Multiple choice

If a security is in possession of a bank, it can be sold by the bank

  1. by filing a suit under SARFAESI Act

  2. by giving 60-day notice under provisions of SARFAESI Act

  3. by giving reasonable time notice under provisions of Indian Contract Act

  4. under reasons of SARFAESI Act or Indian Contract Act, at the discretion of the bank
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The sale of the securities by the pawnee bank without giving reasonable notice to the pawner is bad and not binding on him. What Section 176 contemplates is not merely a notice but a reasonable notice, of intended sale of the security by the creditor within a certain date so as to afford an opportunity to the debtor to pay up the amount within the time mentioned in the notice.

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