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geeta   26 June 2015

Property auctioned


Thank You for your help in advance.

Here is my case; I took a lone of 40L and was unable to pay the interest. I received a notice and asked for a stay in DRT. My appeal has been rejected. The bid on the property has come for 43L and the actual price of property is 75L. is it trued that bank would have 30 days to process? I'm thinking of appealing in High Court. My question is would that help? Can I buy back my property for 40L from the bank as that is the auctioned price?


 9 Replies

Amol Kende (No)     28 June 2015


Your case primarily depend on Bank laws and secondly with contract act as per the bank law bank correctly auctioned you property now when its done you cant buy back it if you have mony than you need to pay it to the bank before auction not after cross check with your lawer this case if any loophole available.

Amol Kende (No)     28 June 2015

yes benk have 30 days time but its for documentation and advertisement of that property and invite peoples to bid on that if you bid for that it not helpful to you because now bid can go any value its better you ask bank for payment of pending duces and take back your property from the bank if possible

dr g balakrishnan (advocate/counsel supreme court)     29 June 2015

why u were not able to pay interest, please explain... that shd be the basic reason for all your troubles pls.

if your pleas were ok then only DRT would admit yr matter and would have granted stay.


there seems some where some wrongs.

you could could again go back to DRT  or the basis of DRT' order move applellate tribunal before moving high court. 


always there is a procedure. 

dr g balakrishnan (advocate/counsel supreme court)     29 June 2015

if there are some errors with bank and against natural justice you could move high court under art 14 r/w 226 to quash the bank auction notice.

dr g balakrishnan (advocate/counsel supreme court)     29 June 2015

no law or statute can ever be arbitrary that is mandatory for any judicial review, your qerry whether you could move high court,.... but there are a few preliminaries for judicial review.. your question could you buy for 40 lacs the said property that becomes a question of appeal as the bank would not agree asthe new banking laws with various confusing provisions of law and statutes really confound issues but such illogical laws persist,after all DRT  IS  not of judges but some executives as their correct appreciation of laws on the anvil of constitution of india is never expected (it is like in the UK  the lower tribunal in immigration laws, the higher like UIT- upper tribunal might over turn the lower tribunals' order but house of lords could over turn under humanitarian grounds even against the secy of state dispensations), that way every higher tribunals enjoy powers, but one need note tribunals are just preliminary executive 'fact finding' system, and it applies relevant statutes but enjoys no power to mdify the section as such, that way appeals would proceed, but when matter moves to high courts naturally the high courts invariably look more on question of law and if the statutes vitally not meaningful then it applies doctrine of severability if it can really sand alone, if not very act is unsustainable then the Act would get quashed is the priciple of laws.


hope u got. tks

c.p.s. ramachary (1500)     29 June 2015

Mr. Amol Kende,

Having borrowed the loan you are bound to repay the loan. Your plea that you are unable to pay  the interest may not be appreciated by any banker or tribunal/court. If the property is not auctioned, you may go to the bank and pay the arrears of of installments and interest due seeking concession in the penal interest. The bank may upgrade the account as per para 4.2.5 of Master circular of RBI. After upgradation of the loan account, you may  approach the bank for restructuring of loan, into smaller installments of longer duration to avoid financial burden. Please remember that in the installment component, the interest portion wii be 85% and the principal loan amount will be 15%. If you still find difficulty in repaying the loan, you may find a purchaser and sell the property as per your valuation after obtaining the written consent from the bank to solve your problem. This exercise must be compleated within a month as the bank may not give you long time than one month. Filing writ petition is not advisable. The High Court may dismiss your writ petition at the admission stage itself  for want of merits, whereby you will be unnecessarily incurring expenditure besides loosing your valuable time.

Mimi Banerjee   01 July 2015


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sujnyanendra (Proprietor)     08 July 2015

Did you say you filed an application under Section 17 of the SARFAESI before the DRT, which eventually got rejected?

You may prefer an appeal before the DRT u/s 17 within 45 days from the date of the notice published. If you already have and the same is rejected, you may prefer an appeal against the Order of the DRT to DRAT (Appellate Tribunal). You may even approach HC by filing a writ, but I am not sure whether it would be entertained anyway. Many writs of identical nature have been dismissed by the HC's providing reasoning that the Petitioners did not approach the DRAT as per the provisions of SARFAESI. It would be a waste of time approaching HC. Even in DRAT you would have to deposit certain amount to get your appeal & interim application admitted (Sec 18). So, the hopes of a stay, as I see your case through my eyes only, remains with the HC after rejection of your appeal in DRAT. You may even browse judgments of Hon' SC & HC in this regards. sujnyap[at]gmail.

Anjuru Chandra Sekhar (Advocate )     05 August 2015

Have they conducted auction?  Have they served auction notices to you?  Have they advertised in two newspapers those Auction notices?  Did you attend auction?  Please answer all these questions.  Under Security Interest Enforcement Rules, Sale by auction is only one of the options.  Other option is by private treaty for which your concurrence is needed.  If you do not agree with the price fixed by bank, the bank has no right to sell the property if the bank is selling by way of private treaty.  On the other hand if it is by Auction through sealed tenders, the bidders must participate in auction by paying ten percent of the reserve price fixed by the bank.  For this type of sale (which is Rule 8(5)(c)) the banker must necessarily give Advertisements in newpapers.  The highest bidder who pays above Reserve Price fixed by the bank is declared the winner of the bid and he will be sold the Auctioned property.  However, the bank cannot UNDERVALUE  the property for the sake of its convenience.  If the property's worth is truly 75 lacs and it is being sold only for 43 lacs by the bank, it means the bank had UNDERVALUED the property and the valuation done by the bank can be challenged in a Writ Petition.  I have told you the difference between Sale by Private treaty and Sale by Public auction because if the bank is forcing you to sign private treaty you may avoid to sign it knowing the tricks played by the bank.  You are not obliged to sign the private treaty simply tell them, it is undervalued get the property valued by an approved valuer under S.2(d) of Security Interest Enforcement Rules, 2002.

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