You should sue the seller to recover your money as seller did not have clear and marketable title to property
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Property attachment order
I have bought a property from a person in 2021 through a brokerage firm and took home loan on that property from ICICI. So title was clear at that time. However in 2023 Kotak Bank and DRT Issued notice of attachment and case is pending in DRT as of now but anytime in near future DRT will order auction for property. Actually the case is the person from whom I bought the property had PVT LTD Company and same company defaulted payment of kotak bank in 2016. And DRT passed some order that no director can sell their personal properties after 31/05/2019. However that person was one of the director out of two directors and not aware of the same order as he is not having any lawyer. this property was his personal property and also mortgaged with some other bank and there was no any default on this particular loan. However he was not capable to pay EMIS to the bank so decided to sell in 2021 and paid majority amount to bank and closed that home loan. Now for this property kotak bank is telling that they have first right on this property and ICICI don't have any right even if title is clear. What can I do in this case? Can I take any legal action against that person? I am Personally involved in this case and attend the court on every date. I feel that in DRT there is lots of corruption. and also the person from whom I bought the property is very supportive till date. He told me that he was not aware that he can't sell his property and told me that If he wants to do anything wrong with bank he can transfer his property to any family member just after NPA i.e. before 31/05/2019. But he didn't. also told me that other director transferred all personal properties in his family members name just after NPA in 2016 and other director did fraud in the company and used all bank loan money for personal benefits. I asked him why he didn't take any steps on other director , he told me that he didn't have any proof against him at that time. but after that he got some proofs in 2024 from income tax department. Fraud director deposited huge cash during demonetization so IT department Issued notice to him and in reply that director accepted that the money belongs to his PVT LTD Company and he created other company in his son name and transferred all the amount. Just after NPA Person from whom I bought property informed bank and DRT about fraud but no steps taken on that director. Now he also filed complaint with police but police didn't file FIR till date. its almost 6 months now. I have trust in this person as he is supportive and also don't want to do any case on fraud director but doing it to save this property. I also believe that he doesn't have that much money. so I don't know whether I should take any legal action? or any advise for seller (director), what steps he can take on fraud director? Is it help me if other director found guilty? what rights I do have? what will my present bank do if auction order pass?
Asked 8 months ago in Property Law
Religion: Hindu
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12 Answers
You have purchased the property from one of the directors, which was restricted by Drt from being alienated. The ignorance of law cannot be claimed as an excuse by the director who sold you the property.
Now the vendor(director) can be held liable for fraudulently selling the property when there was a restriction passed by DRT against the owner of the property.
You don't have any rights to sue the other director who has not caused any harm or loss to you by transferring his assets to his son's company and if all it has been disputed then the parties to that dispute is the company and the director who sold you the property and not you.
You may have to confine yourself to property that you purchased and look for relief and remedy through legal sources as per procedures of law.
If the company was a service provider you can initiate consumer complaint against them
You should sue the seller (director) for refund or compensation, as he sold you the property despite a DRT restriction. The seller’s claim of ignorance doesn’t hold in law. You cannot sue the other director, as he didn’t directly cause you harm.
Your best legal remedy is to:
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File a civil suit for recovery of the purchase amount from the seller.
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Inform ICICI Bank and request their legal support.
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Participate in DRT hearings and contest the auction as a bona fide buyer.
Stay focused on your case — not the internal company dispute.
More info: That director told me that he already resigned the company before NPA, however he is a guarantor in loan. Total NPA amount of company was 35 crore approx out of which approx 30 crore deposited after NPA of company in demonetization. One can easily say that this is a case of fraud by seeing the documents and bank statements of other director provided to me by this person(seller). And bank also can easily recover all loan money from this amount. But bank did nothing in this direction even after submitting the proofs. This person can't fight legal because of financial problem. I also believe he has no reason to do anything wrong as he living with his wife only. No son and no daughter. And right now I am felling helpless and hopeless in my case so thinking in this direction to help financially to fight case with other director but only if I am getting any relief as by dping this case its long battle and all money belongs to bank only so no benefit for this person or me unless court grants some relief from that money. Right now I don't have any other option as I know that i will get nothing by doing case against this person. So please advise accordingly what Can I do to prove that other director have enough money for recovery of loan.
Asked 8 months ago
If chances of recovery of money are bleak from seller contest the case filed by the bank
2) bank can proceed against guarantor fir recovery of loan mount
3) draw attention of court to fact that bank is hands in glove with other director and not taking recovery proceedings against said director
It is the problem of your vendor and not you.
You cannot file on behalf of your vendor on this.
You can sue your vendor alone.
Your vendor should defend his interest properly based on the support of documentary evidences in his possession.
Your case against the other vendor is not maintainable.
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Seller’s Liability:
The seller (director) sold the property despite restrictions. You can sue him for misrepresentation and breach of the court order, seeking a refund of the purchase price. -
Fraud by Other Director:
If the other director fraudulently transferred company funds during demonetization, you can help the seller prove this with the evidence you have, but be cautious about financial support since recovery may go to the bank. -
Bank Action:
The bank can recover the loan from the other director using the evidence provided. If the bank isn’t acting, consider pressuring the bank to pursue the matter more actively. -
Legal Steps:
File a case to protect your rights in the property, and if you believe the other director has funds, try to bring this up in the court to strengthen your case. -
Your Role:
Help the seller with legal aid if you believe it’ll benefit you, but keep in mind that the recovery might only benefit the bank. The focus should be on securing your property rights.
You need to show hhe company assests of that director to court from ministry of corporate affairs
on Thursday DRT ordered for the auction of the property in the month of JUNE. After the advices received from all the lawyers decided to help the seller to fight the case to save my property. But It will take long time. However Please guide me what to do to stop this auction in June?. More Details on my property: 1. Seller bought the property in 2015 for 3 crores and took home loan and other top up loan/construction loan from ICICI worth approx. 4 crores. 2. In 2016 Seller's company Got NPA. All mortgaged assets attached and auctioned till today. Nothing Left. 3. In 2019 DRT ordered not to sale or transfer any personal assets. 4. in 2021 property sold to me for 3.5 crores and I took bank loan from ICICI worth 2 crores with title clear from bank. Seller used the fund received from me to pay ICICI loan amount approx. 3.30 crores. He paid the amount to the bank with first charge. After Covid from 2022 Prices increased for the property in this area and approx. price now 5.5-6 crores. Now ICICI and me both raised objection in DRT but Got rejected and auction declared. we have filed appeal also. Auction is possible if charge of ICICI is already there? No value of Title Clear by Bank? I know seller can not sell the property after restrictions but he sold and closed the loan with most of the money and not used for his personal benefit. Now what to do to stop this auction? can I approach High Court directly? What better I can do in this situation? And Thank You every Lawyers for taking time to answer my queries. Thank You very much everyone.
Asked 8 months ago
Against DRY order appeal lies to DRAT
.seek stay of auction order
2) HC will not intervene as alternative remedy available
The property was sold by your vendor despite a restriction order by DRT to not sell the personal property.
you bought the property despite blowing the pending litigation and the restriction orders by DRT in force against your vendor to not to sell his personal property.
You are not a party to the ongoing proceedings in the DRT hence you have no locus standi to file any appeal or petition to stall the auction proceedings
High court will not entertain your application because you have no rights to participate in the pending proceedings to which you are not a party.
you have to wait for the further proceedings in the case and take steps as per the situation that would prevail at that time.
You can take action against the firm and bank under consumer protection act by filing complaint
Your Situation:
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Seller sold property despite DRT restriction (order in 2019).
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You bought in 2021 with ICICI loan — title was clear then.
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DRT ordered auction for June despite your and ICICI’s objections.
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Appeal filed but auction still scheduled.
What you can do:
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🔹 Immediately file Writ Petition (Urgent) in High Court challenging DRT auction — argue you are a bona fide purchaser with ICICI first charge and no fraud on your part.
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🔹 Request stay on auction until appeal is decided.
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🔹 Emphasize that ICICI cleared the title and sale funds were used to close old home loan, not misused.
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🔹 Support seller’s fraud case against the other director separately, but focus first on stopping auction.
Quick Summary:
➡️ Yes, you can and should go to High Court now.
➡️ File for urgent stay citing buyer protection and ICICI’s interest.