Assets & liabilities

Fixed Assets :
Assets which are purchased for long term and not meant to be
sold but used for production.
Land & Building,Plant & Machinery
Vehicles,Furniture & Fixture
Office equipment,Capital Work in Progress These are
represented as under:
Original value (Gross Bock) Less depreciation
Net Block or book value or written down
Value Method
Long term liabilities:
Liabilities which are not due for payment within 12
months from the date of the Balance Sheet)
Term loans from financial institutions;
Term loan from banks; Debentures/Bonds;
Deferred payment liability;Preference Shares
redeemable within 12 years;
Fixed Deposits maturing after one year;
Provision for gratuity; Unsecured Loans
Non Current Assets:
Assets which cannot be classified as current or
fixed or intangible assets Book Debts or Sundry Debtors more
than 6 months old/ Disputed Debts, Investment of long term
nature in shares,
govt. securities, associates or sister firms or
companies. Long term security deposits. Unquoted
investments; Investments in subsidiaries or sister concerns;
Loans & Advances to directors, officers; Accounts receivables in
respect of sale of plant &
machinery; Advances to concerns in which directors are
interested; Deposits with customs port trust etc
Intangible & fictitious Assets Which do not have physical
existence. For example: Goodwill, Patents, Trade Mark, Copy
Right, Preliminary or pre operative expenses,

Fixed Assets :
Assets which are purchased for long term and not meant to be
sold but used for production.
Land & Building,Plant & Machinery
Vehicles,Furniture & Fixture
Office equipment,Capital Work in Progress These are
represented as under:
Original value (Gross Bock) Less depreciation
Net Block or book value or written down
Value Method
Long term liabilities:
Liabilities which are not due for payment within 12
months from the date of the Balance Sheet)
Term loans from financial institutions;
Term loan from banks; Debentures/Bonds;
Deferred payment liability;Preference Shares
redeemable within 12 years;
Fixed Deposits maturing after one year;
Provision for gratuity; Unsecured Loans
Non Current Assets:
Assets which cannot be classified as current or
fixed or intangible assets Book Debts or Sundry Debtors more
than 6 months old/ Disputed Debts, Investment of long term
nature in shares,
govt. securities, associates or sister firms or
companies. Long term security deposits. Unquoted
investments; Investments in subsidiaries or sister concerns;
Loans & Advances to directors, officers; Accounts receivables in
respect of sale of plant &
machinery; Advances to concerns in which directors are
interested; Deposits with customs port trust etc
Intangible & fictitious Assets Which do not have physical
existence. For example: Goodwill, Patents, Trade Mark, Copy
Right, Preliminary or pre operative expenses,

Short term or CurrentyLiabilities :
Liabilities which are due for payment within 12 months
from the date of the balance sheet and are to be repaid
out of proceeds of current assets,Short term borrowings
from banks (C/C, 0/D or B/P, B/D limits) for working
capital.,Sundry/trade creditors/creditors/ Account
payable,Bills Payable / trade acceptances
Fixed Deposits from public payable within one
year,Short duration loans or deposits
Provision for taxation, Proposed Dividends, Provision for
bonus, unclaimed dividend.
Deposits from dealers, selling agents etc.
Advance payments from customers,
outstanding expenses and Accruals e.g. wages &
salaries, rent; expenses payable
Current Assets :
Cash in hand, Bank balance
including fixed ,deposits with banks. Stocks/inventory (such as
raw material, stock in process, finished goods, consumable
stores and spares),Book debts/Sundry debtors/Bills Receivable/
Accounts receivable/ debtors, Government and other trustee
securities
(other than for long term purposes e.g. sinking funds, gratuity
funds etc.),Readily Marketable/quoted govt. or other securities
meant for sale,Interest accrued and
receivables,Advance payment of taxes,
pre-paid expenses,Advance payments for merchandise;
unexpired insurance

Mortgage

Mortgage

. Mortgage is defined in Section 58 of the Transfer of Property Act.
2. Mortgage is the transfer of interest in a specific immovable property, for the purpose of securing an existing or future debt or
for the performance of an engagement which may give rise to a pecuniary liability. The person creating the mortgage is called as
the mortgagor and the person in whose favour mortgage is created (bank) is called as the mortgagee.
3. Immovable property, means land and things attached or permanently fastened to the earth.
4. Types of Mortgage: There are six types of mortgages namely (i) Simple Mortgage (ii) Mortgage by Conditional Sale (iii)
Usufructuary Mortgage (iv) English Mortgage (v) Mortgage by Deposit of title Deeds (Equitable Mortgage) and (vi). Anamalous
Mortgage. Of these, all • mortgages except Equitable Mortgage require registration with the Registrar of Assurances.
5. Registered Mortgage: In the case of registered mortgage (also called legal mortgage) first a mortgage deed is written which is
stamped as per Stamp Act of the concerned state. The deed is then executed in the presence of two witnesses. Thereafter, in
terms of the Indian Registration Act 1908, it is to be registered with the Registrar of Assurances (Sub Registrar) within 4 months of
the execution.
6. Simple Mortgage: In simple mortgage the mortgagor makes himself personally liable to pay the debt and agrees that in the
event of failing to pay according to his contract, mortgagee can get the property sold through the intervention of the court. If after
sale of property some debt is still outstanding, the borrower shall be- personally liable for the outstanding amount. Neither the
possession nor ownership of the property is transferred to the mortgagee. The mortgagee cannot exercise the right of foreclosure.
7. Mortgage by Conditional Sale: The mortgagor ostensibly sells the property to the mortgagee upon the condition that if the
debt is paid in time the property will be transferred back to him and in case of nonpayment within the specified time the
transaction would become a real sale. There is no personal liability of the mortgagor. In case of default, the mortgagee can exercise
his right of foreclosure through court.
8. Usufructuary Mortgage: In this mortgage, possession of the property is transferred to the mortgagee. The mortgage money is
recovered through income of the mortgaged property. There is no personal liability of mortgagor.
9. English Mortgage: As in the case of simple mortgage, the mortgagor undertakes personal liability to pay the debt. He transfers
the ownership of mortgaged property to the mortgagee upon a condition that property must be transferred back to him on
payment of debt. Mortgagee can sell the mortgaged property even without the intervention of court.
Equitable Mortgage
1. Equitable Mortgage is called as Mortgage by Deposit of Title Deeds.
2. It can be created by mere deposit of title deeds of property with intention to borrow.
3 a.Title deeds should be deposited at Mumbai, Kolkata, Chennai ( Presidency Towns) or any other town notified by the State
Government in this regard. It is not necessary that the title deeds should be deposited with the branch or at the place where the
loan is being raised.
3 b.These can be deposited anywhere in India at a notified place.
it is not necessary that it should be within bank branch premises. Mortgagor can deliver the title deeds to an authorized
representative of the bank at mortgagor's residence or other place provided it is in a Notified Centre.
4. The property to be mortgaged may be located anywhere in India (For example, for property located in Delhi, title deeds can be
deposited at Chennai.
5. Equitable Mortgage does not require registration with Registrar of Assurances. But in case of a limited company, charge in
yespect of equitable mortgage under Section 125 of the Companies Act, 1956 must be registered with Registrar of Companies.
6. A title deed can be a sale deed, lease deed, partition deed, gift deed, deed of assignment, deed of relinquishment, or such
other documents. Agreement to sale is not a title deed.
7. Normally a bank should insist for original title deeds but in exceptional cases equitable mortgage can be. created even by
certified copy of the title deeds.
8. Property located in cantonment areas should not be accepted for equitable mortgage, without clearance from cantonment
authorities.
10.The bank should not part with the title deeds even for a short duration at the request of the mortgagor because if some other
creditor is induced to finance on the basis of title deeds, the bank may Lose priority over the mortgaged property.
11. No registration with Registrar of Assurance is required. For a company, registration with ROC within 30 days is required u/s
87 of Companies Act 2013. Under SARFAESI Act, registration with CERSAI.
12.Deposit can take place within Municipal limits of Presidency Towns (Kolkata, Chennai or Mumbai) or State Govt. Notified Towns.
It is not necessary that the place for deposit of title.deeds, should be bank branch premises
Legal Opinion and Search Report: Before accepting mortgage of immovable property, legal opinion should be
obtained that the property is fit for mortgage and search should be conducted in the records of Registrar /Sub
Registrar for at least 12 years to ensure that the property is free from prior encumbrance.
Priority of Mortgage: The priority of the mortgage is considered from the date of execution of the mortgage deed (in the case of
registered mortgage) or from the date of creation of mortgage by deposit of title deeds and not with reference to the type of
mortgage or date of registration.
Right of Redemption: Right of the mortgagor to get back his mortgaged property on repayment of the loan, is called as the right of
redemption. This is available in all types of mortgages.
Right of foreclosure: The right of the mortgagee to deny the mortgagor of the property to exercise his right of redemption i.e.
debarring the mortgagor for ever to get back the mortgaged property is called as the right of foreclosure. This right is available to
the mortgagee in case of mortgage by conditional sale.

NEGOTIABLE INSTRUMENTS ACT

NEGOTIABLE INSTRUMENTS ACT

1. What is the Section which contains the provisions relating to bouncing of cheques? Sec 138 to

147 of NI Act

2. What is the characteristic of a negotiable instrument? It must be transferable by delivery. & b) It

must enable the holder to sue in his own name

3. Who is the holder in the context of the negotiable instruments? Holder is the person who is

entitled to the possession of the instrument and to receive the amount of the instrument in his own

name

4. A cheque dated 3rd Jan 2005 bears the striking of the pre-printed year 19., can be passed? YES.

Striking need not be authenticated and cheque can be passed.

5. Whether protection is available to the paying banker in case of a cheque where drawer‘s signature

is forged? No.

6. When a post dated cheque purchased by a bank is returned unpaid on the ostensible due date,

what the banker can do? Can sue all the prior parties

7. How will you treat the bill which has been lost before it is overdue? The holder may ask the drawer

for another bill of same tenor against indemnity.

8. With whom, liability primarily rests with in respect of a cheque? Drawer only.

9. ― Endorsement in blank means: Endorsement by the drawer of the instrument signing by the

payee or holder of the instrument without adding any words to it.

10.An order instrument can be negotiated by: Endorsement and delivery.

11. Restrictive endorsement restricts: Negotiability of the instrument

12.A promissory note cannot be issued payable to The bearer on demand. As per Section 31 of

RBI Act: Only RBI can issue Bonds/Promissory Notes payable to Bearer on Demand [Tantamounts to

Currency]

13.A promissory note must contain what? An unconditional undertaking to pay

14.A Bank draft is a cheque. False.

15. Other than cheque, whether a bill of exchange can be drawn on Bank? YES.

16. When a bill of exchange payable on demand should be paid? On presentment

17. Mr. Kamath draws a bill on Mr. Suri payable three months after date. Mr. Kamath dies in a road

accident before the bill is accepted by Suri. Under such circumstances, Suri can accept the bill even if

he is aware of Kamath’s death.

18. When a bill is payable in 3 installments, whether a grace period of 3 days will be allowed on

every installment? True.

19. The term ―Accommodation Bill refers to Which a person signs as a drawer, acceptor or endorser

without receiving value therefore & for the purpose of lending his name to some other persons

20. When the bill is payable at a specified period after sight the period begins from the date of - The

presentment for acceptance.

21. Kite Flying ― is the term used to denote To drawing/accepting of bills just to accommodate the

other party without backing of any genuine trade transactions.

22. A bill of exchange drawn on a partnership firm may be accepted by Any partner.

 

 

23. A bill is drawn in Calcutta on a trader in Travancore but accepted payable in Singapore. The bill

shall be called as Inland Bill.

24. A bill is drawn in Calcutta on a merchant in Hyderabad and endorsed in Hongkong. Such a bill is

termed as Inland Bill.

25. A bill drawn in Bangkok on a party in Coimbatore and accepted payable in Delhi is Foreign Bill.

26. Which of the following presentment is improper? Presentment at a place other than the specified

one

27. Who should accept the bill if it is addressed to two or more drawees that are not partners All the

drawees

28. When the bill of exchange does not contain specific place of payment, the bill must be presented

to whom? At the residence (place) of maker/ drawee/ acceptor

29. If the bill is not presented to the drawee within the reasonable time, The drawee is discharged

from his liability

30. In the case of dishonour of a foreign bill protest is Compulsory when required under the laws of

the place where it is drawn

31. When an inland promissory note or bill is dishonoured noting - Is not compulsory

32. The meaning of noting is Record of dishonour of bill by Notary Public

33. When the bill contains the name of a drawee in case of need the bill will be considered as

dishonoured if it is dishonoured by the drawee in case of need or dishonoured by the drawee

34. When a cheque issued by a Limited Company is returned for want of funds, the liability for the

dishonour is with Only the Company and the authorised signatories of the cheque excluding Govt

nominated directors

35. Whether the term―protest refers to a formal certificate of dishonour of bill based upon ― noting

issued by notary public? YES

36. Promissory notes are to be witnessed-For the purpose of identification of the borrower at a later

date

37. Under Section 138 of NI Act, 1881, the drawer of a cheque is liable for prosecution if the cheque

is returned for any reason? FALSE (for Inadequate funds – see question below elsewhere)

38. Punishment under Section 138 of NI Act is applicable only to an individual. FALSE

39. Criminal action against the drawer under Section 138 of NI Act can be initiated by the payee only

when the cheque is returned for the reason - Inadequate funds

40. Punishment under Section 138 of NI Act is Imprisonment upto 2 year/or fine upto twice the

amount of cheque or both

41. Who can file a criminal case against the drawer of a dishonoured cheque The payee/the holder in

due course

42. The competent court for trying offences under Section 138 of NI Act is Metropolitan Magistrate or

I class judicial Magistrate

43. Section 138 of NI Act can be activated only when The cheque should have been presented within

6 months or validity period of cheque whichever is earlier/the payee/holder should give notice

demanding payment within 30 days of notice of information about dishonor of cheque due to

insufficiency of funds and the drawer has failed to make such payment within 15 days of receipt of

such notice/the cheque should have been issued in discharge of full or part of liability/debt.

 

44. Whether the limit for taking action under Section 138 of NI Act is 60 days from the date of

receipt of dishonour of the cheque by the drawer? NO

45. Whether the complaint for taking action under Section 138 of NI Act can be oral. NO

46. Whether drawee bank‘s liability for damages on account of wrongful dishonour of cheque arises

only if the payee suffers any loss ? NO

47. To a paying banker protection is not available for - Payment of order cheques with irregular

endorsement

48. Whether payment after business hours is payment in due course? NO

49. In a promissory note, the words ―or order ― are Necessary to insert

50. A bearer cheque contains two endorsements. The second endorsement is irregular. The cheque

in question can be Paid in spite of irregular endorsement (once a bearer, always a bearer)

51. Whether alteration from general crossing to special crossing is a material Alteration? NO

52. A travelers cheque is valid for a period of —months from the date of issue. No such period

53. A cheque payable to A or B or order should be endorsed by - No such cheque can be issued.

54. A bearer cheque specially crossed to ― P requires - Any endorsement on such cheques can be

ignored since it is a bearer cheque.

55. The validity period of endorsement on a cheque is - No such restriction.

56. Holder of a post dated cheque will have a valid course of action against drawer - Any time after

the date mentioned

57. Inadvertently a cheque has been paid on 29 November 2003 which is dated 29, November 2004.

Subsequently the drawer stops its payment on 15 December 2003. In such a case Bank is liable for

damages due to negligence on its part.

58. In the case of wrongful dishonour of cheque by the bank due to genuine mistake whether the

bank is liable to the customer YES, the banker is liable for damages

59. Under Section 26 of N.I. Act, if date of maturity of usance bill falls on a public holiday it is

deemed to be due - On the next working day

60. While collecting the cheques for customers, the collecting banker may be held liable for

conversion. Conversion means Interfering with the rights of the true owner

61. Whether action under section 138 of N I Act bars the normal civil remedy No

62. An unstamped pronote can be set right by Payment of required stamp duty with penalty as

required by law

63. A cheque is crossed ―not negotiable; then the effect is that: Transferee will not get a better title

than the transferor

64. A cheque bearing date 30 2 04 is presented for payment on 28.2.04. As per IBA guidelines: The

cheque can be honoured

65. What kind of payments are covered under Section 138 of N I Act Payment in discharge of whole

or part of a debt.

66. A bearer cheque was paid across the counter. Later, the signature of the drawer is found to be

forged, even though signature apparently tallied with the specimen. Bank loses protection and is

liable to the drawer

67. Post dated cheques are Valid instruments

68. In case of endorsed cheque, protection is available if Payment of the cheque has been made in

due course and it is ensured that endorsements on the cheque are regular.

69. Banker should not pay a post dated cheque because

a. It is not payment in due course hence bank loses protection under N I Act. Or

b. Drawer may stop the payment of the cheque or

c. Garnishee order may be served

70. A cheque is valid if it has maximum endorsements upto -There is no stipulation, on the number

of endorsements a cheque can have.

71. A bill dated 12 5 04, payable 3 months after date, is due for payment on: 16 8 2004

72. Protection under Section 89 will be available to a banker if - The cheque has been paid in due

course and the alteration was not apparently visible, at the time of making payment.

73. A bearer cheque has been paid to the holder disregarding the endorsements on it - It is a

payment in due course and Banker is protected under Section 85(2) of the Negotiable Instrument

Act, 1881

74. Protection to a paying banker has been given by law, for Bearer cheques (Section 85)/crossed

cheques (Section 128)/endorsed cheques (Section 85)

75. It is not necessary to write consideration while endorsing an instrument because it is Presumed

under N I Act

76. Whether every cheque is a bill of exchange? YES

77. A bill payable 30 days after sight is presented for sight on 1 3 04. It fell due on: 03 04 04

78. A Negotiable instrument is rendered void by any material alteration If it is not done to carryout

common intention of the party AND as against any party who does not consent the instrument

79. Following type of crossing is not recognized under the provisions of the Negotiable Instrument

Act “ Account Payee” crossing

80. Not Negotiable crossing is considered as General crossing

81. Who can do crossing of a cheque? Any holder or drawer of the cheque

82. Account Payee crossing on a cheque is indicative that - The paying banker should pay the cheque

to the payee only

83. Crossing on a cheque can be cancelled by Drawer

84. When a cheque already crossed ― not negotiable is negotiated the transferee - Cannot be a

holder in due course

85. Payment of following cheque is prohibited under Section 127 of the NI Act 1881 A cheque

crossed specially to more than one banker except where the other bank is collecting it for the first

bank

86. The marking of a cheque signifies Paying banker’s certificate that it is good for payment

87. When the bank marks a cheque it undertakes - To set aside funds for payment of marked cheque

88. Cheques should be collected for - The customers of the bank

89. In the event of conversion of a cheque, the right to sue can be exercised by - The drawer

90. Protection to a collecting bank is afforded by the Negotiable Instrument Act, in respect of

Conversion

91. Collecting banker is not protected for collection of - Uncrossed cheques

92. Ms. Smarty opened a SB Account at your branch and gave satisfactory introduction. One day she

tendered a cheque which had ―Account Payee crossing and was drawn favouring one ―Mr. Genuine

or bearer on another local bank. You collected the cheque and the amount was credited in her

account. The very next day she withdrew the money. Subsequently, the drawer demanded refund of

the amount of cheque stating that the cheque was stolen and has been collected by you for a person

who is not payee of the cheque The bank will get statutory protection as the cheque was collected in

a properly introduced account

93. For becoming a holder in due course of a bearer cheque, the bank must be - Its possessor

94. With a view to become holder in due course of an order cheque, the bank must be It’ s payee or

endorsee

95. When a collecting banker allows the customer to draw against its cheques under collection, the

position of the collecting banker will be - He will be holder for value of cheques

96. Who bears the loss when a cheque with forged signature of drawer is paid? Paying banker

97. The cheque with forged signature of drawer has been paid by the bank Statutory protection will

not be available to the banker/payment is treated as without authority of the customer/customer’s

account can not be debited. (Forged cheque is not a mandate at all)

98. When a cheque with forged signature is paid the burden of proving that the signature was

forged, lies on the Customer

99. If the forgery occurs due to careless handling of cheque book and carelessness on the part of the

customer still Bank is liable

100. Banker‘s cheques and payment order are classified as Not negotiable instruments

101. In the case of bearer cheque Identification of the presenter is not required

102. A cheque received in clearing has been paid. The cheque has drawer‘s signatures which are

forged but the forgery was done so cleverly that it was difficult to detect it in normal course. In this

situation how will the liability of the banker be determined? The bank is liable to the customer

103. When a banker dishonours a cheque wrongfully He is liable to the drawer

104. If drawer of the cheque becomes insane or insolvent - the cheque should Not be paid

105. Payment in due course refers to Payment in accordance with the apparent tenor to the

possessor of instrument in good faith and without negligence under the conditions of no Suspicion

106. As per requirement of crossing, a banker has paid a crossed cheque in due course. If title of the

holder turns out to be defective, whether paying banker is liable or protected? Banker is protected

under Section 128 of the Negotiable Instrument Act, 1881

107. A paying banker can avail protection in respect of cheques Crossed/Without any

alteration/Drawn payable to order and purported to have been endorsed

108. The Negotiable Instrument Act provides protection to the paying banker against Forged

endorsement. (But not forged drawer’s signature)

109. Section 131 of the NI Act, collecting banker gets protection in the case of Forgery of drawer’s

signature

110. Holder of a current account has authorised a person to operate the account. A cheque drawn by

this person is wrongly dishonoured by the bank. This person claims damages on his own behalf -

Only the account holder can initiate action against the banker

111. Before introduction of Section 138, in the Negotiable Instruments Act for dishonour of cheques

due to insufficiency of funds the drawer was Subject to civil liability only

112. Mr. Raman, in settlement of a debt, received a cheque for Rs.20,000 from Mr. Krishnan. The

cheque, on presentation, was dishonoured for insufficient funds. On contacting, Mr. Krishnan

requests Mr. Raman to present the cheque again for payment. However, in the meantime, Mr.

Krishnan stops the payment of the cheque and the cheque is returned unpaid with the remark ―

payment stopped by the drawer. Can criminal prosecution against Mr. Krishnan be initiated? YES

113. Demand draft belong to the category of Negotiable instruments

114. Protection to the banker is available for Both payment and collection of drafts

SARFEASI ACT

SARFEASI ACT

• The act has two parts, first part stands for securitization and reconstruction of financial assets and

other part is enforcement of security interest.

• Eligible assets under the act may be enforced without intervention of court or tribunal with the laid

down procedure under the act.

• If party failed to deposit the amount, possession of charged/ secured assets is obtained from the

bank under section 13(4) of the act. Publication of possession notice in the act within 07 days is

mandatory.

• No secured creditor shall exercise any right, unless exercise of such right is agreed upon by the

secured creditors representing not less than 3/4th in value of the amount outstanding.

• If borrower restricts the bank to take physical possession of secured assets, petition is filed under

section 14 of the act to the CMM/DM praying to get the physical possession of the assets.

• No action is taken before 45 days of taking possession, as 45 days time is given under the act to

appeal against the action of the bank.

• Appeal with DRT can be filed by the party only after taking possession of the assets under section

17 of the act. Thereafter appeal can also be filed with DRAT under section 18 of the act. Civil court

does not jurisdiction to entertain any suit under provision of the act.

• Secured assets can be disposed off / sold giving 30 days notice to the parties concerned followed

by 30 days publication of sale through auction/ tender notice of these assets in the vernacular

newspaper and national daily.

• 60 days notice is served under 13(2) of SARFEASI

• Action is taken for the dues exceed Rs.1 lakh

• Agriculture Land and lease hold property can not be enforced

• Appeal is made within 45 days of possession of secured asset

 

• 30 days notice is served indicating there in the sale of asset

• 30 days publication is made for auction of secured assets

• Possession of property is obtained under 13(4) SARFEASI Act

• Publication of possession of property -within 7 days from the date of possession.

• SERFEASI ACT 2002 does not apply to the following assets –

A -lien on any goods, money or security.

B -A pledge of moveable.

C – Creation of any security in any aircraft or vessel.

D – Any property that can not be attached under any other law.

E – Any security interest for securing repayment any financial asset not exceeding Rs.1 lac.

F – Any case in which the amount due is less than 20% of the principal amt.

G – Any interest created in agriculture land.

SECURITISATION & RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURED ASSETS ORDINANCE 2002 - SARFAESI Act - 2002

SECURITISATION & RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF

SECURED ASSETS ORDINANCE 2002 - SARFAESI Act - 2002

1. Is it necessary to classify the account as NPA for initiating action under the Act? YES

2. The above Act is applicable in respect of debts due to Nationalised Banks only

3. The Provisions of the Act are applicable in respect of All NPA a/cs with liability above Rs. 1 lac

4. Enforcement is not possible under this Act in respect of Time barred debts, where the present

liability is less than 20% of principal + int. &where the secured asset is an Agricultural Land

5. Whether limitation is suspended or saved while proceeding under the act? No

6. Movables seized under this Act have to be got valued by Valuer in the panel approved by the

Board of the Bank

7. When there is more than one creditor in respect of a secured asset, action under this Ordinance

can be initiated only if 75% of creditors in value agree

8. Whether advocate can issue notice under the Act? No.

9. Under SARFAESI ACT 2002 whether demand notice is required to be issued to Guarantor also?

Only when the guarantor extends his property as a security apart from his Personal guarantee

10. Can appeal under SARFAESI ACT 2002 would be made to DRT even in cases for claims less than

10 lakhs Appeal can be made with DRT in all the cases

11. For an agricultural loan, if any security other than agricultural land is taken whether it can be

enforced under the act? The Act is not applicable only where the security is agricultural land and

hence, we can enforce the securities in the referred case.

12. Can the Bank entrust the work of taking possession of securities to seizure agent? Authorised

officer alone is entitled to take possession of the property

13. Who is the authority to fix the reserve price when the assets are auctioned? Authorized officer in

consultation with the appropriate authority

14. Who can issue the sale certificate under the act? Authorised officer (SMGS IV and above)

15. Whether Banks attach salary of the borrower/guarantor under the act? No, as these are not

secured assets

16. Provisions of SARFAESI Act 2002 enables the Bank to sell their financial assets to Asset

reconstruction company AND Securitisation company

17. When Mortgaged property is a tenanted property before the mortgage whether under SARFAESI

Act Tenant can be evicted NO Bank has to evict the tenant only through eviction proceedings as per

Law covered under Indian Tenancy Act.

18. Whether the Lease/tenancy created after the Mortgage will bind the Bank No it is not binding

on the Bank

19. Whether the Mortgagor has powers to lease the property As per Sec 65A of Transfer of Property

Act the Mortgagor can lease the property but not for more than 6 months and that too the lease is

subject to mortgage