Briefly explain what is SARFAESI Act? What are the safeguards one should bear in mind while enforcing the security under the SARFAESI Act or Securitization Act to recover the banks' dues?

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI), popularly known as Securitisation Act empowers the banks and Financial Institutions to recover their dues in Non- Performing Assets (NPA) accounts classified as Sub-standard, Doubtful or as Loss Asset as per the RBI guidelines. The Act empowers the Banks and Financial Institutions to issue notice for recovery from the defaulting borrowers and guarantors, calling upon them to discharge the dues in full within 60 days. The special feature of the Act is that the security interest can be enforced without the intervention of the Courts, subject to certain procedure to be followed, like 60 days notice has to be served by the Bank on the borrower with a request to discharge the loan liability. In case the borrower and/or guarantor fails to comply with, the bank and/or Financial Institution can : Take the possession or the management of secured assets of the borrower, and also can transfer the same by way of lease, assignment or sale for realizing the secured assets without the intervention of a court/Debt Recovery Tribunal; Appoint any person to manage the secured assets which has been taken over by the secured creditor (Bank); Also instruct at any time by a notice in writing to a person who holds secured assets of the borrowers; from whom any money due or becoming due to the borrower; to pay such money to the secured creditor (Bank). No civil court has any jurisdiction under this Act. The Indian Limitation Act, 1963 is applicable to this Act. While taking possession of the assets various precautions are required to be taken and if required the help of the Chief Metropolitan Magistrate (CMM) or District Magistrate (DM) can be taken by the Bank and/or Financial Institution. It is to be noted that the provision of the Act shall not apply in case of: a lien on any goods, money or security; a pledge of movables; creation of any security interest in any aircraft; creation of security interest in any vessel; any conditional sale, hire-purchase or lease or any other contract in which no security interest has been created; any right of unpaid seller; any properties not liable to attachment or sale; any security interest for securing payment of any financial asset not exceeding one lakh rupees; any security interest created in agricultural land; any case in which the amount due is less than twenty five percent of the principal amount and interest thereon.