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Enforcement of Security Interest
The SARFAESI Act empowers bank and financial institutions to enforce securities in the event of default of borrower without intervention of either civil court or the DRT.
Any person, including borrower, aggrieved by the any of the measures taken by the SC or his authorised officer for taking possession of the security may apply to the DRT with prescribed fees within 45 Days.
If application by borrower, he has to deposit 50% of the amount claimed in the notice under Section 13(2) of the SARFAESI Act.
The DRT has to dispose of the application within 60 Days. If not possible, then DRT has to record reasons for delay but such delay should not be beyond 4 Months
Exclusions of possessory securities to which act is NOT APPLICABLE
1. A Lien on any goods, money or security given by or under the Indian Contract Act, 1872.
2. A pledge of moveable within meaning of Section 172 of the Indian Contract Act, 1872.
3. Any conditional sale, hire-purchase or lease or any other contract in which security interest has been created.
4. Any rights of unpaid seller.
5. Any security interest for securing repayment of any financial asset not exceeding Rs. 1 Lakh rupees.
6. Any security interest created on agricultural land.
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