Clear all pending applications under SARFAESI Act within 60 days: Finance Deptt to DMs in J&K

Section 14 of SARFAESI Act mandates District Magistrate to deliver possession of a secured asset within 30 days, extendable to an aggregate of 60 days upon reasons recorded in writing, to banks.

“Department of Financial Services, Ministry of Finance, Government of India has intimated that applications filed under Section 14 of the SARFAESI Act by the Banks and financial institutions with district magistrates often remain pending with them for more than 60 days. A district wise list of applications from public sector banks pending for more than 60 days as on 30.09.2020 in UT of J&K has been forwarded by the Ministry of Finance,” reads a communique of Finance Department, government of Jammu and Kashmir to all the Deputy Commissioners of the Union Territory.

“Accordingly I am directed to request all district magistrates to coordinate with relevant banks/financial institutions in recovering dues from defaulters and clear all the pending applications u/s14 of the SARFAESI Act well with the prescribed period of 60 days.”

“All applications u/s 14 of the Act filed by various banks and financial institutions where time limit of 60 days have already lapsed may be cleared within a week positively and a report in this behalf be shared with the finance department so that same is forwarded to Department of Financial Services, Ministry of Finance, Government of India,” it reads.

Passed by Parliament in 2002, SARFAESI Act states: “If borrower of financial assistance makes any default in repayment of loan or any installment and his account is classified as non-performing asset by secured creditor, then secured creditor may require before expiry of period of limitation by written notice to the borrower for repayment of due in full within 60 days by clearly stating amount due and intention for enforcement.”

“Where he does not discharge dues in full within 60 days, then without intervention of any court or tribunal secured creditor may take possession (including sale, lease and assignment) of secured asset, or take over management of business of borrower or appoint manager for secured asset or without taking any of these actions may also proceed against guarantor or sell the pledged asset, if any,” the Act says.