If bank is unable to auction the property via e auction it can auction property by manual auction

2) the reserve price has to be fixed based on valuation report of govt approved valuer

3) Interested bidders must submit their bids in a sealed envelope to the bank, along with which they must deposit a certain percentage of the reserve price which is refundable if one withdraws from the process or does not win.

1. There is special procedure of e-auction and the requirement of one month notice in newspapers is same for manual auction as well.

2.If the manual action there is single bidder then the bank can sell it to the sole bidder as well.

3.in the auction the debtor can also participate to buy back his proeprty.

4. The bank identifies bidder when he applies in writing to participate in the auction and then deposits a part price within a timelimit.

bank should publish auction notice in newspapers to enable buyers to submit their bids

1. The bank can sell the mortgaged property through private treaty as per SARFAESI Act,2002.

2. The procedure to be followed for such sale is the same followed for selling the property through e-auction i.e. sale notice for selling as per the private treaty will be issued to the borrower.

1. Is it manual auction or private treaty?

2. Procedure to be followed for private treaty has been explained in my earlier post.

3. The procedure for manual action will be exactly same as that of the e-auction i,e the sale notices will be sent the same way as it was sent while conducting e-auction sale of the said mortgaged property.

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002 is a powerful instrument in the hands of the banks and financial institutions (FIs) as secured creditors. This Act helps them enforce securities held as collateral to loans disbursed by them should such loans turn out as non-performing assets (NPAs) during the currency of the loan without interference from the Courts.

As per the Act, valuation of the asset has to be done and notify that valuation to the borrower before issuing public notice for auction of property. Bank has to give 30 days’ notice to the borrower regarding its right to proceed against the mortgaged property if he does not pay up the entire principal and interest.

However it was noticed that in most cases all the above timelines are followed more in breach with impunity by the banks. For example, a public sector bank (PSB) branch in Jammikunta proceeded with sale of property within 15 days of declaring the asset as NPA. They have also fixed a reserve price without consulting the impugned borrower or without taking into consideration any objections raised by the borrowers as required under section 13 (3) (A) and proceed for auction of the properties. This is the case with most collateralised MSME NPAs. On top of this, in Jammikunta, the bank has also engaged agents for enforcing coercive recovery measures.

Therefore the misuse of power by banks/FIs are common, one has to be vigil over it and procure a stay order apprehending such dangers to protect his interests.

but what's the procedure for a manual auction? Should bank publish this in the Newspaper likewise e-Auction as per SARFAESI? or another way of asking this is - How would Bank identify bidder for a manual auction?

Manual auction would be done as per the procedures that were followe in the age old traditional system, but some fraudulent bank managers manage to show the manual auction where such auction would not have actually taken place.

Such fraudulent acts are also prevalent.