abhijit (legal ) 03 November 2009

SARFAESI act

Regarding Public auction to be held for sale of immovable property of a defaulter (borrower)-

facts of the case are as follows-

Bank has taken possession of the immovable property. Bank has put up the property on sale for auction. The public notice is published in leading newspapers inviting bid amounts/tenders from general public. The auction is yet to be held in next 3-4 days. Can the defaulter, bank and propsective purchaser do a private tripartite agreement and settle the matter among themselves? Will this tripartite agreement be illegal since the public notice is published in newspapers and the offer is open to all?

Thanks

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3 Replies

R.R. KRISHNAA (Legal Manager) 03 November 2009

A triparitate agreement involving a prospective purchaser would certainly be illegal and against the rules of auction. But the defaulter and bank can enter into an settlement abiding the debt recovery rules if any.

Raj Kumar Makkad (Adv P & H High Court Chandigarh) 03 November 2009

It is not only an illegal act but also a smell of corruption comes out of such action of bank. All govt. offices are required to deal each and every matter openly without violating its own rules.