For banks, NBFCs and housing finance companies
SARFAESI enforcement — from the demand notice to the sale, on one record.
Kenstone Capital supports lenders through enforcement of security interest under the SARFAESI Act, 2002: serving the Section 13(2) demand notice, symbolic possession, the Section 14 order, physical possession and sale through Kenstone Auctiondunia. Every step is tracked on a platform we built in-house. The lender's authorised officer takes every statutory decision.
Reviewed by Shraddha Rathod, Head of B2B Collections · B.Com, LL.B · Last reviewed · How we review
Empanelled by 31 lenders — see who
SARFAESI work since 2004 — begun by KC Agency, where the group started
Borrowers pay the lender — we never handle the money
Enforcement, step by step
What happens at each stage of a SARFAESI enforcement, and the part Kenstone Capital plays in it.
Section 13(2)
Demand notice
The authorised officer issues the demand notice. We serve it on every borrower and guarantor by hand, by registered post or courier, by affixing it on the secured property and, where a borrower cannot be served, through newspaper publication, and we keep the proof of service. The borrower has 60 days to pay. If the borrower objects under Section 13(3A), we log the representation so the authorised officer can reply within 15 days.
Section 13(4)
Symbolic possession
Once the 60 days pass, the authorised officer takes symbolic possession. We deliver and affix the possession notice on the property and arrange its publication in two leading newspapers, one in the local language with sufficient circulation in the area, as Rule 8(2) of the Security Interest (Enforcement) Rules requires.
Section 14
Order for physical possession
Where the borrower does not hand over the property, the lender's advocate applies to the Chief Metropolitan Magistrate or District Magistrate, with the authorised officer's affidavit. We compile the documents and track the application to the order. The Act asks for the order within 30 days, extendable to 60 days in total.
Physical possession
Taking the property
On the date fixed, we work alongside the authorised officer and the officer or advocate commissioner the magistrate appoints, with police assistance where ordered. We prepare an inventory of contents, take photographs and video, secure the premises and hand the keys to the authorised officer.
Rules 8 and 9
Valuation and sale notice
The authorised officer obtains a valuation from an approved valuer and fixes the reserve price. We serve the 30-day sale notice on the borrower and arrange its publication, so no sale happens before the borrower's statutory window closes.
Sale
Sale through Kenstone Auctiondunia
Kenstone Auctiondunia, our group's auction marketplace, takes the property to buyers: listing, buyer discovery, site visits and bidder support for the e-auction the authorised officer conducts. The authorised officer confirms the sale and issues the sale certificate. Buyers pay the lender directly.
Run on our own platform
Every account under enforcement is one record on the case management platform we built in-house.
Every date in one place
Each notice, statutory period and hearing date is logged, with the next step and its owner, so no deadline passes unnoticed.
Proof kept with the account
Proofs of service, newspaper cuttings, affidavits, orders, inventories, photographs and video stay attached to the account they belong to.
Reports in the lender's format
The lender receives status reports in the format it uses, and the full record is available for audit.
One record from notice to sale
The same record carries the account from the demand notice to the sale through Kenstone Auctiondunia, so nothing is lost at a hand-over.
Who does what
The lender's authorised officer
Issues the demand and sale notices, takes possession, fixes the reserve price, conducts the sale and issues the sale certificate.
The lender's advocate
Files the Section 14 application, appears before the magistrate and advises the lender on any challenge before the Debt Recovery Tribunal.
Kenstone Capital
Serves notices, arranges publication, compiles documents, tracks every deadline, organises possession, reports to the lender and, through Kenstone Auctiondunia, finds buyers.
Kenstone Capital is not a law firm. Legal work is done by advocates the lender appoints.
When SARFAESI applies
- The account is classified as a non-performing asset, and the debt is secured.
- The Act does not apply to agricultural land, to debts below ₹1 lakh, or where the amount due is less than 20% of the principal and interest (Section 31).
- A notified non-banking finance company with assets of ₹100 crore or more can enforce for secured debts of ₹20 lakh or more (Ministry of Finance notification, February 2021).
- A borrower can challenge a measure before the Debt Recovery Tribunal under Section 17 within 45 days, so every step has to be on record.
How our people conduct themselves
- Every visit is made with an identity card and the lender's authorisation letter.
- We follow the lender's own policies and the Reserve Bank of India guidelines on recovery agents that apply to the lender.
- No intimidation, no visits at unreasonable hours, and no contact with people unconnected to the account.
- Borrowers and buyers pay the lender directly. Kenstone Capital never receives, holds or pools money.
Questions lenders ask
What does Kenstone Capital do in SARFAESI enforcement?
Kenstone Capital runs the operational work of enforcement for the lender: serving the Section 13(2) demand notice, delivering and publishing the possession notice, compiling the Section 14 application for the lender's advocate, organising physical possession, serving the sale notice and marketing the property through Kenstone Auctiondunia. Every step is tracked on our own case management platform and reported to the lender.
Who signs the notices and takes possession?
The lender's authorised officer. The authorised officer issues the demand and sale notices, takes possession, fixes the reserve price, conducts the sale and issues the sale certificate. Kenstone Capital acts only within the lender's mandate, and the Section 14 application is filed by the lender's advocate.
How long does a Section 14 order take?
The SARFAESI Act asks the Chief Metropolitan Magistrate or District Magistrate to pass the order within 30 days of the application, extendable to 60 days in total for reasons recorded in writing. Actual time varies by district. We track every application until the order is passed.
Can an NBFC use the SARFAESI Act?
Yes, if it is notified for the purpose. Under the Ministry of Finance notification of February 2021, a non-banking finance company with assets of ₹100 crore or more can enforce security interest for secured debts of ₹20 lakh or more. The Act does not apply to agricultural land, to debts below ₹1 lakh, or where the amount due is less than 20% of the principal and interest.
Does Kenstone Capital receive borrowers' payments or sale proceeds?
No. Borrowers and auction buyers pay the lender directly. Kenstone Capital never receives, holds or pools money.
Who has empanelled us: enforcement support for banks and financial institutions. For business receivables, see B2B debt collection agency in India.
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