• Brought property via bank online auction and borrower got stay afterward the auction

Hi .. I brought a property via bank online auction and paid 25% of the total amount on same day and remaining 25% in another week and got an extension from bank to pay remaining in another 1 month. Yesterday bank officials mentioned that there is a court ordered stay from borrower regarding the property. I don't want to get in this legal tangle so asked the bank authority to refund my money as there is a stay. Bank authorities are refusing to repay and mentioning that I have to pay remaining amount and wait for the legal outcome. Is there any law in sarfaesi act mention that if borrower gets court stay then auction winner has right to get his money back. Please provide advice.
Asked 5 years ago in Property Law
Religion: Hindu

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18 Answers

Sir you can implead yourself as the party before the DRT /DRAT in ongoing matter as for the recovery of the amount from the bank or for the registration in your name.

Shubham Jhajharia
Advocate, Ahmedabad
25514 Answers
179 Consultations

5.0 on 5.0

1) pay the balance amount within period stipulated in e auction

2) if sale is set aside by DRT you would get refund of your money

Ajay Sethi
Advocate, Mumbai
94522 Answers
7485 Consultations

5.0 on 5.0

1. ask the bank whether this stay was operational prior to the auction? Ask the bank to provide you the copy of the court stay order

2. generally when bank attaches the property of a defaulter, the borrower defaulter obtains a stay from court against sale of his property by the bank through public auction

3. so if the stay was obtained prior to the auction then bank had no right to auction the property in first place

4. thus bank cheated you

5. however if the borrower obtained stay after auction sale and got an order from court that no further steps should be taken by bank in furtherance of auction then all will be bound by such stay including you

6. in above case the question of making balance payment to bank does not arise

7. if bank still insists then tell the bank that you will pay the balance money in court and not to the bank

8. you first need to check on what grounds stay is given by court and when exactly was the stay obtained

Yusuf Rampurawala
Advocate, Mumbai
7483 Answers
79 Consultations

5.0 on 5.0

You can file an intervention application in the case where the stay has been granted in order to put your stance before the court and to get refund.

However, it is not the action of the bank, but the decision of DRT/DRAT relevant in your case. If you have any objection to the request of the bank, you can file objection with the DRT/DRAT.

Alternatively, You can file an appeal before for setting aside the auction too, and and claim the entire refund henceforth from the bank.

Also, state whether the bank took any undertaking from you pertaining to the SA filed in drt against the said property?

Siddharth Jain
Advocate, New Delhi
6303 Answers
102 Consultations

5.0 on 5.0

Dear Client,

As and where basis no more available option to banks. You can become party in the suit and pray court for refund.

It is duty of the bank to include details of encumbrance. OR

Have to file writ for refund.

Yogendra Singh Rajawat
Advocate, Jaipur
22596 Answers
31 Consultations

4.4 on 5.0

Hi, the bank either has to refund the amount or handover you the property .. It is advisable to file a suit for declaration and specific performance in court against the bank

Hemant Chaudhary
Advocate, Gurgaon
4630 Answers
67 Consultations

4.9 on 5.0

The Jurisdictions of Civil Court has bean clearly barred under section 34 of the Act, stating that no Injunction or stay order shall be granted by any court or other authority In respect of any action taken or to be taken under Sarfaesi Act or the DRT

Mohammed Mujeeb
Advocate, Hyderabad
19299 Answers
32 Consultations

4.7 on 5.0

1) Normally to participate in bank auction property with symbolic possession. The information on physical/symbolic possession is shared by the secured creditor through Public Notice for Auction. Due to oversight, the bidder fails to notice the type of possession. Thus he/she is stuck. however after that they keep running from pillar to post to get physical possession even after 100% payment is released to the bank.

2) The secured creditor can undertake the process to take possession with the help of district magistrate. But after recent amendment, this process will be completed within 30 days by the district magistrate without the intervention of court or tribunals. Now the borrower or defaulter cannot approach court or tribunal for an injunction order on the possession of the property. The most common ground for such stay order is a commitment to clear loan liabilities. This amendment will help successful bidders of properties with symbolic possession.

Ganesh Kadam
Advocate, Pune
12910 Answers
253 Consultations

4.9 on 5.0

1. Bank can Auction mortgaged property ONLY after the appeal period has lapsed. Bank has to refund the Auction money and other money alongwith interest, since it was the deficiency of the Bank. You cannot be liable in any way for a faulty Auction proceedings. Bank has to return the Money by declaring this Auction as null & void.

2. File a grievance petition before the local Consumer Court, to claim refund, compensation & damage.

Keep Smiling .... Hemant Agarwal

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

5.0 on 5.0

Dear Sir,

It is a common sense which prevails over an enactment which has no specific provision. In this case safarai Act has no such provision. But it is universally accepted principle of law and commonsense that the seller must sell the goods with good titles failing which he needs refund entire amount along with compensation also. You may get issue a legal notice and get back your money making the issue viral in social channels so that in future nobody come forward to purchase properties auctioned by Banking and Financial institutions.

Netravathi Kalaskar
Advocate, Bengaluru
4952 Answers
27 Consultations

4.8 on 5.0

Hello

File a money suit and also file a case for breach of contract and seek damages .

Regards

Swarupananda Neogi
Advocate, Kolkata
2963 Answers
6 Consultations

4.7 on 5.0

Hi,

In the present condition, you are suggested to ask the bank to return the amount with interests. The bank can't hold your money deposited by you for the said auction and property.

Ganesh Singh
Advocate, New Delhi
6757 Answers
16 Consultations

4.5 on 5.0

If you are the successful bidder for the property purchased through e-auction, then you are liable to comply with the rules and regulations governing this situation.

You should have enquired about this aspect before submitting tender for this auction and if not satisfied you could have stayed away.

It appears that you knew about the litigation involved in this but went ahead without bothering about the consequences.

Now you cannot get refund because there is no refund rules on such occasion, but you may insist physical possession to the bank for making further payments, however if the condition was on as is where is basis, then you may not be able to claim any relief from bank in this regard, you may have to wait for the disposal of the litigation.

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T Kalaiselvan
Advocate, Vellore
84711 Answers
2172 Consultations

5.0 on 5.0

DRT can stay auction sale even if the auction is completed by the bank if there is any default by bank in auction.

You can join as party before DRT in SA though the case to be argued for auction is for bank.

There are these kind of cases every day see in case the auction is declared wrong by the DRT the bank would be laible to refund your amount.

Shubham Jhajharia
Advocate, Ahmedabad
25514 Answers
179 Consultations

5.0 on 5.0

CITATION..

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 17/1/2018

Sr.V.J.Dhanapal... Petitioner

Vs

1. Union Bank of India & ors

Mohammed Mujeeb
Advocate, Hyderabad
19299 Answers
32 Consultations

4.7 on 5.0

You should take out intervenor application and be added as party

Pay the balance amount chances of sale being set aside are bleak

Ajay Sethi
Advocate, Mumbai
94522 Answers
7485 Consultations

5.0 on 5.0

Make an application to DRT to vacate stay stating that you are successful auction purchaser who has purchased the property bonafide for value consideration

Till your application gets decided request court to direct bank not to insist for balance payment from you

Yusuf Rampurawala
Advocate, Mumbai
7483 Answers
79 Consultations

5.0 on 5.0

The defaulter is also the citizen of the country hence he too has been protected with certain rights in the constitution, therefore there is no legal infirmity in DRT granting temporary injunction staying the execution of the e auction sale proceeds.

You can file a petition to implead yourself as a party in the petition filed by the borrower and file a petition to vacate the stay order.

there are plenty of such cases decided against the buyers' who have not taken precaution while buying such cheap priced properties.

mind your language while addressing the law of the land, you cannot hold the law responsible for your ignorance.

your such arrogance towards law and the country will not fetch you any relief even if you have shelved out lot of money and energy.

T Kalaiselvan
Advocate, Vellore
84711 Answers
2172 Consultations

5.0 on 5.0

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