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      Question

      Under Section 13(2) of the SARFAESI Act, 2002, before a

      secured creditor can enforce a security interest, it must serve a demand notice to the borrower requiring payment. What is the time period given to the borrower to discharge the dues in full after receipt of such notice?
      A 30 days Correct Answer Incorrect Answer
      B 45 days Correct Answer Incorrect Answer
      C 60 days Correct Answer Incorrect Answer
      D 90 days Correct Answer Incorrect Answer

      Solution

      Explanation:
      Section 13(2) of the SARFAESI Act, 2002 provides that where a borrower, who is under a liability to a secured creditor under a security agreement, makes any  default in repayment of secured debt  and his account is classified as a  Non-Performing Asset (NPA) , the secured creditor may require the borrower by notice in writing to discharge in full his liabilities within  60 days  from the date of notice. ​ Only after the expiry of this 60-day period without payment, can the secured creditor proceed to enforce the security interest under Section 13(4). The notice under Section 13(2) is a  mandatory pre-condition  failure to issue this notice would render any subsequent enforcement action invalid.

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