SP (owner) 11 September 2012

Property acquired under sarfaesi act

Hello:

Last week I was a succesful bidder in a SARFAESI auction. I made my 25% payment the same day and am awaiting the formal acceptance letter from the bank to make the remainder of the payment. The current owner (borrower) was also present during the auction. Eventhough all his Writ Petitions to the High Court of Karnataka were denied, he was still insisting on pursuing the court.

Here is some background - The borrower had pledged two properties to the bank and wanted the bank to release one of them so that they can dispose off the property to repay the loans. The bank refused to do so and insisted on getting the buyer to work with the bank directly. This has been going on for about 5 years. Finally the bank decided to auction one of the properties and I was the succesful bidder of the property.

Eventhough the borrower was adamant on going to the court, It has been 5 days since the auction and the bank has still not received any notice from any authorities.

Question:

what are possible outcomes ?

if i receive a letter from the bank and I make the full payment and the bank issues a sale certificate, do you still see potetial issues ?

appreciate your responses.

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2 Replies

ABHIJEET PARIKH (Bcom LLB MBA) 12 September 2012

To Transfer the title of the said property banks will have to duly follow the procedure under the law

If the borrower is creating the problem of approaching court or trying to get stay order for the said transfer

You have to get an indemnity bond from the bank stating that on the event of happening of abovementioned event Bank shall be liable to return your monies or bear expense to challenge the

but such a event will be unlikely only if things goes haywire

meanwhile try to get order copies of those writ petition denied by the HC

which will help in long run

khalid masood (partner.) 13 September 2012

What do u really want now.? whether the borrower would create problem after you buy property from bank. If this is ur query let me tell you very clearly that he will challenge the sale and place hurdles in completion of sale . Because he has 30 days time to raise his objection as regarding the price and other technical flaws in conducting the auction. When u know very well about the background of the borrower why did u participate in the auction.