Security Interest Enforcement Rules

Dated 3rd November, 2016 | Copy of | Notification |

  In exercise of powers conferred by sub-section (1) and clause (b) of sub-section (2) of section 38, read with sub-section (4), sub-section (10) and sub-section (12) of section 13 of the Securitisation and Asset Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002), the Central Government hereby makes following rules further to amend the Security Interest (Enforcement) Rules, 2002, namely:-

1. Short title and commencement.– (1) These rules may be called the Security Interest (Enforcement) (Amendment) Rules, 2002.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Security Interest (Enforcement) Rules, 2002, (hereinafter referred to as the principal rules), in rule 3,-

(i) in sub-rule (1), after the word “delivering”, the words, “including hand delivery,” shall be inserted;

(ii) after sub-rule (4), the following sub-rule shall be inserted, namely:–

“(5) The demand notice may invite attention of the borrower to provisions of sub-section (8) of section 13 of the Act, in respect of time available to the borrower, to redeem the secured assets.”.

3. In the principal rules, in rule 3A,–

(i) in clause (b), for the words “seven days”, the words “fifteen days”, shall be substituted;

(ii) in clause (c), for the words “one week”, the words “fifteen days”, shall be substituted.

4. In the principal rules, in rule 4, after sub-rule (2), the following sub-rules shall be inserted, namely:–

“(2A) The borrower shall be intimated by a notice, enclosing the panchnama drawn in Appendix I and the inventory made in Appendix II.

(2B) All notices under these rules may also be served upon the borrower through electronic mode of service, in addition to the modes specified under rule 3.”.

5. In the principal rules, in rule 6,–

(i) in sub-rule (1), for clause (c), the following clause shall be substituted, namely:–

“(c) holding public auction including through e-auction mode; or”;

(ii) in sub-rule (2), after the proviso, the following proviso shall be inserted, namely:–

“Provided further that if sale of movable property by any one of the methods specified under subrule (1) fails and the sale is required to be conducted again, the authorised officer shall serve, affix and publish notice of sale of not less than fifteen days to the borrower for any subsequent sale.”;

(iii) in sub-rule (3), for the words “between the parties in writing”, the words “between the secured creditors and the proposed purchaser”, shall be substituted.

6. In the principal rules, in rule 8,–

(i) after sub rule (2), the following sub-rule shall be inserted, namely:–

“(2A) All notices under these rules may also be served upon the borrower through electronic mode of service, in addition to the modes prescribed under sub-rule (1) and sub-rule (2) of rule 8.”.

(ii) in sub-rule (5), for clause (c), the following clause shall be substituted, namely:–

“(c) by holding public auction including through e-auction mode; or”;

(iii) in sub-rule (8), for the words “between the parties in writing”, the words “between the secured creditor and the proposed purchaser in writing”, shall be substituted.

7. In the principal rules, in rule 9,-

(i) for sub-rule (1), the following sub-rule shall be substituted, namely:-

“(1) No sale of immovable property under these rules, in first instance shall take place before the expiry of thirty days from the date on which the public notice of sale is published in newspapers as referred to in the proviso to sub-rule (6) of rule 8 or notice of sale has been served to the borrower:

Provided further that if sale of immovable property by any one of the methods specified by sub rule (5) of rule 8 fails and sale is required to be conducted again, the authorised officer shall serve, affix and publish notice of sale of not less than fifteen days to the borrower, for any subsequent sale.”;

(ii) in sub-rule (2), in the proviso, for the word and figure “rule 9”, the word and figure “rule 8”, shall be substituted;

(iii) for sub-rule (3), the following sub-rule shall be substituted, namely:–

“(3) On every sale of immovable property, the purchaser shall immediately, i.e. on the same day or not later than next working day, as the case may be, pay a deposit of twenty five per cent. of the amount of the sale price, which is inclusive of earnest money deposited, if any, to the authorised officer conducting the sale and in default of such deposit, the property shall be sold again”;

(iv) in sub-rule (4), for the words “as may be agreed upon in writing between the parties”, the words, “as may be agreed upon in writing between the purchaser and the secured creditor, in any case not exceeding three months” shall be substituted;

(v) in sub-rule (5), after the words, “the deposit shall be forfeited”, the words “to the secured creditor” shall be inserted.

8. In the principal rules, after rule 13, the following rule shall be inserted, namely:–

“13A. Application by lessee or tenant.– (1) Every application under sub-section (1) of section 17 filed by lessee or tenant of the secured assets shall be accompanied by a fee specified in sub-clause (c) and sub-clause (d) of sub-rule (2) of rule 13, as the case may be.

(2) The application to be made by the lessee or the tenant under sub-section (1) of section 17, shall be in the form specified in Appendix X annexed to these rules”.

9. In the principal rules, in Appendix I, after the first paragraph, the following paragraph shall be inserted, namely:–

“The borrower’s attention is invited to provisions of sub-section (8) of section 13 of the Act, in respect of time available, to redeem the secured assets.”.

10. In the principal rules, in Appendix III, for the word and figure “rule 8”, the words and figures “rule 6 and 7”, shall be substituted.

11. In the principal rules, in Appendix IV,–

(i) in the opening paragraph, for the word and figure “rule 9”, the word and figure “rule 3” shall be substituted;

(ii) for the first paragraph, the following paragraph shall be substituted, namely:-

“The borrower having failed to repay the amount, notice is hereby given to the borrower and the public in general that the undersigned has taken possession of the property described herein below in exercise of powers conferred on him under sub-section (4) of section 13 of Act read with rule 8 of the Security Interest Enforcement) Rules, 2002 on this the...... day of ..... of the year........... ”;

(iii) after the second paragraph, the following paragraph shall be inserted, namely:–

“The borrower’s attention is invited to provisions of sub-section (8) of section 13 of the Act, in respect of time available, to redeem the secured assets.”.

12. In the principal rules, in Appendix V, for the word and figure “rule 12” the words and figures “rules 8 and 9”, shall be substituted.

13. In the principal rules, after Appendix IX, the following Appendix shall be inserted, namely:–

“APPENDIX- X
[See rule 14]
(for lessee/tenants)

(Application under sub-section (1) of section 17 read with sub-section (4) of section 17 of the Act)

For use in Tribunal’s Office:
Date of filing ......................
Date of receipt by post ..............
or
Registration number ................
Signature .........................
Registrar

In the Debts Recovery Tribunal
(Name of the place)

Between:

A B.......................................                                                                                                                              Applicant(s)
       And
C D.......................................                                                                                                                              Defendant(s)

‘Delete whichever is not applicable.

Details of application:

1. Particulars of applicant:-

(i) Name of applicant:
(ii) Locus of applicant – lessee/tenant:
(iii) Address of applicant/lessee:
(iv) Address for service of all notices:

2. Particulars of the defendant/bank:-

(i) Name of the defendant/bank:
(ii) Office address of the defendant/bank:
(iii) Address for service of all notices:

3. Jurisdiction of the Tribunal:

The applicant declares that the subject matter of this application falls within the jurisdiction of the Tribunal.

4. Limitation:

The applicant further declares that this application is filed within the limitation prescribed in sub-section (1) of section 17 of the Act.

5. Locus of applicant:

Enumerate herein-nature of locus of applicant under sub-section (1) of section 17 read with section subsection (4) of section 17.

(i) Whether the applicant is a lessee or tenant:
(ii) If applicant is a lessee or tenant, furnish the following details:

6. Facts of the case:

The facts of the case are given below:-         

7. Cause of action:

8. Relief(s) sought:

In view of the facts mentioned in paragraph 5 above, the applicant prays for the following relief(s):-

[Specify below the relief(s) sought explaining the ground for relief(s) and the legal provisions (if any) relied upon as laid down under sub-section (3) of section 17]

9. Interim order, if prayed for:

Pending final decision on the application, the applicant seeks issue of the following Interim Order:-

(Give here the nature of the interim order prayed for with reasons).

10. Matter not pending with any other court, etc.:

The applicant further declares that the matter regarding which this application has been made is not pending before any court of law or any other authority or any other bench of the Tribunal.

11. Particulars of bank draft or postal order in respect of the application fee in terms of [rule 13] of these rules:

(i) Name of the bank on which drawn:
(ii) Demand draft No.:
or
(i) Number of Indian Postal Order(s):
(ii) Name of the issuing post office:
(iii) Date of issue of postal order(s):
(iv) Post office at which payable:

12. Details of index:

An index in duplicate containing the details of the documents to be relied upon is enclosed.

13. List of enclosures:-

          _____________________________________________________________________________________________

Verification

I................................................................................................... son/daughter/wife of (Name in full and block letters)

Shri........................................., the applicant/for and on behalf of the applicant hereby solemnly verify that the contents of paragraphs 1 to 11 are true to my personal knowledge and belief and that I have not suppressed any material facts.

Signature of the applicant
Place:
Date:

To
The Registrar,
..................................................
.................................................”.

Sd/-
(Anandrao V. Patil)
Jt. Secy.

S.O.1046(E)
F.No.3/10/2016-DRT
Issued by:
Ministry of Finance
(Department of Financial Services)
New Delhi

Note : The principal rules were published in the Gazette of India, Part II, Section 3, Sub-section (i) vide number S.O.1020(E), dated the 20th September 2002 and last amended vide notification number S.O.1837(E), dated the 26th October 2007.