SARFAESI sale notice and e-auction checklist (Rules 8 and 9)
Use this from valuation to the sale certificate. Sale-stage defects are the most common reason auctions are set aside.
Key time limits
| Notice of sale to the borrower (Rule 8(6)) | At least 30 days before the sale |
|---|---|
| Re-sale after a failed auction (Rule 9(1) proviso) | Fresh notice of at least 15 days |
| Purchaser's 25% deposit (Rule 9(3)) | Same day or the next working day |
| Balance of the price (Rule 9(4)) | By the 15th day after confirmation, extendable by written agreement up to 3 months |
Valuation and reserve price
- Valuation by an approved valuer, with the report on file (Rule 8(5)).
- Reserve price fixed by the authorised officer in consultation with the secured creditor, and recorded.
- Encumbrances, dues and claims known to the lender are listed for disclosure.
Sale notice (Rule 8(6) and 8(7))
- A notice of 30 days for sale served on the borrower.
- States the details of the property, encumbrances known, reserve price, date and time of sale, and the mode of sale.
- Reminds the borrower that the secured assets can be redeemed by paying the full dues until the auction notice is published (Section 13(8)).
- Published in two leading newspapers, one in the local language, and placed on the lender's website.
- Notice affixed on a conspicuous part of the property.
- For e-auctions: the portal, bid increment, inspection dates and earnest money details are stated.
Auction day and after
- No sale takes place before 30 days from the sale notice (Rule 9(1)).
- The highest bid is accepted only if it is not below the reserve price, or as the Rules otherwise allow.
- The 25% deposit is received immediately, and the balance within the time in Rule 9(4).
- Sale is confirmed in writing, and the sale certificate issued in the form in Appendix V after full payment.
- Sale proceeds are applied as Section 13(7) requires, and any surplus is paid to the person entitled.
Sources: SARFAESI Act, 2002: Sections 13(7), 13(8); Security Interest (Enforcement) Rules, 2002: Rules 8(5)–8(8), 9, Appendix V. A practice aid, not legal advice: check the current law and the facts of each case.