Litigation filed under sarfaesi act
Ritika Ahuja
(Querist) 04 January 2018
This query is : Resolved
Hi, i am looking at purchasing a property. The current owner of the property has a home loan against the said property. In addition, there is a case in the High Court against the owner and the bank (which has given the loan) by a third party under the SARFAESI Act.
My question is - Does the lawsuit encumber the owners right to sell the property? Will I, as a buyer have the legal right to the property once the sale deed is registered and stamp duty paid? OR can the third party hold any rights against me as well in future.
SHIRISH PAWAR, 7738990900
(Expert) 04 January 2018
The owner will be prohibited to sale the property if any order is passed for not selling or creating third party rights in disputed property. Please appoint Advocate and get the Advocate opinion.
R.Ramachandran
(Expert) 04 January 2018
What prompts you to purchase the property? Cheap price?
Please keep off the property. You will be in trouble if you purchase the property, especially when the Bank has a lien over the same, having lent the money to the borrower.
Vijay Raj Mahajan
(Expert) 04 January 2018
The property under the loan debts will bring trouble for you as you, in case purchase the property will in addition to what you pay the seller for the property has to clear off the loan and interest amount due of the bank. The best course in such property transaction that the loan amount and interest thereon should be cleared by the seller. The High Court case withdrawn or decided as the case may be. Once the title of the property and its seller is legally clear, you may go ahead and buy it.
Kumar Doab
(Expert) 04 January 2018
'Buyer Beware' applies to property deals.
It shall be appropriate to get proper legal opinion from a very able local senior counsel of unshakable repute and integrity specializing in revenue/property/civil/DRT matters before signing or making payment.
This may cost some FEE but can defend long term interest and hard earned monies.
Kumar Doab
(Expert) 04 January 2018
The lender/bank has a charge in such cases of secured debt.
With help of your own counsel check if lender/bank also, agrees in this matter.
Sankaranarayanan
(Expert) 04 January 2018
Nothing more to be added, i do stand with expert's suggestion and advise
Dr J C Vashista
(Expert) 07 January 2018
Well advised by experts, I agree, nothing more to add.
Guest
(Expert) 07 January 2018
Dear Ms. Ritika Ahuja,
Solutions are always there to genuine problems or requirements with some real value. But from the casual nature of your description/ query, it seems as if you want solution merely to answer some law school exercise.
If you are really interested to buy that property and also have patience to get the cases of SARFAESI and HC settled by payments of liabilities through your buying process, you can be the winner of the bargain.
The question arises, when the owner has double liability against the bank as well as a private party with SARFAECI & HC cases already in progress, with what specific reason and object you are interested to buy that property?
More so, you have also not mentioned, whether the third party loan, being tried in HC, is secured or not against the property, and on what account the third party has filed a case against the owner of the property, as well as the bank, in the HC.
In fact there are several questions, which you will have to answer before some conclusive opinion is formed, whether on purchase you can enjoy hassle free or not that property.
Otherwise, you have received sufficient advice on your casual nature of query.
Ritika Ahuja
(Querist) 07 January 2018
Thankyou for your valueable suggestions dear experts.
Dear Mr Dhingra, to give you more insight - this is how the events took place: I saw the property of A about a month back with my family. We liked the place and agreed on the price. Thereafter we sought the property papers and the A had sought an upfront payment of 40 lk against an agreement value of 95 lk. We refused the upfront payment amount and said that we would first need to check the title of the property. A asked for a token money to confirm the deal and stated that they would give us a copy of their papers once a MOU is signed. There after I looked up litigations to check if any (since the token money itself is a high amount - 5 lk). I found 3 litigations against A. 1) One case filed under Arbitration by a finance company in a lower district court in Pune. 2) Second case filed by a bank for dishonour of cheque in a lower court in Pune. 3) A third case filed by 2 individuals against A, A's Bank's Manager and A's Bank's Chairman in the Bombay HC under the Sarfaese Act. I spoke to A on finding this and confirmed if there are any third party claims on their property, to which they denied. The only option left with me is to go to the HC and check for a physical copy of the records. My understanding from the series of events is that once i give the token money and go ahead with my application of loan, even though the loan is sanctioned, A's Bank will not be able to give me a clear title since the property under consideration is pending dispute. In such a case I as a buyer stand to loose time and interest on the money that i have paid, and also my capital (token money) which i assume will not be returned at a later point in time, once the bank refuses to clear the title.
Guest
(Expert) 07 January 2018
Dear Ms. Ritika Ahuja,
Often people get cheated in property matters, if they are not cautious or don't take adequate precautions. You have taken very wise step for making investigation about the status of the property as well as the owner's intentions. Cheque dishonor cases may not be so serious, as like SARFAECI case. However, if liked and can well handle the situations post agreement, you can negotiate for concessional price of the property.
Rest can be possible to check only after examination of the petitions and property related documents, whatever, the owner can spare. But, it is not advisable to give any token money before the cases related documents are examined in detail.
Kumar Doab
(Expert) 07 January 2018
Dear LCI Querist @ Ms. Ritika Ahuja,
You have indeed done well by inquiring and finding details before signing or making any payment.
All buyers must go for proper check that is exactly the essence and spirit of my 1st post also.
Your apprehension is right that later for token money, if any is paid, you may have to exert.
The final offered price is big amount. The amount to be paid for agreement is on higher side.
The intention of seller is clear to tie/entangle intended buyer.
Probably the seller is himself/herself shrude or has been consulting his/her counsels.
The concessional price (if any and at all) may attract. One should not get allured.
Although it is wise to stay away from such deals, IT is individual’s aptitude and facts of the matter and scope if any, in such deal to mature finally in favor of intended buyer.
If you wish to go thru physical records, you may.
You may opt for proper legal opinion on your findings, from a very able LOCAL senior counsel/Law Firm of unshakable repute and integrity specializing in such matters.
If the property is at Mumbai/Pune/ Maharashtra, if you wish you may consult LOCAL LCI Experts in such matters Mr. Hemant Agarwal, Mr. Ajay Sethi, Mr. Ketan Mehta, Mr. M.V.Gupta….. They may be near you and offering Expert Services for such legal matters….
You may also approach Leading LCI Experts e.g; Mr. Rajendra K Goyal who have been with legal cells of Banking Sector ….
Kumar Doab
(Expert) 07 January 2018
You are welcome!
