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Provision of Representation Under Section 13(3) of the SARFAESI Act, 2002

Under the SARFAESI Act, 2002, borrowers are granted a right to challenge the demand notice issued by the secured creditor. This is specifically provided under Section 13(3), which outlines the process for making a representation or raising objections following the receipt of a demand notice under Section 13(2). 

Here’s a detailed breakdown of the key provisions: 

1. Right to Representation: When a borrower receives a demand notice under Section 13(2) of the SARFAESI Act, they have the right to make a representation or raise objections to the secured creditor. This gives the borrower a fair opportunity to challenge the claim or present any concerns regarding the demand. Borrowers should provide supporting documentation or evidence to back their representation or objections. 

2. Timeframe for Borrower’s Representation: The borrower must submit the representation or objections within 60 days from the date of receipt of the demand notice. Failing to do so within the prescribed period could impact the borrower’s ability to challenge the claim effectively. 

3. Secured Creditor’s Obligation: Once the borrower submits the representation or objection, the secured creditor is required to review and consider it. If the secured creditor determines that the representation or objection is not valid or is unsubstantiated, they are obligated to communicate the reasons for not accepting it to the borrower. This must be done within 15 days of receiving the representation or objection, as per Section 13(3-A). 

4. Purpose of the Provision: The primary purpose of this provision is to ensure that borrowers have an opportunity to present their case or raise any valid objections before the secured creditor moves forward with enforcement actions under Section 13(4) of the SARFAESI Act. It aims to protect the rights of the borrower and provide a mechanism for fair dispute resolution before further steps are taken to enforce the debt. 

This provision is essential for promoting transparency and ensuring that borrowers have a platform to address any grievances or discrepancies before any legal action is initiated.