SARFAESI Act Legal Services – Protecting Creditors’ Rights with Legal Precision
📌 Introduction:
If you're a financial institution, asset reconstruction company, or borrower involved in a loan default situation, the SARFAESI Act (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act), 2002 is your key legal tool. This Act empowers banks and financial institutions to enforce security interests without court intervention—saving precious time, effort, and costs.
As a professional legal service provider, we help both creditors and borrowers navigate SARFAESI-related proceedings with expert guidance, documentation, and representation—ensuring your interests are protected and justice is efficiently served.
🔍 Scope of Our SARFAESI Legal Services:
We offer specialized assistance in:
Legal Notices (Section 13(2)): Drafting and serving notices to defaulting borrowers on behalf of banks or advising borrowers on appropriate responses.
Possession Proceedings (Section 13(4)): Assisting with legal possession of mortgaged property or opposing unlawful possession.
Appeals to DRT (Debt Recovery Tribunal): Filing appeals under Section 17 for aggrieved borrowers or representing financial institutions.
Stay Orders & Injunctions: Securing interim reliefs and preventing illegal dispossession.
Auction Sale & Recovery Process: Legal support in property valuation, auction compliance, and recovery mechanisms.
🔄 Types of SARFAESI Cases We Handle:
For Banks & Financial Institutions:
Non-Performing Asset (NPA) recovery
Enforcement of security interest
Representation before DRT & DRAT
Sale of assets under auction
For Borrowers/Defaulters:
Unlawful possession defense
Relief against wrongful auction or valuation
Filing appeal for debt restructuring
Negotiation & settlement facilitation
⚖️ Legal Levels Involved:
Initiation Stage: Issuance of notice under Section 13(2)
Action Stage: Taking possession or managing secured assets under Section 13(4)
Appeal Stage: Filing applications under Section 17 before DRT (Debt Recovery Tribunal)
Further Appeal: Under Section 18 to DRAT (Debt Recovery Appellate Tribunal)
🔍 Detailed Overview of the SARFAESI Act:
📘 Full Form:
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
🏦 Applicable to:
Scheduled Commercial Banks
Financial Institutions
Asset Reconstruction Companies (ARCs)
NBFCs (above specified asset size threshold, subject to RBI notification)
⚙️ Key Objectives of the SARFAESI Act:
Empower banks to recover Non-Performing Assets (NPAs) without court involvement
Facilitate securitization and reconstruction of financial assets
Improve financial discipline among borrowers
Speed up recovery of defaulted loans
Reduce burden on civil courts and tribunals
🧩 Key Provisions at a Glance:
Loan agreement and sanction letter
Default notice and account statement
Security documents (mortgage deed, hypothecation, etc.)
Copy of Section 13(2) & 13(4) notices
Valuation report of secured asset
Borrower’s response (if any)
⚖️ Borrower’s Rights Under the Act:
Right to receive 60 days’ notice before enforcement action
Right to file a representation or objection to the notice
Right to appeal before DRT if aggrieved by action taken under Section 13(4)
Right to claim damages in case of wrongful possession or undervalued sale
⚠️ Limitations of SARFAESI Act:
Not applicable to:
Agricultural land
Loans below ₹1 lakh
Unsecured loans
Only available to secured creditors
Can be challenged under constitutional law if due process is violated
📝 Our Assistance Covers:
Drafting & reviewing SARFAESI notices
Filing petitions before Magistrate, DRT, DRAT
Challenging auctions, possession, or undervaluation
Representing in settlement negotiations & debt restructuring
Advising on SARFAESI compliance and documentation
🌐 Industries We Serve:
Real Estate & Construction
MSMEs and Large Corporates
Housing Finance & NBFCs
Individual & Commercial Borrowers
ARCs and Debt Recovery Agents
| Section | Purpose |
| 13(2) | Notice to defaulting borrower to clear dues within 60 days |
| 13(4) | Possession of secured asset, management of the business |
| 14 | Magistrate’s assistance to take physical possession |
| 17 | Appeal by aggrieved party to DRT |
| 18 | Further appeal to DRAT |