SARFAESI Section 13 Notice: Every Step and Time Limit
60 days to pay, 15 days for the bank to reply, 45 days to go to the DRT. Here is the full sequence.
Section 13 of the SARFAESI Act is the step-by-step route a bank follows to take and sell a secured asset when a loan turns bad. It starts with a written demand notice under section 13(2) and, if the borrower does not pay, moves to the action allowed under section 13(4).
Each step has a fixed time gap. A bank that skips one gives the borrower grounds to challenge the action before the Debts Recovery Tribunal (DRT). Take a home loan of ₹25 lakh, unpaid for six months and classified as an NPA: this is the path the bank must walk.
You save ₹200 today
- Full 100-question mocks
- Recovery law coverage
- Module-wise practice
One payment, no subscription · Valid for 2 months
The Section 13 Process, Step by Step
- 1
Loan classified as NPA
The secured loan must be in default and classified as a non-performing asset. No 13(2) notice can be sent before this.
- 2
Demand notice under section 13(2)
A written notice asking the borrower to pay the full dues within 60 days of the notice date. Section 13(3) says it must state the amount payable and the secured assets the bank plans to act against.
- 3
Borrower may object under section 13(3A)
The borrower can send a representation or objection. If the bank rejects it, the bank must communicate its reasons within 15 days of receiving it. This reply is not itself an order the borrower can take to the DRT.
- 4
Measures under section 13(4)
If the 60 days pass without full payment, the bank may take possession of the secured asset, take over management of the business, appoint a manager, or direct the borrower's own debtors to pay the bank.
- 5
Possession notice
For immovable property, the authorised officer delivers a possession notice to the borrower, fixes it on the outer door or another visible part of the property, and publishes it in two leading newspapers, one in the local language.
- 6
Magistrate's help if needed (section 14)
If the borrower resists, the bank can apply to the Chief Metropolitan Magistrate or District Magistrate, who should pass an order within 30 days. For recorded reasons this can stretch, but not beyond 60 days in total.
- 7
Valuation and sale notice
An approved valuer values the property and a reserve price is fixed. The borrower gets a 30-day notice of sale, and for an auction or tender a public notice runs in two newspapers. The sale cannot happen before 30 days from that notice.
- 8
Shortfall goes to the DRT
If the sale money does not cover the dues, section 13(10) lets the bank apply to the DRT or a competent court for the balance.
The Time Limits at a Glance
Borrower pays after demand notice
Time limit
60 days from the notice date
Section
13(2)
Bank replies to a rejected objection
Time limit
Within 15 days of receiving it
Section
13(3A)
Magistrate's order for possession
Time limit
30 days, at most 60 in total
Section
14
Notice of sale to the borrower
Time limit
30 days
Section
Rule 8(6), Security Interest (Enforcement) Rules
Borrower applies to the DRT against a 13(4) measure
Time limit
Within 45 days of the measure
Section
17(1)
| Step | Time limit | Section |
|---|---|---|
| Borrower pays after demand notice | 60 days from the notice date | 13(2) |
| Bank replies to a rejected objection | Within 15 days of receiving it | 13(3A) |
| Magistrate's order for possession | 30 days, at most 60 in total | 14 |
| Notice of sale to the borrower | 30 days | Rule 8(6), Security Interest (Enforcement) Rules |
| Borrower applies to the DRT against a 13(4) measure | Within 45 days of the measure | 17(1) |
The Borrower's Last Chance to Redeem
Under section 13(8), if the borrower pays the full dues plus the bank's costs before the bank publishes the notice of public auction, tender or quotation, the bank cannot sell the asset. Once that notice is published, this right under section 13(8) is gone.
Quick practice on banking basics. No signup.
What the Borrower Cannot Do After the Notice
- check_circleSection 13(13): after receiving the 13(2) notice, the borrower cannot sell, lease or otherwise transfer any secured asset named in it without the bank's written consent.
- check_circleThe only exception is a transfer in the ordinary course of business, such as a trader selling stock.
How the DRA Exam Tests This
This topic produces number questions: 60 days for the demand notice, 15 days for the bank's reply to an objection, 45 days to approach the DRT. The common trap is mixing them up, for example picking 45 days for the notice or 60 days for the DRT application.
A second trap is order of steps. A question may ask what must happen before a 13(2) notice can be sent. The answer is NPA classification, not a court order: SARFAESI needs no court before action.
FAQs
How many days does a SARFAESI 13(2) notice give?expand_more
60 days from the date of the notice to pay the full dues. If you do not pay in that time, the bank can take the steps under section 13(4).
What is the difference between a 13(2) and a 13(4) notice?expand_more
The 13(2) notice is the demand: pay within 60 days. The 13(4) stage is the action after that period, such as taking possession, which is announced through a possession notice.
Can I stop the auction by paying the dues?expand_more
Under section 13(8), paying the full dues and the bank's costs before the auction or tender notice is published stops the sale. After publication, that statutory right no longer applies.
Where do I complain if the bank did not follow the SARFAESI steps?expand_more
To the Debts Recovery Tribunal, under section 17, within 45 days of the possession or other measure being taken.
Next steps
- SARFAESI Actarrow_forward
- DRTarrow_forward
- NPA Classificationarrow_forward
- Vehicle Repossessionarrow_forward
100 questions, 2 hours, scored instantly.