• SARFAESI Act

Hi I booked flat from builder in 2012 and paid 6 Lacs as margin. Took home loan of 20 Lacs from HFC with provisional NOC from public sector bank due to project loan. Builder took project loan from public sector bank on entire project worth Rs. 20 Cr and did not paid anything. 

Construction of flat is also at 80 % after 5 years and builder is in jail currently. Bank has enforced SARFESI and took possession. Builder also sold flat to multiple buyer as agreement to sell was not registered.

Fortunately I am lucky as my flat was not sold to anyone. But due to fear i executed sale deed after paying remaining amount from own source to execute sale deed ( 20 Lacs loan - Paid by HFC 14 Lacs & rest 6 Lacs by me ) . Now i am not getting final NOC because last 6 Lacs not routed through escrow by builder. 

Pl suggest. What action i should take ? Can public sector bank who gave project loan can auction my property ?

I have sale deed, RR, money paid receipts & provisional NOC from public sector bank against project loan with me.

Chirag
Asked 7 years ago in Property Law
Religion: Other

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6 Answers

public sector bank will seek to recover the balance Rs 6 lakhs from builder as money was not paid through escrw account

2) if bank seeks to auction your property file intervenor application and seek stay of the auction

3) best solution is to pay the bank Rs 6 lakhs and obtain final NOC from the bank

4) sue the builder to recover your Rs 6 lakhs with interest

Ajay Sethi
Advocate, Mumbai
95205 Answers
7607 Consultations

5.0 on 5.0

All flat owners should get together form association file complaint against builder before consumer forum and seek orders to direct builder to refund your money with interest

2) also claim litigation costs and compensation for mental torture undergone by you

3contact a local lawyer he will draft application to DRT and appear on your behalf in court

Ajay Sethi
Advocate, Mumbai
95205 Answers
7607 Consultations

5.0 on 5.0

1. Did the PSU Bank impose any condition while issuing the provisional NOC like payment to the PSU bank by you in the account of the builder? If yes, then your not following the said condition makes the provisional NOC invalid.

2. If there was no such condition stipulating you to deposit the consideration to the loan account or the escrow account, then the PSU Bank can not initiate SARFAESI Proceeding claiming your flat.

3. You have already registered the flat in your name but the construction of the flat has not yet been completed. You can file a complaint case before the local District Consumer dispute Redressal Forum alleging deficiency in service and unfair business practice claiming early completion of the flat and payment of rent from the date f=when the flat was scheduled to be completed till when it is completed, payment of Rs.6 lakhs to the PSU Bank, damage and cost. Make the PSU Bank also a party to the said case who can be directed by the Forum to issue NOC in your favour on receipt of the said Rs.6 Lakhs from the builder.

Krishna Kishore Ganguly
Advocate, Kolkata
27245 Answers
726 Consultations

5.0 on 5.0

1. If the Bank initiates SARFAESI Proceedings and issue 13(2) followed by 13(4) notice as per the Act, you shall have to file a SARFAESI Application (S.A.) within 45 days from the date of receipt of the said 13(4) notice before the local DRT.

2. Since you are not the borrower, you shall have to may very small amount while filing the S.A. before the DRT.

3. File the case before the local Consumer Forum as advised in my earlier post duly making the said PSU Bank also a party to it where in cases are disposed of fast and you are likely to get the orders as to be prayed for as suggested in my earlier post.

Krishna Kishore Ganguly
Advocate, Kolkata
27245 Answers
726 Consultations

5.0 on 5.0

Pl suggest. What action i should take ? Can public sector bank who gave project loan can auction my property ?

The financial institution will be interested in the repayment of loan either from the builder, if not from the person who bought the property under loan.

The bank will be entitled to initiate legal action as per provisions of law if there is a default in loan repayment.

I have sale deed, RR, money paid receipts & provisional NOC from public sector bank against project loan with me.

You can file an injunction suit against the bank if they initiate any such recovery action.

You may rely on the relevant documents what you have mentioned above to argue and succeed in your case against the bank

T Kalaiselvan
Advocate, Vellore
85404 Answers
2236 Consultations

5.0 on 5.0

Need your further suggestion - In case i don't pay balance 6 Lacs and if public sector bank auction flat how will i get money back which i paid ( 6 Lacs margin + 14 Lacs through home loan out of 26 Lacs ) to builder ?

You have to file a case against the builder only for the losses you suffered.

In the meantime you can file a permanent injunction suit against the bank quoting the same reason that yo are a genuine purchaser and have paid the said money vide the documentary evidences which you have produced before court.

You can consult a local lawyer who has experience in DRT matters and get the complete information including obtaining stay against the bank if they try to initiate action under sarfesi act.

T Kalaiselvan
Advocate, Vellore
85404 Answers
2236 Consultations

5.0 on 5.0

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