Upgrad LLM

can third party appeal to court against order of sarfaesi

Dear Sir

I had purchased one flat in 2008 by taking loan from bank. The builder has himself arrange the bank loan for us. I verified the title of the builder by seeing original property documents. The land is in the name of Builder's mother on which property has been constructed. Moreover my banker seek legal opinion from advocate for title of the property and the advocate provided the legal opinion about the non - encumberance of the property. Moreover the Builder has also sworned affidavit to the bank that the property is free from all encumbrances. But we have come to our surprise that in jan' 13 safaesi notice has been published in the local newspaper for auction of the above property. On enquiring, i came to knew that, the land and building appurtenant thereto has already been mortgaged by another bank and the builder has taken the loan from that bank in 2006 for constructing the property, failing in repayment of whch that bank has published the notice under sarfaesi.

I am totally shocked by this. As like me, many other people has also invested in that property and the builder has taken all money without depositing in to his loan account. Sir request you all to please advice me so that i can save my hard earned property. There are some points which i have noticed are: -

1) There was no notice board attached in building

2)  No inspection done by builder's banker

3) The property has been constructed in 2008, why bank has not enquired that whether any property has been sold in the due course of time and whare the sale proceeds gone.

4) There may be irregularity in sanctioning loan as builder has been sactioned huge loan without his past track record. Moreover, the builder has taken loan in his own name in which his mother became the gurantor. Whether this can happen that loan is taken to construct property in his mothers land in which his mother became the gurantor.

5) Whether there is any process for stay. Can i move to civil court being third party?

6) Whether misrepresentation of facts does not lead it to valid contract and our clear title. As builder and his banker has misrepresented the facts from us.

7) As per Sarfaesi Act, where a property has been financed by two or more secured creditors, no bank shall enforce its right if it does not has 3/4th majority of loan amount on record date. Whether still builder bank can enforce its right where we and our banker has entered into the contract due to misrepresentation of facts.

8) Whether its better to appeal to Debt Recovery Tribunal for relief.

9) now builders bank has kept the resale price of property very low as compared to market value, is there any mechanism to check such pricing.

10) what extra thinngs can be done for taking relief.

Request forum members to please give your valuable feedback in resolving my queries.

Thanks and Regards,



you may claim for specific performance under specific relief act as third party. by showing that you have entered into contract in good faith.


Can u please tell me the process of claiming specific performance under specific relief act???


You can appeal as a third party under Section 17 of Sarfaesi Act and get stay on the SARFAESI proceedings.  However it is controversial whether the DRT is empowered to adjudicate on the right or title over properties, to my knowledge, the Supreme Court had given a ruling that if there is a prima facie case of fraud, the bar under Section 34 for Civil courts does not operate, and the parties can invoke the jurisdiction of Civil courts. 


So you can file for a Temporary Injunction in Civil suit to stay the SARFAESI proceedings of the bank till the title of the property in dispute is decided by it.  The title of the property is in dispute because the builder could not have given two sets of original title deeds to two different banks.  So it is to be ascertained which set of documents are original ones and which ones are fake and who is eligible to be owners of the property, the people who bought the flats or the bank that initiated sarfaesi proceedings.  Till these questions are addressed, the proceedings under sarfaesi can be stayed by granting temporary injunction.


Thank you Sir,

The builder has not given two sets of original title deeds. However, the builder's banker is involved with builder in this fraud. The builder's banker released the original title deeds which is mortgaged, as and when demanded by the builder and shown to the buyer's for verification. When we purchased the flats, sale deed is being executed for each flats separately and such title deed is being mortgaged in our bank for finance of flat. The builder's banker and our banker is not the same.

What is the process of filling the temporary injunction as definately it is the prima facie case of fraud. As discussed from my lawyer, he has told me that stay will be initiated if court fees of 8% of building value has to be deposited, which is considerably a very big amount.

Please guide



Is there any implication to us, if the builder has taken loan showing construction of residential house and also approved by MADA. But he has commercially sold the same.


Any advocate practicising in Ranchi High Court. Please contact at rajanjais@gmail.com

simple solutions for criminal legal problems -- yourpunch@gmail.com

Now the stage of SPECIFIC PERFORMANCE , STAY  and all that is gone. It was your mistake that you did not verify the builder , his documents.


Even your bank failed to verify the same properly otherwise this fraud could have come to light before loans were sanctioned to you.


When the FIRST lender disbursed loan to the builder the property was free and so  the lender has first right and unquestioned right.


Now you have two options-


1) Appear before DRT as third party.


2) File criminal cases against the builder.


Sir, We have verified what an rational person can. However, this is so purpotedly done in which builder along with builder's banker is involved in this fraud, that we did not get any clue that we are being cheated.




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