clarification regarding ksfc dues as public money recovery

production manager

hello,i had got loan from ksfc for establishing industry during 1988 and onwardsto the tune of Rs 29 lakhs,due to problems,i didnot clearup,then they sold that mortgaged industry to third party to the sum of  Rs14.5 lakhs(during that time property worth was 70 to 80 lakhs)during 1997,i protested this sale,but not contested.During 2010,they came via special tahasildar,ksfc,auctioning unmortgaged my deceased father's proprety,we have legal heirs of four members.even that is sold to some body before issuing auction notice.please give suggesstions,what to next?

shivakumar

 
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Dear shivakumar, I amazed that you did not raise your objection before the Court/Tribunal at any point of time. the slae of  your father property. you can very well challenge the auction of the sale but you will have to do that immediately.

Your query requires perusal of documents and facts and circumstances and the legal position has to be culled out from the available documents.



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production manager

hello,

thank you for your advice,you have mistakaned that ksfc has not sold my father's property to any body else,but they issued first auction notice  dated on 20-2-2010,but we have sold above property to some body else on 20-01-2010.what suit  the purchaser can file in high  court of karnataka to stop the auction procedings from ksfc. what about my steps to go further.

 
Reply   
 

Thank you for your clarification.

Note: Where dues of the secured creditor are not fully satisfied with the sale proceeds of the secured assets, the secured creditor may file an application to the Debts Recovery Tribunal having jurisdiction or a competent court, as the case may be, for recovery of the balance amount from the borrower.

However please note that attachment/auction shall  not effect the rights, subsisting prior to the attachment of the property, of person not parties to the proceedings in connecttion with which the attachment is made. It is a settled position of law as laid down my SC in case of Vannarakkal Kallalathil Sreedharan v. Chandramaath Balakrishnan (1990) 3 SCC 291, that. "the agreement for sale indeed creates a obligation attached to the owenership of the property and since the attaching creditor is entitled to attach only, the right title and intrest of the judgement debtor, the attachment cannot free from the obligation incurred under the contract for sale. Sec. 64 of the CPC no doubt was intented to protect the attaching creditor, but if the subsequest conveyance is in pursuance of an agreement for sale which was before the attachment, the contractual obligation arising thereform must be allowed to prevail o ver the right of the attaching creditor. the rights of the crediotr shall not be allowed to override the contractual obligation arising from an antecedent for sale of teh attached property".

So the purchaser can file an application before the tribunal/court to recall the auction notice and /or file a writ before the High court for quashing the auction notice. 


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Senior Advocate

Purchaser upon payment of sale consideration amount to the seller and upon execution of sale deed registered becomes a pucca owner of the immovable property he has purchased.  Unless the sale deed is challenged and set aside, he continues to be the lawful owner of the property.  Therefore, the purchaser may immediately file a writ petition challenging the auction sale of Karnataka State Financial Corporation and see that the auction is stayed.


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HI,

My Father had taken loan 15 years back from KSFC and he passed away due to heart attack and 8 years back KSFC had auctioned  property through court which was pledged ..........and now  at present after 8 years they are back to recover remaining amount and we do not have own house or any property left with us  .............Kindly advice how to come out of this 

 
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