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rahul (engineer)     08 May 2013

Bank auction of proprty

I saw one bank is doing auction of the property

Actually one borrower has pending of 50 lakhs loan, for which his property is pledge and one more Guarantor has given the guarantee for the borrower,

Now since the loan pending amount is more than the borrower property value, so Bank as taken the Guarantor property also, So Bank wanted to Auction this Guarentar property also on jan-Feb, But Guarantor has taken the stay order in the court, So bank was not able to do the Auction the property on Jan-Feb, But now Court has rejected the stay order, and Allowed bank to do the Auction. And Bank has even put the KVate.

Guarentar property details--

size is 30* 40

Ground floor commercial which is given for rent 10K

first floor 10* 40 office space given for rent 4k behind this first floor office, one 2 BHK house given to rent -4k

Current market value of the property -- 50Lakhs Bank reserve price is 40Lakhs

Now My question:

1) Is it safe to buy this property in the bank Auction.

2) I am worried since property belong to Guarantor, Will i be the legal owner if i take the property from the bank auction.

3) Can i take home loan on this property since 1 house is also there.

4) Will bank give home loan for this property

Please Advice me on this Issue

Thanks and regards,

Rahul



Learning

 4 Replies

Ajit Singh Cheema (practising Advocate)     09 May 2013

Pointwise comliance is as under:

1)It is not advisable for a layman to buy the reffered property through bank Auction , Property dealers with experience in property litigation may purchase .

2)There shall be no  problem in passing of title ,the property purchase should be avoided keeping in mind the litigation present and future.

3) Normally the bank may avoid giving home loan on such properties.

4) The bank may avoid giving housing for this property,however there is no restriction on Bank.

bhagwat patil (Property due diligence 9422773303)     09 May 2013

One more point to add on Hon. Cheema sirs advice it useal practice of bank officers not to cooperate with the purchaser once the amount is paid to bank,secondly if the guarantor saler objects the price of the mortgaged property,he may continue the litigation.

RAJU O.F., (Advocate)     09 May 2013

If the house property is mortgaged to the bank by its owner as security to a laon and if such loan is defaulted and classified as NPA and later if the bank put the said property for auction under SARFAESI Act, then the purchaser gets the valid title and possession, subject to any litigation pending challenging such sales.

roger fredrick (senior advocate)     10 May 2013

It is unsafe to buy this particular property as it is totally tenant occupied . Bank will find it difficult to evict the bonofide tenants. If the owner of the property is residing there the secured creditor will not have any problem in evicting him.  As  far as the transfer of title is concerned I dont think this particular gurantor (owner) will allow you to have a smooth sailing . Just because the stay is lifted and the bank is pursuing with auction it does not mean that his legal remedies are exhausted. He may file different petitions  in various courts and thwart banks attempt in transfering the property in ur favour.


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