Secured Assets Attached by Court
KamalNayanSaxena
(Querist) 23 June 2008
This query is : Resolved
A property 'P' mortgaged by bank 'A'. Default in repayment by borrower. A/c classified as NPA. Proceeding under SARFAESI Act initiated by Bank 'A'.
In another proceeding against the same borrower person a decree passed by civil court to recover certain amount in favour of Bank 'B'.
In execution proceeding, Bank 'B' requested court narrating the fact about the said mortgage, to attach the 'P' to satisfy decree. Court attached 'P' and issued notice for proclaimation for sale and affixed them on a conspicuous part of 'P'. Meanwhile Bank 'A' sold 'P'.
Kindly advise remedy availabe in favour of Bank 'B' to recover itd debt. The borrower person is absconded and another property in his name is not available.
Guest
(Expert) 24 June 2008
who was the first person to create the charge on the property. He will have the first say in the matter.
If B had a right of recovery on this person adn the matter was in the court, then the SARFESAI court should have been intimated of these proceddings, now you can appeal on the sarfesai order and seek remedy.
KamalNayanSaxena
(Querist) 25 June 2008
Charge was created only in favour of Bank 'A'. No other charge ever created. No doubt 'A' has right over the property, but my question is, when the Distt Judge considering the fact of mortgage in favour of 'A', delivered order of attachment and this fact was in the knowledge of 'A', Property was not sold by the order of SARFAESI court.
1- what are the legal prospects?
2- Will the SARFAESI Act over ride CPC?
3- Proceeding for contempt of court are maintainable?
4- Can the sale may be declared void?
I would like to point out that Distt Judge has issued show cause notice to 'A' in the application of contempt, filed by 'B'.
anantha krishna n.v. Advocate
(Expert) 06 July 2008
no the query is not tough friend.
the answer is very simple. Bank A has first charge over the property. The attachment is enforceable only after satisfying the Bank A dues. There is no doubt about it. Moreso, when the attachment is made with the knowledge of a subsisting debt and mortgage, it could at best be the second charge.
1- what are the legal prospects?
as discussed above.
2- Will the SARFAESI Act over ride CPC?
it is not SARFAESI OR CPC. the point is who has a charge first. Here it is Bank A. If Bank had no charge, then SARFAESI would not come into play at all.
3- Proceeding for contempt of court are maintainable?
NO
4- Can the sale may be declared void?
NO
File your counter in the contempt proceedings. You cannot be hauled up for contempt in this case.
anantha krishna n.v. (Advocate, Hyderabad, 9246531895)
