• Buying a litigation property through bank auction

The borrower a christian has borrowed money from the bank keeping his ancestral apartment as mortgage while his 3 children were minor. Hasnt paid even a single payment and now on court order the bank has put for auction. But the children of borrower have filed a suit in court claiming their share and stating the borrower their father without their knowledge put the apartment on mortgage. 

Is this property safe to buy?
Asked 1 year ago in Property Law from Bangalore, Karnataka
Religion: Hindu
1)there is no concept of ancestral property among Christians 

2) there is no right of inheritance by birth among Christians

3) consult a local lawyer before purchase of property  
Ajay Sethi
Advocate, Mumbai
46645 Answers
2759 Consultations

5.0 on 5.0

1) If the property is indeed ancestral and there's a suit filed in the court it would not be safe to purchase the property in auction by the bank unless the bank indemnifies you against all encumbrances including litigation.

2) Ideally the bank should take steps to settle the disputes with the legal heirs as they would have the bank as a party in the litigation.

3) Purchase of the property without any undertakings from the  bank would be putting you in danger of legal trouble.
S J Mathew
Advocate, Mumbai
2263 Answers
110 Consultations

5.0 on 5.0

1. Your query is deficient in providing details to enable the experts to advise you properly.

2. Had the borrower filed a SARFAESI Application before the DRT whose application was dismissed? Did the children of the Borrower file the S.A. before the DRT?

3. In whose name the mortgaged property stands as of now? Does it still stand in the name of the Borrower/mortgagor?

4. Is that property an ancestral property or inherited property?

5. As such, there is no problem envisaged in buying the said property since even if the mortgage of the property is declared as invalid and so is its subsequent sale to you, the Bank will be directed to rerund you the amount collected from you.

6. If you are made a party to the suit later on, then you should file an application praying for a direction upon the Bank to refund you the entire money with interest, damage and cost in case the mortgage is proved to be invalid.

7. Do not register the sale certificate till te dust settles down completely.
Krishna Kishore Ganguly
Advocate, Kolkata
18741 Answers
452 Consultations

5.0 on 5.0

You have not mentioned as to for what purpose loan was taken. The property of minor can not be mortgaged unless the loan was for the benefit of the minor. In this case even if the loan was to pay antecedent debts, mortgage would be justified but if the loan was for some other self serving purpose, the mortgage shall be void.  From the given facts my opinion would be that it is not safe to buy the impugned property. 
H. S. Thukral
Advocate, New Delhi
569 Answers
170 Consultations

5.0 on 5.0

Well, the children have got no absolute right of share in the property and without knowing the full title chain of the proeprty in question it is not proper to make any advise.
Irrespective of any merit in the claim of the children of the borrower it is never advisable to invest in any property which is in litigation as litigation is generally resolved in foreseeable future unless the parties reach to an out od court settlement.
Devajyoti Barman
Advocate, Kolkata
13119 Answers
174 Consultations

5.0 on 5.0

It is very unsafe to buy it as his children are claiming their share in it and alleging the incompetence of their father to mortgage it. The title of the buyer will be subject to the outcome of the litigation. If the civil court is to finally rule in favour of his children then the title of the buyer will vanish.
Ashish Davessar
Advocate, Jaipur
23092 Answers
639 Consultations

5.0 on 5.0

In a move under sarfesi act, if the bank has taken proper action o auction the property under debt/NPA  then you can proceed.
However, in the name of proper action and subsequent action, the bankers will take symbolic possession and not physical possession and would say that the property is auction sold on the as on where on basis.
Without physically handing over the property by executing a proper and registered sale deed, it would not b advisable to buy the property because the buyer will find a very tough time to take physical possession by vacating the occupants/tenants and it will be a cumbersome process which may take years to be in physical possession.
The claim by the so called minor children in their father's property has to be seen by the papers or the facts of the case to form an opinion to it. 
In general view, the children of the father when the father is alive, may not be eligible for a share in the so called ancestral properties. 
You should always take a legal opinion from an experienced lawyer before making any payment towards the purchase of this property.
T Kalaiselvan
Advocate, Vellore
36777 Answers
403 Consultations

5.0 on 5.0

no, this is ancestral property, hence all the children have right over the property, and the suit is also pending before the court, in future, the property will be based on the judgment of the court which may create problem.

Nadeem Qureshi
Advocate, New Delhi
4875 Answers
224 Consultations

4.9 on 5.0

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