Send Demand Notices
Demand notice is a formal communication or intimation by a lender or financial institution regarding the debt owned by the other party. It is a last request to repay the outstanding amount and a legal warning that failing to do so would invite legal consequences.
In cases under Debt Recovery Tribunal or Section 13 (2) of the SARFESI ACT, 2002 (Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act), it is compulsory for the creditor to send a written notice to the borrower to repay the loan before initiating any legal action.
The Section states:
“Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under sub-section (4).”
Contents of Demand Notice:
- Date on which loan was taken.
- Amount to be recovered.
- Default dates.
- Name and address of the defaulter.
- Name and address of the lender.
- Other details of the liability.
- In case assets are mortgaged, then details of the assets.
- Total amount of interest accrued due to non-payment, along with rate of interest.
- Time frame of repayment.
Consequences in case of non-payment within the time frame.
Procedure:
- Contact a lawyer and discuss with them about your case and your intention to send a demand notice.
- The lawyer will draft a demand notice accordingly.
- He/she will send it to the borrower through registered post or courier.
- If the borrower responds well in time and repays the amount, then the case is settled.
- If the borrower does not pay in time, but responds to the notice, then you can have out-of-court settlement or negotiation or seek legal action. The former is better, as it saves time and money.
- If the borrower does not respond to the notice at all, then you have all the right to take action as mentioned in the notice.
Benefits to choose service
A legal expert will draft a proper demand notice, which will strengthen your case and also invite fruitful response. Online Legal Center offers services for drafting and sending demand notices. You can easily find a lawyer at the Center for your legal need.
Frequently Asked Questions (FAQs)
There is no fixed fee for creating and sending a demand notice. It depends on the case, the lawyer, and other such factors.
As per the ruling of Honourable Supreme Court of India, an operational creditor or any authorized person in relation to the creditor or the lawyer on behalf of the creditor can deliver a demand notice.
Please do not panic on receiving a demand notice. Go through the notice properly and see what the demand is. Then, contact a lawyer and let him/her scrutinize the notice and help you formulate an appropriate response or action. Do not ignore demand notice, as this will give the sender an opportunity to take legal action against you. Even if you cannot repay the amount as demanded in the notice, you must still give a professional response and be open for negotiation. A lawyer will tell you the best way to proceed after examining your case and the notice.