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CS Professional · Corporate Restructuring, Valuation and Insolvency · Debt Recovery and SARFAESI

Ravi Agro Ltd received a Section 13(2) notice, and the sixty days have lapsed. The bank published an auction notice for the secured factory on 10 March. On 8 March, Ravi Agro tendered the full dues together with all costs, charges and expenses incurred by the bank. What is the legal position under Section 13(8)?

The bank cannot sell the factory. Section 13(8) bars transfer of secured assets when the full dues plus costs, charges and expenses are tendered before the date of publication of the auction notice. Ravi Agro tendered on 8 March, before the 10 March notice.

  1. AThe bank may still sell because sixty days have already lapsed
  2. BThe bank may sell but must return any surplus to the borrower
  3. CThe bank must not transfer the secured assets, as the tender was made before publication of the auction noticeCorrect
  4. DThe bank may sell only with the consent of the Debts Recovery Tribunal

Explanation

Under Section 13(8), if the full dues with costs, charges and expenses are tendered at any time before publication of the auction notice, the secured assets cannot be transferred by lease, assignment or sale. The tender on 8 March precedes the 10 March publication. The lapse of sixty days does not remove this right of redemption.

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