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srinivas (CA final Student)     05 November 2008

Auction under SAFRESI Act

Mr.A defaults repayment of housing loan taken for purchase of a site and construction. The nationalised bank calls for an auction in its premises and sells the site to Mr.X in the auction. Mr.X has paid full consideration for the site but the bank has not yet registered the site in the name of Mr.X even after 22 months from the date of auction. When Mr.X verified the property documents which were with the bank which the bank did not give before the auction the bank did not have all the documents required for registration of the property in his X name. so Mr. X insisted the bank to induct the indemnity clause into the certificate of sale and to provide all the necessary documents required for registration but the bank is just deny Mr.x that they cannot give any documents nor they will induct the indemnity clause. When Mr.X verified a copy of the sale deed of Mr.A which Mr.X received from the bank , Mr.X came to know that the bank officials have released the loan to Mr.A even for construction when there is no construction at all and they are fearing that if they induct any indemnity clause they may be in trouble for any future problems that may araise in the future.

What measures can Mr.X take to get the site registered in his name?

Several requests to various officials of the bank have failed to get any response from the bank.(at the regional levels & h.o.level)


 3 Replies

Dr. Gyanendra Kumar (Advocate)     09 November 2008

Mr. X may invoke Article 226 of the Constitution of India by filing Writ against the Bank

TVD Rajkumar (Advocate)     12 December 2008

I doubt Writ is an option at all..

Off hand it can be said you could avail remedy of specific performance (civil suit) & compensation OR simply for refund of the sale consideration & damages, intt etc..

But there's more to it.

What exactly are the so called documents which are not available with the Bank essential for transferring the title in your name?

Have you received the Certificate of Sale as provided in Appendix V of the Rules (see Rule 9 (6))

If the Bank did not show you all the documents, it should have put in caution and you ought to have made independent verifications of the property...

It is also possible to work on consumer angle.


  • Allahabad Vikas Pradhikaran Vs Lakshme Kant Shukla 2002 (2) CVPR 28

  • Shikar Sahkari Avas Samithi Vs Parveen Singh 2003 (2) SCC 596

With Regards.

Y V Vishweshwar Rao (Advocate )     30 March 2009

I refer to the  Section 17 ( 1 ) of the Securatization and Reconstruction of Finanacial Assets and Enforcement of Security interest Act 2002( For Short Security ACT )  .The  Proeprty is sodl by the Authorised Officer of Secured Creditor unde the Act under a Notice for sale with a clause with encumbrances known to the Credot .The Sale cosnideration is  paid by Mr X ,  . The Bank is aware of the all transactions by the Borrower with the bank in the loan  Account, the same were to be  mentioned  in the Sale Notice . The Bank Authorised Officer sold the Property  by entering in to the shoes of the  Mortgaogr ,all the rights and liabilities of the Vendor & Purchaser  are applicable  to the  Sale,  if not otherwise agreed . It is mentioned in the query that  all the facts were not disclosed to the Purchaser beofpre the Sale .

For  all the  above reasosn MR X has a remedy uder Section 17(1) of the Act to appeal before the  concerned DRT and seek required directions agains the Bank for hsi redressal .

I hope this  will solve the problem of Mr X - purchaser in the Auction sale   Under the Security Act 2002


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