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Got a legal notice from a bank or NBFC? How to tell which ones are real and how to reply
The notices Indian borrowers receive in debt recovery: SARFAESI, Section 138, arbitration, DRT, Lok Adalat and lawyer's notices. Their deadlines, how to verify them, and how to respond.
When a loan goes overdue, you may receive several kinds of "legal notice". Some have binding deadlines:
- a SARFAESI demand notice gives 60 days to pay;
- a Section 138 cheque bounce notice gives 15 days to pay;
- an arbitration notice may lead to an award if you ignore it;
- a DRT or court summons has a hearing date;
- a Lok Adalat notice invites you to settle.
Others are pressure letters with no legal effect of their own, and some are fakes, such as messages claiming a "warrant" or "police case" for an unpaid personal loan. Verify every notice with the lender through its official contact details, note the deadline the day it arrives, and reply in writing to genuine notices. Never ignore a court or tribunal summons.
This guide is part of debt settlement mistakes. It is general information, not legal advice.
The notices and what they mean
| Notice | Who sends it | Deadline or effect | What to do |
|---|---|---|---|
| Reminder or demand letter from the lender | Lender's collections | No legal deadline; part of collection | Reply in writing with your proposal |
| Lawyer's legal notice for recovery | Lender's advocate | Often a precursor to a suit or arbitration | Reply, dispute errors, propose a plan; take advice |
| SARFAESI demand notice, Section 13(2) | Bank, FI or eligible NBFC, for secured loans | 60 days to pay; you can object | See SARFAESI rights |
| SARFAESI possession notice, Section 13(4) | Same | 45 days to apply to the DRT against the measure | Take legal advice immediately |
| Section 138 notice | Holder of a bounced cheque | 15 days to pay the cheque amount | See cheque bounce |
| Arbitration invocation notice | Lender, under the loan agreement's arbitration clause | You may object to the arbitrator and must take part | Take legal advice; an award is enforceable like a decree |
| DRT summons | Debt Recovery Tribunal, for claims of ₹20 lakh or more | Appear and file a reply by the date set | See DRT and Lok Adalat |
| Civil court summons | Civil court | Appear; file a written statement in time | Take legal advice |
| Lok Adalat notice | Legal services authority, at the lender's request | Voluntary; a chance to settle | Attend with your proposal |
How to verify a notice
- Check the sender. A genuine notice carries the lender's or advocate's full name, address and enrolment details. A court or tribunal summons carries a case number.
- Call the lender on its official number from its website or your loan documents, not the number in the notice. Ask whether the notice was issued.
- Check the case number. Many courts and tribunals show case status online. eCourts covers district courts. The DRT has its own case status system.
- Check the amount against your statement of account.
- Look for impossible claims. No genuine notice will say a "warrant" will be issued tomorrow for an unpaid personal loan unless you pay into a personal account. Messages on WhatsApp with police logos, "cyber cell" threats or morphed images are a known scam and harassment pattern. Report them on the National Cyber Crime Reporting Portal or call 1930.
How to reply to a genuine notice
| Element | Example wording (adapt) |
|---|---|
| Reference | "Re: your notice dated [date], loan account [number]" |
| Facts | "I have paid EMIs up to [month]. My income fell after [event]." |
| Disputes | "The amount includes ₹[x] of charges not disclosed in my key fact statement. Please provide a statement of account." |
| Proposal | "I propose [restructuring / payment of ₹x per month / a one-time settlement of ₹y]." |
| Request | "Please confirm in writing and keep any further action on hold while this is considered." |
| Close | Name, address, date; send by registered post or email with proof |
Keep it factual and polite. Do not admit amounts you dispute. If the debt is old, take advice before writing, because a written acknowledgment can restart the limitation period. See limitation.
Collection tactics that are not allowed
RBI directions prohibit lenders and their agents from:
- intimidating or harassing you, verbally or physically;
- calling on overdue loans before 8 a.m. or after 7 p.m.;
- publicly humiliating you or intruding on the privacy of your family, referees or friends;
- sending threatening or anonymous messages or making false or misleading statements.
For microfinance loans, the calling window is 9 a.m. to 6 p.m.. For digital loans, the lender must tell you in advance which recovery agent will contact you. For commercial banks, an RBI amendment in force from 1 January 2027 adds more detail: the bank must list its recovery agencies on its website, tell you the agency's details at least one day before the first visit, and record recovery calls; contact remains limited to 8 a.m. to 7 p.m. unless you ask otherwise. Fake "court notices" sent to pressure you can be reported to the lender, the police and the RBI Ombudsman. See complaints.
Worked example: a week with three notices (illustrative)
Day 1. A lawyer's notice for a ₹3,10,000 personal loan arrives. You reply within a week, disputing ₹22,000 of charges and proposing a settlement.
Day 3. A WhatsApp message says "FIR registered, police will visit, pay ₹50,000 to this UPI today". It does not match the lender's number. You report it to 1930 and tell the lender in writing.
Day 6. A Section 138 notice arrives for a ₹12,000 cheque. You note the 15-day deadline and pay ₹12,000 to the lender's account on Day 12, with a receipt.
Result: you have avoided a criminal case, created a record against the fake message, and opened a written negotiation.
When to consult a professional
Any summons from a court, the DRT or an arbitrator, any SARFAESI notice, and any Section 138 notice you cannot pay within 15 days. If cost is a problem, contact your District Legal Services Authority. See free legal aid.
Frequently asked questions
Do I have to reply to a lawyer's notice?
There is no general legal duty to reply. A clear reply that disputes errors and makes a proposal is useful evidence later, and silence can be read against you.
Can a bank file a police case for an unpaid loan?
Not for non-payment alone. Police cases arise from offences such as cheque bounce under Section 138, which is a complaint case before a magistrate, or fraud. Threats of arrest for simple non-payment are a red flag.
What if I ignore an arbitration notice?
The arbitration can proceed without you and lead to an award that can be enforced like a court decree. Take part, and object if the process is unfair.
Are notices sent by SMS or email valid?
Some notices can validly be sent electronically, but genuine legal notices also come with full sender details. Verify with the lender.
Sources
- Reserve Bank of India: recovery conduct rules in the 2025 responsible business conduct directions
- eCourts Services: check district court case status
- National Cyber Crime Reporting Portal: report fake notices and threats
- National Legal Services Authority: free legal aid
