My brother Home got auctioned under SARFAESI Act on 28th March for which only one bidder attended. (This was tried to sell through auction 2 to 3 times but no bidder attended before). Now bidder purchased the Home for 30 lakhs, which was the minimum cost given by bank in newspaper notice. But the actual cost of home is 40-43 lakhs based on the estimations given by Engineers. By that time we approached bank with complete money to clear outstanding dues Bank have given sale notice to purchaser on 6th April. Bank did not take the physical possession yet. We approached advocate and filed a case, for which the appeal date given in the month of September. Unfortunately, we did not get the Stay order. 1. Now we are ready to pay complete money, court will give chance to us? 2. Is it possible to get rid of Possession before appealing date? 3. Is one bidder auction is valid? (Note: No bidder attended for previous auctions)? 4. The cost of home is 40-43 lakhs and they sold out for 30 lakhs. Is this point will help us? 5. My brother taken 15 lakhs loan from Union bank of India and the pending due is 17lakhs. We are ready to pay 17 lakhs. Bidder getting profit and borrower losing again 15 lakhs more. Is it correct?
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1) auction is done on basis of valuation report
2) reserve price is set and auction done
3) auction has to be confirmed by DRT
4) you have already filed appeal against auction
5( court can give you chance to clear bank dues
6) sale can be set aside by court
You have good chances. September date is too long. Its certainly incompetence of your advocate. File early hearing application and obtain stay.
Also made purchaser party in the suit. Longer the case will go, price of the property will increase and auction purchaser will contest the case.
Keep possession with you.
File application to bank u/s 13(3A).
Is one bidder auction is valid - YES.
they sold out for 30 lakhs - Is this point will help us - because multiple auction plans failed, so need arise to reduce the price.
Approach Recovery officer with proposal for cancellation of auction sale.
1. No. Your brother should have paid the dues on or before the auction. Now it is too late.
2. Not possible.
3. Yes, legally valid.
4. No. Your brother should have challenged this on or before the auction.
5. No. The bank had fixed a reserve price and conducted the auction accordingly. Your brother did not object earlier.
You need to claim fraud in auction and there is fraud as there was no bidding and competition to purchase the house. File a case for fraud and get the sale set aside. You can express your willingness the pay all the dues of bank, still better deposit the cheque of the due amount in Court. Sale will be set aside.
The date given by DRT for the next hearing is too long, hence you may file a petition before the same tribunal for hearing advance and seek an order of injunction too owing to the urgency as the property has already been sold by auction to the bidder at a very low price compared to the market value of the property
1. It is the discretion of bank, however since the auction is completed, the bank may not accept or incline to your request/proposal.
2. No, it may not be possible without getting an order of stay from the court competent.
3. It is valid
4. You can add this also as a valid point in your pleadings.
5. Out of the auction sale amount, the bank will return the excess amount which is exceeding the outstanding loan amount.
Dear client,
I am sorry to hear about the situation with your brother's home. Here are my answers to your questions:
It is possible that the court may allow you to pay the outstanding amount and cancel the auction. However, this will depend on the specific circumstances of the case and the judge's discretion. It would be best to discuss this with your lawyer.
It may be difficult to get rid of possession before the appeal date, as possession is usually granted after the auction has been completed. However, you can discuss this with your lawyer to see if there are any legal avenues that can be pursued to prevent the purchaser from taking possession.
Yes, the auction is valid if there was at least one bidder who attended. The fact that no bidders attended in previous auctions does not affect the validity of the auction.
The cost of the home being more than the auction price may not be a strong point in your case, as the bank is not required to sell the property for its market value. The minimum auction price set by the bank is typically based on the outstanding dues owed to the bank.
Unfortunately, if your brother owes 17 lakhs to the bank, that amount must be paid in order to clear the outstanding dues. The profit gained by the bidder is not relevant in this case, as the bank's priority is to recover the outstanding dues owed to them.
yes all of the above is possible if you pay the entire amount
1. Has sale certificate been issued by the Bank? Have you send any letter to the Bank proposing payment of the entire outstanding amount standing in the name of your brother after the said sale notice was issued by the Bank?
2. File a Put Up Petition before the DRT for immediate hearing of the S.A. filed by you seeking direction upon the Bank to cancel the sale since you are willing to repay the entire loan which you have already communicated to the Bank.
