Sarfaesi act 2002

Kishor Satpute (Querist) 21 July 2013 This query is : Resolved
M/s. ABC - Multi-state Co-operative Bank had given loan of Rs. 3.00 Cr and Rs.3.00 Cr to the following companies resepctively-
1.M/s.X Pvt.Ltd. Having following directors
Mr. P
Mr. V (Son of P)
Mr. N
Mrs. J

2. M/s. Y Pvt. Ltd. Having following directors
Mr.P
Mr.N
Mr.S

M/s. X Pvt. Ltd. also given corporate Guarantee besides the factory premises mortgaged to the M/s. ABC Bank for disbursement of loan to M/s. Y Pvt. Ltd.

Both the companies account had been classified as NPA and ABC Bank had initiated action under SARFAESI Act 2002 and put the property of both the companies for auction.

Now the position is as under:
M/s. X Pvt. Ltd. - The property was sold in auction and Rs.57300000/- were received.

The Bank had recovered the whole outstanding amount of Rs. 3.00 Cr of M/s. X Pvt. Ltd. from the amount so received and adjusted the remaining amount of Rs. 2.63 Cr towards the outstanding loan of M/s.Y Pvt. Ltd., keeping Rs.10.00 lacs for satisfying the statutory dues of M/s. X Pvt. Ltd.

M/s. Y Pvt. Ltd. -
The auction of M/s. Y Pvt. Ltd. was conducted by the Bank for last 3 occasion but there was no bidder.

Now the questions are :
1. For what amount the Bank can conduct auction of M/s. Y Pvt. Ltd for the 4th time in view of the amount appropriated of M/s.X Pvt. Ltd. under corporate guarantee?
i.e. whether it should be at Reserve Price fixed for land and Building and Plant & Machinery or whether it should publish the advertisement of only land and building if it is sufficient to recover the outstanding dues of Rs.37.00 lacs remaining after the appropriation of the amount received from the auction of M/s. X Pvt. Ltd. under Corporate Guarantee.
2.Suppose the Bank conducts the auction of M/s. Y Pvt. Ltd. as done before and receives full Reserve Price then what should Bank do with the amount received?

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