SARFAESI Act

Querist : Anonymous (Querist) 10 June 2010 This query is : Resolved
I purchased a flat in Jan-2007 through a Home Loan from ICICI Bank. The seller had purchased the flat from the builder in Mar-2005. At the time of purchase the bank and I did the due deligence to verify that the property title was clear. Since taking possession I have transferred all statutory documents from my seller's name to my name. I have been paying my Home Loan dues and statutory dues on time and without default. In Dec-2009 I received a notice from an asset reconstruction company, claiming that the very flat that I had bought was also registered in the name of a borrower in Aug-2004 who had defaulted payments to Standard Chartered Bank and their title gave them right to take possession under the SARFAESI Act.

My question is can the SARFAESI Act be enforced under such conditions. What is my recourse when I have paid all my dues and invested in improving the asset. How will my bankers react to this.

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DEFENSE ADVOCATE.-firmaction@g (Expert) 10 June 2010
The provisions of SARFAESI act are very stringent. Trace the original owner and find facts.Reconstruct the whole transections and check what the original lender took action for default. God willing you may get escape in LIMITATION ACT. Do all dilligence and ultimately file a writ before HC claiming that you can be held responsible for carelessness of earlier lender.

Daksh (Expert) 10 June 2010
Dear Anonymous,

The answer to your query is authenticity of due diligence before purchase of property by you and suppression of info by previous owner or builder.

Nothing stops you for proceeding against misrepresentation/suppression of previous seller. At present as suggested by Mr.Shashikumar take High Court route and try to get a interim stay on ASAP basis.

Best Regards

Daksh

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