What the notice is
A notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is the bank’s formal demand, after your loan account has been classified as a non-performing asset, that you discharge the entire liability within 60 days, failing which the bank may enforce its security without going to court — by taking possession of the mortgaged or hypothecated asset and selling it. It is the gateway to every later step, and it is the stage at which the record of the dispute is created.
The notice is issued by the bank’s authorised officer and is addressed to the borrower and to every guarantor and mortgagor whose asset is charged.
What a valid notice must contain
Section 13(3) and the Security Interest (Enforcement) Rules, 2002 require the notice to state:
- the amount payable, with details of the principal, interest and other charges, as on a stated date;
- the secured assets intended to be enforced;
- the fact of NPA classification, and the consequences of non-payment within 60 days.
Check each of these against your records. A notice that demands an amount not supported by the account statements, that is silent on the assets, that was issued before the account was actually an NPA under the RBI norms, or that was not served on all borrowers and guarantors, is vulnerable — not necessarily fatal, but a ground to be recorded now and argued before the DRT later.
The 60-day period
The period is counted from the date of receipt. During these 60 days the bank cannot take any measure under Section 13(4). What you do in this window matters:
- Obtain the account statements from the date of sanction, and the sanction letter and security documents, if you do not have them. You are entitled to them.
- Reconcile the amount — interest rate applied against the sanction, charges, penal interest, and credits not reflected.
- Decide the objective — regularise the account and continue; negotiate a one-time settlement or restructuring; or contest the enforcement.
- Send the representation under Section 13(3A).
The Section 13(3A) representation
Section 13(3A) entitles you to make a representation or objection against the notice. The bank must consider it and, if it does not accept it, communicate its reasons within 15 days of receipt. The Supreme Court in ITC Ltd. v. Blue Coast Hotels (2018) treated the requirement as mandatory in substance, and a failure to reply with reasons is a ground on which the DRT can set aside the subsequent possession.
The representation should be specific: the errors in the amount, the security not covered, the NPA classification, any restructuring or moratorium promised or granted, payments made after the notice, and the settlement proposal if any. Vague protests carry no weight. Send it by a mode that proves delivery, and keep the bank’s reply — or the absence of one — on record.
Settlement and regularisation
The 60-day window is also the best time to negotiate. Banks operate under RBI-mandated policies for one-time settlements and for restructuring of stressed accounts; a documented proposal with a source of funds is taken seriously, particularly before possession, when the bank’s own costs are still low. If a settlement is reached, obtain it in writing with a schedule and a commitment to withdraw the notice on compliance. Your right to redeem the secured asset by paying the dues continues until the sale notice is published (Section 13(8)).
Preparing for Section 13(4)
If the 60 days pass without payment or agreement, the bank may take symbolic possession by notice and then apply to the Chief Metropolitan Magistrate or District Magistrate under Section 14 for physical possession, and thereafter proceed to sale. Your remedy against any of these measures is an application under Section 17 before the Debts Recovery Tribunal within 45 days of the measure — the subject of the next guide. Everything you have done at the notice stage — the reconciliation, the representation, the bank’s reply or silence — becomes the foundation of that application.
Guarantors
A guarantor who receives the notice has the same rights and the same 60 days. In addition, the guarantor should examine whether the guarantee has been discharged or limited — by a variation of the loan terms without consent, by release of the principal borrower or of other securities, or by the terms of the guarantee itself — and should be aware that the bank may also pursue a recovery application before the DRT and personal-guarantor insolvency under Section 95 of the IBC.
Documents to organise now
- Sanction letter, loan agreement, mortgage and hypothecation documents, guarantee deed
- Account statements from sanction to date; the NPA classification letter
- The Section 13(2) notice and the envelope or proof of service
- Correspondence about restructuring, moratorium, OTS or complaints to the bank or the Ombudsman
- Valuation reports and documents of the secured asset
Frequently asked questions
Can the bank take possession during the 60 days?
No. Measures under Section 13(4) can be taken only after the 60-day period has expired without payment of the dues.
Does sending a representation stop the bank?
Not by itself, but the bank must consider it and give reasons for rejecting it within 15 days; failure to do so is a ground before the DRT, and a good representation often opens a settlement discussion.
Can I approach the DRT against the Section 13(2) notice itself?
Ordinarily no — the Section 17 application lies against measures under Section 13(4). The notice stage is for the representation and for settlement, and the High Court’s writ jurisdiction is exercised only in exceptional cases.
What if the notice was sent to an old address?
Service at the address in the loan documents is generally treated as sufficient; a notice not served at all on a guarantor or mortgagor is a defect to be raised at the first opportunity and recorded in the representation.
Talk about your matter
This article is general information. Your position depends on your documents and dates — call or WhatsApp to arrange a consultation.