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Manukant Sharma (Consultant)     06 April 2012

Sarfaesi act- cancellation of bid

Dear Friends,

Section 13(8) of SARFAESI Act 2002 deals with the option to stop/cancel the brocess running against the borrower if he/she paid all dues with charges to Secured Creditor/Bank before sale or transfer

 

"13 (8) If the dues of the secured creditor together with all costs, charges and expenses incurred by him are

tendered to the secured creditor at any time before the date fixed for sale or transfer, the secured asset shall

not be sold or transferred by the secured creditor, and no further step shall be taken by him for transfer or sale

of that secured asset."

BUT UNDER THE SECURITY INTEREST ENFORCEMENT RULES, 2002

9. Time of sale, issue of sale certificate and delivery of possession, etc.

 

(3) On every sale of immovable property, the purchaser shall immediately

pay a deposit of twenty-five per cent of the amount of the sale price, to the authorised

officer conducting the sale and in default of such deposit, the property shall forthwith

be sold again.

(4) The balance amount of purchase price payable shall be paid by the

purchaser to the authorised officer on or before the fifteenth day of confirmation of

sale of the immovable property or such extended period as may be agreed upon in

writing between the parties.

Question

Now, whether it is according to law if Bank calcel the bid after accepting 25% from Successful Bidder and received cheque of rest 75% within  a period of 15 days and than cancel the aforesaid bid and return 25% amount and bidder's cheque (75%) on the ground that Borrower had paid his dues to bank even after passing 30 days from Sale Notice and accepting a Successful bid?



Learning

 10 Replies

Nadeem Qureshi (Advocate/ nadeemqureshi1@gmail.com)     06 April 2012

Dear Querist

no, it is illegal, according to this act and rules after one month the borrower has no right to return back the property or bank have no right to cancel the bid.

you should file a stay  application before DRT and pray to hand over the possession according to BID' terms and conditions.

feel free to call 

Advocate Bhartesh goyal (advocate)     07 April 2012

Bank has no right to cancel the bid.It is the borrower who can challenge the  action of bank for taking the possession of property  by filing appeal u/s 17 of Sarfaesi Act and get stay order from DRT.

c.p.s. ramachary (1500)     07 April 2012

Sec.38 of sarfaesi act is very clear in its language that, borrower's right of redemption is open until the security interest is transfered to the purchaser. As long as mortgage is subsisting the right of redemption also subsists.ANY LAW TO PREVENT, EVADE OR HAMPER REDMPTION IS VOID. Therefore, 30 days is not a bar to exercise such right of redemption by borrower. Borrower can pay the entire dues in the loan account before the property is transfered to auction purchaser by a registered instrument according to T.P. Act (which is not inconsistent to sarfaesi act. Please refer to the following decisions


1.
L. K. TRUST  Vs. EDC Ltd. : 2011(2) DRTC 305 (S.C.)

2.MID INDIA POWER & STEEL LTD. VS. ANDYOGIC KENDRA VIKAS NIGAM : 2011(1) D.R.T.C. 62 (M.P

Umesh (owner)     02 July 2012

Can a bank assign the attached  NPA property to an ARC without serving notice to a borrower according to Securitisation act

RAJU O.F., (Advocate)     02 July 2012

It is not mandatory to issue notice to the borrower before transfer of the asset to an ARC. As per Sec.6 of the Act bank/FI has discretion to issue or not notice to borrower.

c.p.s. ramachary (1500)     02 July 2012

There is no provision in SARFAESI Act to give a notice to borrower for tranfer of NPA under assignment deed whether action under  Sec.13 is initiated and possession is taken or not. Notice after transfer is only directory in nature. Hence as opined by Mr.O.F.Raju Advocate issuing prior notice to borrower is not known to the scheme of the Act.

c.p.s. ramachary (1500)     02 July 2012

There is no provision in SARFAESI Act to give a notice to borrower for tranfer of NPA under assignment deed whether action under  Sec.13 is initiated and possession is taken or not. Notice after transfer is only directory in nature. Hence as opined by Mr.O.F.Raju Advocate issuing prior notice to borrower is not known to the scheme of the Act.

c.p.s. ramachary (1500)     02 July 2012

I agree with the opinion of Mr.O.F.Raju advovate

c.p.s. ramachary (1500)     02 July 2012

Please check the server problem to avoid duplication

d b patel (manager)     20 July 2014

dear sir, i want to know that can bank sale morgage property lower then valuation or market rate of property? 


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