All NotesCorporate LawSARFAESI Act, 2002

SARFAESI Act, 2002

SARFAESI Time Limits: A Complete Revision Chart

SARFAESI is a statute of deadlines. The creditor must wait, reply and give notice within fixed periods, and the borrower must challenge within fixed periods, and examiners test the numbers directly. This note gathers every time limit in the Act and the Enforcement Rules into two charts, enforcement and remedies, and flags the figures most often confused.

1. Enforcement Time Limits

From demand notice to sale

Figure 1: From demand notice to sale

  • Notice and reply. 60 days to pay under s.13(2); reasons for rejecting an objection within 15 days under s.13(3A), enlarged from one week by the amendment in force from 15 January 2013 (Topics 26, 27)
  • Possession. Possession notice published within 7 days of taking possession (Rule 8(2)); the s.14 Magistrate to act within 30 days, extendable to 60, a directory limit added in 2016 (Topic 29)
  • Sale. 30 days' notice before the first sale, 15 days for a re-sale after a failed one; the buyer pays 25% at once and the balance by the 15th day of confirmation, extendable by written agreement up to 3 months (Topic 25)
  • Redemption. The borrower may redeem only until publication of the sale notice, s.13(8) as amended in 2016 (Topic 30)

2. Remedy Time Limits

Challenge, disposal and appeal

Figure 2: Challenge, disposal and appeal

  • Application to the DRT. Within 45 days from the date the s.13(4) measure was taken, s.17(1) (Topic 35)
  • Disposal by the DRT. Within 60 days, extendable for reasons to 4 months in aggregate, s.17(5); beyond that any party may ask the DRAT to direct expeditious disposal, s.17(6) (Topic 36)
  • Appeal to the DRAT. Within 30 days from receipt of the order, s.18(1), with the 50% pre-deposit (Topics 38, 39)
  • Limitation for enforcement. s.36: no measure unless the claim is within limitation; 12 years for a mortgage under Article 62 (Topic 47)

⚠ Exam trap

Three figures cause most errors. The borrower gets 60 days under the s.13(2) notice, and the DRT also gets 60 days to decide, extendable to 4 months: do not mix the two. The s.17 application is 45 days but the s.18 appeal only 30. And 15 days appears three times: reasons under s.13(3A), the balance price under Rule 9(4), and notice of a re-sale under Rule 9(1).

3. Frequently Asked Questions

What are the main time limits a secured creditor must observe under SARFAESI?

The creditor must give the borrower sixty days under the Section 13(2) notice, and must communicate reasons within fifteen days if it rejects the borrower's objection under Section 13(3A). After taking possession it must publish the possession notice within seven days under Rule 8(2). Before the first sale of immovable property it must give thirty days' notice under Rules 8(6) and 9(1), reduced to fifteen days for a re-sale after a failed attempt.

What are the time limits for a borrower's challenge under SARFAESI?

An application to the Debt Recovery Tribunal under Section 17 must be made within forty-five days from the date the Section 13(4) measure was taken. The Tribunal should decide it within sixty days, extendable to four months in aggregate, and if it does not, any party may approach the Appellate Tribunal for a direction to dispose of it expeditiously. An appeal to the Appellate Tribunal under Section 18 lies within thirty days from receipt of the order, on depositing fifty per cent of the debt.

4. Related Topics

  • Topic 86: Key Figures and Percentages. The numbers that sit beside these deadlines.
  • Topic 69: Borrower's Remedies. The remedies these periods govern.