Section 13(4) of the SARFAESI Act (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002) empowers banks and financial institutions to seize and sell a borrower's secured assets if they default on a loan. This provision enables lenders to recover Non-Performing Assets (NPAs) without court intervention.
Key Aspects of Section 13(4):
- Legal Authority: Allows lenders to take possession of mortgaged property if the borrower fails to repay.
- No Court Approval Required: Banks can act directly after giving prior notice under Section 13(2).
- Options for Lenders: They can sell, lease, or assign the asset to recover dues.
- Borrower’s Rights: Borrowers can appeal to the Debt Recovery Tribunal (DRT) within 45 days.
- Speeds Up Recovery: Helps financial institutions manage NPAs efficiently.
This section provides a structured approach to loan recovery while safeguarding borrower rights. Borrowers should be aware of their legal options if served with a notice under Section 13(4) of the SARFAESI Act.