• Right of borrower after full payment to bank

Sir ji

Mr X took secured loan from Bank and did not pay installments regularly. Bank put his account in NPA 

After 06 Months Bank took possession of secured asset and thereafter one year bank took order from DRT Court for the sale of the said secured asset 

Bank dues as on date is Rs. Twenty Lacs plus interest thereon total about Rs.Twenty One Lacs only. 

Secured asset is valued at Rs.Fifty Lacs.

Bank put the secured assets for Auction and kept the Reserve Price at Rs. Fifty Lacs as per valuation report.

Nobody gave offer up to Rs. Fifty Lacs for the said secured asset.

Therefore secured asset could not be sold 

Now latest events :-

I went to Bank and offered the Bank to purchase the said secured asset in Rs. Forty Lacs but bank refused 

I argued with Bank that your (Bank's) Loan is Rs.Twenty Lacs plus interest. So you take your amount and let the balance amount be given to the owner (Borrower). But the bank refused. Then Borrower came and agreed to sell the secured asset in Rs. Forty Lacs instead of Rs. Fifty Lacs because Borrower wanted to stop the bank interest which is approx. 30% per year plus other charges. 

But even then Bank refused by saying that Reserve Price is Fifty Lacs and we will sell the secured asset in Rs, Fifty Lacs only 

Whether Bank can refuse to sell even after consent of Borrower to sell the said secured asset in Rs. Forty Lacs whereas their whole dues are Rs.Twenty Two Lacs only along with interest as on today. Borrower told the Bank to adjust whole interest and all other expenses lawfully and then give excess balance to him 

Buit Bank is not ready ......

Please Guide 

Asked 7 months ago in Civil Law from Nashik, Maharashtra

Once the bank has made the borrower's account as NPA and has taken possession of the secured asset towards the outstanding loan and loan interest, then the borrower has no rights to interfere in this matter with the lender, if at all he is aggrieved b  the decision of bank then he may approach either DRT  or high court with a writ petition for the relief and remedy.

T Kalaiselvan
Advocate, Vellore
64338 Answers
833 Consultations

5.0 on 5.0

The borrower can object if the property is undervalued. He can justify his objection by conveying any better offer that he may have so that the bank can make a decision..but borrower cannot involve in this matter to sell property in less price to recover debts. 

Properties repossessedl by banks are routinely sold off through auctions at prices that are 20-30% lower than the prevailing market rate

you can file a interim relief application before DRT for stay on auction proceedings further you can challenge the DM order before DRT. 

Mohammed Mujeeb
Advocate, Hyderabad
15428 Answers
7 Consultations

4.5 on 5.0

Go to high court in writ petition to take appropriate directions

Prashant Nayak
Advocate, Mumbai
18500 Answers
34 Consultations

4.6 on 5.0

Borrower should file application in DRT seek orders to permit him to sell the property and repay the bank dues 


2) take the plea that against bank dues of Rs 21 lakhs he has received offer of Rs 40 lakhs and sale proceeds would be paid directly to bank for loan repayment 

Ajay Sethi
Advocate, Mumbai
74366 Answers
4448 Consultations

5.0 on 5.0

Yes bank can refuse to sell below reserve price even if borrower agree. 

See to purchase this property you can do one thing you can give amount to borrower , borrower can do one time payment of loan , get loan closed and then get secured release then you can make balance payment to borrower and purchase from him.

Shubham Jhajharia
Advocate, Ahmedabad
24257 Answers
96 Consultations

5.0 on 5.0

1. File appeal before DRAT (appellate) to set aside order for auction by undertaking to pay entire pending dues amount to Bank and request for directions to bank to hand over possession of property.

2. Once above order is obtained, THEN enter into an agreement with Borrower for terms and conditions and take borrowers irrevocable POA, for further procedures, as you wish.

Hemant Agarwal
Advocate, Mumbai
4293 Answers
23 Consultations

5.0 on 5.0

- As per Supreme Court, if a property owner fails to pay his dues to the bank , then the bank has the legal right to sell off his immovable property to recover losses.

- But, the task to recover the dues should be performed in a specific manner and Authorities/bank cannot resort to extreme measure.

- Further , if the defaulter wants to purchase that property after paying the entire dues of the bank , then the auction will stand cancelled, and he would be able to claim to the property again.

- Hence, you should approach the bank to purchase the auction property with the defalulter , and on refusal you should move an application before the auction ordering court i.e. DRT, for cancelling the auction and transfering the same to you . 

- As per law , bank is bound to release the mortgage documents to the defaulter ,after taking the uptodate loan amount , and to handover the possession on behalf of defaulter to you. 


Good luck and dont forget to rating Positively.

Mohammed Shahzad
Advocate, Delhi
2467 Answers
33 Consultations

5.0 on 5.0

If borrower is ready to sell the property below reserved price for clearing of loan then bank cannot stop him from selling the property.

He should make petition to DRT for allowing him to sell the property without interference of bank and clearing the loan. 

Mohit Kapoor
Advocate, Rohtak
7862 Answers
2 Consultations

5.0 on 5.0

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