Answer: The secured creditor must consider the representation or objection of the borrower against the notice under Section 13(2) of Sarfaesi Act , 2002 and if the Secured Creditor finds that the representation or objection is not acceptable or tenable, he shall communicate within 15 days (7 days before 15.01.2013) the reasons for non – acceptance of the representation or objection to the borrower. The Supreme Court in the case of Mardia Chemicals Limited –Versus- Union of India, reported in (2004)4 Supreme Court Cases page 311, has held that there should be some meaningful consideration of the objection raised rather than to ritually reject them and proceed to take drastic measure under Sub Section 4 of Section 13 of the Sarfaesi Act , 2002.

Answer: It has been held that the period prescribed in Section 13(3A) of the Sarfaesi Act, 2002 for giving a reply to the representation or objection of the borrower is merely directory and not mandatory and Sarfaesi proceedings cannot be quashed on the ground of delay in giving reply to the representation or objection of the borrower. See Clarity Gold (P) Ltd. Limited – Versus – State Bank of India AIR 2011 Bombay page 42

Answer: If the Debts Recovery Tribunals finds that the representation or objection of the borrower was rejected without due consideration, it can set aside the steps taken under Section 13(4) of Sarfaesi Act, 2002. See the case of Suchanda Chowdhury –Versus- UCO Bank reported in AIR 2011 Calcutta Page 3

Answer: If the Secured Creditor gives a reasonless reply rejecting the representation or objection of the borrower, the Bank may be restrained from taking any further action in the matter. See the case of Raja Associates –Versus- Union of India reported in AIR 2008 Karnataka page 136.

Answer: The Proviso to Sub-Section 3A of Section 13 of Sarfaesi Act, 2002 provides that the reasons communicated by the secured creditor in its reply to the borrower does not confer any right on the borrower to move DRT under Section 17 of Sarfaesi Act, 2002. However, it has been held in the case of Prime Timbers –Versus- State Bank of India reported in AIR 2010 Calcutta page 40, that the rejection of a representation or objection can be challenged in Debts Recovery Tribunal under Section 17 of Sarfaesi Act, 2002. In other words, the rejection of a representation or objection can be challenged by the borrower at an appropriate stage, when he moves DRT under Section 17 of Sarfaesi Act, 2002 against any subsequent steps or measures like taking over of possession of the mortgaged assets or issuance of sale advertisement.

Answer: It has been held by the Calcutta High Court in the case of Prime Trimbers –Versus- State Bank of India reported in AIR 2010 Calcutta page 40 that if the borrower, in his representation proposes restructuring and the Bank rejects the proposal, the borrower can challenge the same under Section Section 17 of Sarfaesi Act, 2002 at the appropriate stage.

Answer: It has been held by the Calcutta High Court in the case of Prabir Chakraborty –Versus- State of West Bengal reported in AIR 2011 Calcutta page 118, that the representation or objection by the borrower against the notice under Section 13(2) of Sarfaesi Act, 2002 must be made within 60 days from the date of the said notice