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Reply to Representation / Objection raised by the borrower under Section 13(3-A) of SARFAESI Act.

The aforesaid Clause was inserted by the Central Govt. on 02.02.2007 after the judgment delivered by Supreme Court of India in the matter of Maradia Chemicals Ltd.

Section 13(3-A) says that, if on receipt of the notice under Section 13(2), the borrower makes any representation or raises any objection, the secured creditor shall consider such representation or objection and if the secured creditor comes to the conclusion that such representation or objection is not acceptable or tenable, he shall communicate within fifteen days of receipt of such representation or objection the reason for non acceptance of the representation or objection to the borrower. 

Thus, it is a mandatory to the Authorized Officer to reply to the objections raised by the borrower under Section 13 (3-A) within fifteen days from the receipt of such representation or objection. In case of failure, DRT have right to set aside the action initiated by the secured creditor under Section 13(4) of the SARFAESI Act for possession and disposal of assets for the recovery of dues.

Reff: Malhotra Tractors v/s. Chief Manager SBI, Faizabad AIR 2009 Allahabad 150

• It is also upheld in the matter of Kirandevi Bansal v/s. Deputy General Manager, 2009 (2) GLH 1 (Gujarat) 

The time limit of fifteen days prescribed under Section 13(3-A) of SARFAESI Act is only a directory. The period of fifteen days is only directory provision and non compliance of time limit as such will not vitiate the proceedings provided the reason for rejection of the objection is communicated to the borrower before taking action under Section 13(4).