Question 1

What is the SARFAESI Act?

Accepted Answer

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act allows banks and financial institutions to auction residential or commercial properties (security) to recover loans from defaulters without the intervention of the court.

Question 2

Can a borrower challenge actions taken under the SARFAESI Act?

Accepted Answer

Yes, a borrower or any aggrieved person can challenge the bank's measures by filing an application (appeal) before the Debt Recovery Tribunal (DRT) under Section 17 of the Act, provided they can demonstrate procedural irregularities or statutory non-compliance by the bank.

Question 3

What is the role of the Debt Recovery Tribunal (DRT)?

Accepted Answer

The DRT was established to facilitate the speedy recovery of debt payable to banks and financial institutions. It adjudicates recovery suits filed by banks (Original Applications) and appeals filed by borrowers against SARFAESI actions.

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