Introduction

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’) provides for methods that can be undertaken by a secured creditor to recover its dues in case of a default. The main provision under the SARFAESI Act is Section 13 relating to ‘Enforcement of Security Interest’ describing the manner, timelines and procedures within which the secured creditors can enforce their rights to recover their dues against a Non-Performing Asset (‘NPA’).

The secured creditors through the authorised officer[1] can recover their dues by auctioning the immovable secured assets in the manner and procedure given under Rule 8 and Rule 9 of the Security Interest (Enforcement) Rules, 2002 (‘Security Enforcement Rules’).

The authorised officer before conducting the sale of secured immovable property, will have to serve to the borrower a notice of thirty days for sale of the immovable secured assets[2] and no sale of the such property can be conducted before the expiry of thirty days from the date on which the public notice of sale is published in newspapers, as per the proviso to sub-rule (6) of rule 8 or notice of sale has been served to the borrower.[3]

From the bare perusal of the present law, we can infer that the secured creditors are required to serve a thirty-day notice before conducting the sale of the immovable secured assets and no sale can be conducted before the expiry of thirty days. Furthermore, if sale of immovable property by any one of the methods specified by Rule 8(5) fails and sale is required to be conducted again, the authorised officer will serve, affix, and publish notice of sale of not less than fifteen days to the borrower, for any subsequent sale.[4]

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