Sarfaesi.pdf
[7] https://www.bajajfinserv.in/understanding-sarfaesi-act-section-13
[8] https://cleartax.in/s/sarfaesi-act-2002
[9] https://finlender.com/the-sarfaesi-act-step-by-step-procedure-for-asset-seizure/
[10] https://indiankanoon.org/doc/57488768/

Bank Taking Possession under Sarfaesi