Yuvaraj (Not applicable) 25 August 2013

Please help. bank to auction apt we paid advance for.

Dear Sirs,

Apologies for the lengthy post. I thought I would give the complete picture.

We rented an apartment in Chennai in 2006 for lease. Subsequently, we intended to buy the apartment and executed a sale agreement with the owner (cum builder) in 2007 and paid an advance of Rs. 5 lacs. Please note that the sale agreement was not registered. At the time of sale agreement, the owner did not declare that there was an outstanding loan he had availed to build this apartment.

The housing loan was availed in 2004 for Rs. 13.4 lacs.

The owner kept delaying the execution of the sale for a year. In the meantime, in 2008, due to non-payment of the loan, the bank approached us asking to vacate the apartment, which is when we came to be aware of the unpaid loan.

In the same year, 2008, we filed for injunction order to restrain bank action and also to order the owner to execute sale registration in Madras High court. The court granted interim injunction against bank in the year 2010. Neither the bank nor the owner did appear before trial court.

After lapse of 3.5 years from the date of filing suit, the bank filed application for rejection of petitioner's appeal. The court allowed and vacated the interim injunction in Feb 2013 and w.r.t. the owner of the property, this case is maintainable.

Based on the court's verdict, the bank has taken symbolic possession in June 2013 as per section 2(C) of SARFEASI act indicating a total sum of Rs.18.6 lacs as loan + interest. In the same month, June 2013, we filed counter affidavit against bank for interim injuction.

In July 2013, the bank has issued a notice for E-auction to be conducted in September 2013.

Would like your valuable suggestions on the below -

- Is there a way that we could stop the auction to be held next month (September)?

- Since the owner of the property had not appeared ever since we filed case in the year 2008, if we get ex-party decree in our favour and a direction from court for compulsory execution of sale deed, could we pay the balance to the property owner (per the sale agreement we had with him) through court or to the bank towards his housing loan dues?

- We understood from the bank that any money in excess of the outstanding dues received thru the auction will be paid back to the owner. Is there a way for us to recover the advance of Rs. 5 lacs we paid to the owner in 2007.

- Any other suggestions?

Thanks

Reply Follow

2 Replies

khalid masood (partner.) 06 September 2013

Mr. yuvraj one of the options is that u can challenge the sale being carried out by bank in respective DRT where u can implead the borrower and try to get status quo so that the owner may come for some compromise as u r creating a hurdle in the process of sale which may fetch some amount for the owner. And in this case the DRT may ask the bank to release 5lakhs to u from the excess proceeds after selling the property in auction. One more option for u is that u can participate in auction and emerge as successful bidder and own the property. It is six years since u paid this advance and therefore even if u lose that money and emerge as successful bidder after participating in auction you would be entitled to possession and become owner of the property without involving that cheater. Other people may hesitate to buy this property as u have sale agreement for 5 lakhs with the previous owner . The new buyer has to bear the liabilities of the property as the auction properties are sold by banks in "as is where is " basis. Though ur sale agreement with the previous owner is unregistered it still holds good in the court of law. Dispossessing u without paying 5 lakhs is untenable in the court of law.