• Bank auction property bought - another bank claims to have the original property paper


We have recently bought a bank auction property. 

Bank gave us all the Original Documents, We verified them and bought the property under SARFAESI ACT. Bank also assisted us in getting the property registered. The bank has also confirmed that there are no encumbrance pending on this property. 

After 2 days we came to know that the same property is mortgaged with another bank, which we thought was not possible since we had the original documents, so we visited other bank branch which claimed to have the original documents as well. 

When we saw the documents (they are not ready to share a copy of the documents) they also appear to be originals. 

Since there cannot be to originals, 

one scenario is that the other bank has fake documents and our is original.. i guess this is safe

Second Scenario, we have the fake document and other bank has original, what are the options we have in this case. Can we go back to the original bank and claim that they have cheated us with wrong documents. 

Can the Second Bank use SARFAESI Act and auction again.

Scenario 3, Both the banks had fake documents and there are multiple other banks that may claim later. 
Can any other bank use SARFAESI Act and auction again.

Since we have paid the required bid money and have registered the property. Do we have some rights as bone fide buyer.
Since the SARFARSI act has a provision os as is where is and as is what is .. will all these claims come to us or we can fight for the same with the original bank
Asked 4 years ago in Property Law
Religion: Hindu

First answer received in 10 minutes.

Lawyers are available now to answer your questions.

11 Answers

Hello sir , it is advisable to file a civil suit for declaration and permanent injuction and make both the bank and the previous owner a party to the suit .. It is recommended to obtain a stay order as , the second bank do not auction the property ... Your ownership cannot be challenged as you are the Bona fide purchaser.

Hemant Chaudhary
Advocate, Gurgaon
4619 Answers
67 Consultations

4.9 on 5.0

you have purchased property on as is where is basis

2) you ought to have done due diligence before purchase of property

3) you are bonafide purchaser of value and sale certificate is registered in your name

4)if other bank has fake documents you are safe

5) if you have fake documents you can sue the bank to recover your money

Ajay Sethi
Advocate, Mumbai
87911 Answers
6207 Consultations

5.0 on 5.0

1. This is a common problem faced everywhere wherein multiple mortgages are created by submitting false title deeds to various banks to take loan from those multiple banks. In a case of one person appears to have collected 14 exact photocopies of the same the same title deed and then taken loan from 14 different banks by submitting those forged title deeds. the original one is with his buyer being my client. Now 14 banks are fighting before the DRT, Kolkata when my client has claimed the title of the said illegally 14 times mortgaged property.

2. Now the question is whether your selling bank had taken physical possession of the said property sold to you before releasing the sale deed or not and also whether they have transferred its possession to you or not. If the bank has not taken physical possession of the said property before selling to you, then the said sale is illegal for which you can claim back the amount paid by you with interest and cost.

3. If the bank has taken physical possession of the said property and the sale to you is valid ab-initio, then collect certified copy of the sale deed and get the same verified from the original you are holding in your possession.

4. You can also file an application before the registrar to examine and certify whether the deed held by you is genuine or not.

5. If the deed held by you are forged, then the sale will be treated as invalid for which you claim back the sale proceeds paid by you with interest and cost from the Bank.

6. Get genuineness of your title deed verified first for deciding about taking any further appropriate action in this regard.

Krishna Kishore Ganguly
Advocate, Kolkata
26602 Answers
726 Consultations

5.0 on 5.0

Dear Client,

Until no action initiated by 2nd bank, u r advised to enjoy peace full possession.

At the time of loan verification, it is mandatory for the bank to verify non encumbrance on mortgage property and originality of documents. Bank is free to file FIR against defaulter but no right against u.

U r bonfied buyer, your ownership in the property cannot be questioned,

While effecting sale by inviting tender from public or holding public action, the details of the encumbrance known to the secure creditor are declared/furnished to the public at large. While interpreting Rule 8(6) of Security Interest (Enforcement) Rule, 2002, the Bank/Financial Institution is imposed with the accountability to conduct due diligence/make thorough search on the assets before the sale. The plea of ignorance of the knowledge of encumbrance on the assets sold on the pretext of "as is where is" is no longer an acceptable argument in the light of the judicial interpretation.

Hence, the Bank/FI have to tread very carefully before holding public auction and take all necessary steps to ascertain and furnish the information relating to encumbrance/attachment on the property to the intending purchaser.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

1) check the original chain of documents

2) regsiter will verify the original documents given to the bank

3) you are a bonafide purchaser of value but if the documents on basis of which property is sold to you are forged auction sale to you would be set aside

Ajay Sethi
Advocate, Mumbai
87911 Answers
6207 Consultations

5.0 on 5.0

1. You shall have to get only the title deed of the property which was deposited with the said Bank for creating mortgage thereupon verified about its genuineness i.e. the signatures put in the Register by the sellers and buyers before the Registrar should be the same as have been shown in the Deed held by you.

2. The genuineness of the link deeds possessed by you indicates that the said property was not mortgaged earlier (if those link deeds are found to be genuine) but those genuine link deeds do not confirm the genuineness of the title deed which was mortgaged with the said lending bank from whom you have purchased the said property.

3. You can apply before the Registrar for examination of genuineness of the title deed held by you.

4. Meet the registrar where the said deed was registered ans act accordingly.

5. Such sending of original title deeds to the Registrar by the Advocates of DRT at Kolkata for verification and confirmation about their genuineness is a regular feature.

Krishna Kishore Ganguly
Advocate, Kolkata
26602 Answers
726 Consultations

5.0 on 5.0

File a title suit for declaration and permanent injunction along with ad- interim injunction

Subhendu Ghosh
Advocate, Barrackpore
234 Answers

4.0 on 5.0

Dear Sir,

Now it appears you are in physical possession of property and you like to continue the same and price paid by you is reasonable then you need not worry. Possession is nine points under Law. If you have any threat of dispossession then go to Civil Court and get ex-parte TI Order restraining opponents from interfering with your possession.

Let both the bankers fight mutually and the winner will have to file a suit for possession against you. You may formally file a complaint before police against another bank stating that there documents are fake and forged. For more guidance please contact me.

Kishan Dutt Kalaskar
Advocate, Bangalore
6050 Answers
381 Consultations

4.8 on 5.0

Whether the second bank issued any notice to you?

How did you come to know about this.

You should approach your vendor for clarification and solutions.

T Kalaiselvan
Advocate, Vellore
78070 Answers
1543 Consultations

5.0 on 5.0

You can refer the issue before an experienced advocate in local and get his opinion.

The registrar will not clarify any details regarding documents

The vendor Bank should be taken into task if there appears to be any fraud involved in this.

You can issue a reply notice if you receive any notice from the other bank in this regard.

T Kalaiselvan
Advocate, Vellore
78070 Answers
1543 Consultations

5.0 on 5.0


You retain the property and let the other bank initiate action, the same would be defended by you and the selling/auctioning bank as well. Your all claims would lie against the bank from whom you purchased the property.

Ganesh Singh
Advocate, New Delhi
6646 Answers
16 Consultations

4.5 on 5.0

Ask a Lawyer

Get legal answers from lawyers in 1 hour. It's quick, easy, and anonymous!
  Ask a lawyer