Section 13(4) notice is the possession notice issued by the bank after the borrower fails to repay within 60 days. It authorizes the bank to take symbolic or physical possession of the secured asset.
Introduction
Section 13(4) of the SARFAESI Act, 2002 is the provision that empowers the bank to take possession of the secured asset when the borrower fails to repay the outstanding amount within the 60 days given under Section 13(2).
- Authorizes possession of secured asset
- Can be symbolic or physical possession
- Must follow Rule 8 & 9 of SARFAESI Rules
- Must be published in newspapers
What is Section 13(4) Notice?
Section 13(4) notice is a possession notice issued by the bank to take possession of the secured asset. It is issued when the borrower fails to repay within the 60-day period under Section 13(2).
Legal Provisions
The key provisions of Section 13(4) are:
- Trigger: Borrower fails to repay within 60 days
- Action: Bank can take possession of secured asset
- Rights: Bank can transfer by lease, assignment, or sale
- Rules: Must follow Rule 8 & 9 of SARFAESI Rules
Types of Possession
Symbolic Possession
Taking possession through a notice and affixing it on the property. The physical possession remains with the borrower but the bank has legal possession.
⏱️ Day 1 of possessionPhysical Possession
Taking actual physical possession of the asset. The bank takes control of the property and can secure it.
⏱️ After 30 daysSymbolic possession is the first step. Physical possession follows after 30 days of symbolic possession notice.
Possession Process Steps
Issue Possession Notice
Bank issues possession notice under Section 13(4) to the borrower.
Affix Notice on Property
Notice is affixed on the conspicuous part of the property as per Rule 8(1).
Publish in Newspapers
Publish possession notice in two leading newspapers (one vernacular) within 7 days.
⏱️ 7 daysTake Symbolic Possession
Bank takes symbolic possession of the asset.
Take Physical Possession
Bank takes physical possession after 30 days from symbolic possession notice.
⏱️ 30 daysPublication Rules
- Language: One English newspaper + one vernacular newspaper
- Circulation: Sufficient circulation in the locality
- Timeline: Within 7 days of taking possession
Section 13(4) Compliance Checklist
- ✅ Possession notice issued to borrower
- ✅ Notice affixed on property
- ✅ Published in two newspapers
- ✅ Symbolic possession taken
- ✅ Physical possession taken (if applicable)
- ✅ All timelines complied with
FAQs on Section 13(4)
What is symbolic possession?
Taking possession through notice without physical occupation.
What is physical possession?
Taking actual physical control of the asset.
How long after symbolic possession can physical possession be taken?
After 30 days of symbolic possession notice.
Can the borrower challenge Section 13(4) notice?
Yes, under Section 17 before DRT within 45 days.
Section 13(4) is a powerful tool for banks to take possession of secured assets. Proper compliance with Rules 8 and 9 is essential for valid possession.
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