shashan (director) 01 June 2012

Sarfasei act auction property remains unsold after auction

there was an auction/sale notice in the newspaper and the property was sold to the highest bidder and 25% amount was kept deposited by the bank on the terms that the balance 75% of the said amount would be deposited within 45 days. in the mean time the successful bidder took possession of the property with conivance of the bank. the said bidder created boundary wall and encroached some neighbourhood properties and repaired some part of the property with the help of local musclemen and also with a conivance with the bank. on enquiry we issued a letter to the bank stating the facts and requested them to take necessary action and also to take back the possession. the bank kept silent. after 45 days of the time we found that the amount has not been deposited and that the bank also has not taken any steps. we approached the bank to take appropriate legal action against the bidder and or to cancell the bid and return back the possession. the bank is not replying to our letters and are silent. we have recently come to know that the said bidder has created liabilities of around 5 lacs from local supplies and has run away from the said property. the bank is not taking any action and are silent about the subject. what should i do now? what will happen about the deposit amount? and what will happen about the liabilities created ?

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5 Replies

Anjuru Chandra Sekhar (Advocate ) 01 June 2012

Bank will have nothing to do with those liabilities created by bidder. 25% amount already deposited with the bank will be forfeited according to the terms of sale notice. If Bank wants to sell property it has to issue fresh Sale notice. Bank cannot give possession of property to the bidder without the sale process being completed.

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shashan (director) 02 June 2012

thank you for the reply,

what will happen to the amount recieved from the bidder 25 % deposit amount? what action can i take agaisnt the bank for the act done by the bidder in conspiracy of the bank? why is the bank not replying to the letters and what should be my next step to safegaurd the property?

Anjuru Chandra Sekhar (Advocate ) 03 June 2012

25% Deposit amount shall be appropriated towards loan account. You have a right to receive compensation and costs due to changes illegally made by the proposed buyer to your property as he had made changes to the property before he is made eligible to take possession of property by the Bank. You have to file Securitization Application for the same U/s.19 of SARFAESI Act in the DRT. Bank is not replying to the letters because it is aware it is at fault handing over possession of property to the bidder before Sale process is complete by issuance of Sale certificate in accordance with the stipulated Security Interest (Enforcement) Rules, 2002. Till the bidder makes full payment of money and obtains Sale certificate from Secured Creditor he remains in the capacity of bidder only hence having known that it has committed a mistake, it is silent about your letters without knowing what to reply.

shashan (director) 09 June 2012

thank yopu for the reply will definitely keep u updated

shashan (director) 13 June 2012

sir,

i have visited the branch on various occasion and also issued letters rearding the above but in vain. all the letters are unreplied. now the bnk is just saying that there was no auction held norr any agreement was done nor the possession was given to anyone and thus question of earnest money deposit also does not arise. they are willing to issue us a letter regarding the possession of the property which is held by them only.

you are requested to please tell me how can i know the whereabout about the said transaction done by the bank and also about the agreement done at the time of auction. what should be my next step.