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      Question

      Section 13(11) of the SARFAESI Act contains an important

      provision regarding guarantors and pledged assets. What does Section 13(11) permit the secured creditor to do?
      A Proceed against guarantors only after obtaining a decree from the DRT Correct Answer Incorrect Answer
      B Proceed against pledged assets only after exhausting enforcement of mortgage Correct Answer Incorrect Answer
      C Enforce security only in the order specified by the security agreement Correct Answer Incorrect Answer
      D Proceed against the guarantors or sell the pledged assets without first taking recourse to other secured assets Correct Answer Incorrect Answer
      E Obtain court approval before proceeding against a personal guarantor Correct Answer Incorrect Answer

      Solution

      Section 13(11) expressly provides that, without prejudice to the rights conferred on the secured creditor under or by Section 13, the secured creditor shall be entitled to proceed against the guarantors or sell the pledged assets 'without first taking any of the measures specified in clauses (a) to (d) of sub-section (4) in relation to the secured assets under this Act.' This means the secured creditor does not have to first exhaust enforcement of mortgage or hypothecation over the principal borrower's assets before pursuing the guarantor or selling pledged property. This provision ensures maximum flexibility for banks in recovery and prevents guarantors from raising the defence of requiring the bank to first exhaust primary security.

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