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MANOJ HARIT (LAWYER)     24 March 2010



The Bank publishes Possetion cum Sale Notice in local Newspapers. The date & time of auction was fixed

The Bank does not go ahead with the scheduled auction of immmovable property on the said date. What are the options available to the Borrower? Does the Bank needs to publish another Notice? Or it can go ahead & sell the property.


 14 Replies

bhagwat patil (Property due diligence 9422773303)     24 March 2010

how much period is passed? for the banks interest is not to auction ur house but to recover the amount. go for compromise if not possible at that level go to bcsbi

1 Like

Devajyoti Barman (Advocate)     24 March 2010

No, another fresh public notice is required to be published. However the borrower can always cahllenge the actions taken by the secured creditor by filing application u/s 17 of the Act if the delay is properly explained and condoned.

1 Like

Parthasarathi Loganathan (Advocate)     24 March 2010

Please approach the creditor bank and resort to Compromise settlement by payment of dues.

1 Like

MANOJ HARIT (LAWYER)     24 March 2010

Parthasarthi Sir, Thanks for the suggetion. But when the Bank is not willing & hellbent on using Sarfaesi as a dagger should the Borrower not defend himself legally? Plz advise.

Parthasarathi Loganathan (Advocate)     25 March 2010

As per Regulatory guidelines in force Banks resort to Recovery Action through the stipulated sources in order to adhere to the NPA parameters.  You will be surprised to know that for the wilful default of borrowers banks are required to maintain provision even for the securities held as prime and collateral.  It goes without saying that it is not the question of any defence on the part of borrower, it is the issue of Repayment.  There are umpteem methods available for the borrower in terms of out of court settlement, rephasement or rescheduling of loans, Restructuring of advances to escape from the clutches of your so called dagger.  Cheer up and get your loan account settled as per terms and conditions imposed on your sanction of loan.

1 Like

MANOJ HARIT (LAWYER)     26 March 2010

Parthsarthy Sir,

The Bank sanctions the Loan to a Borrower based on the Projections submitted by him as well as the internal assessment carried out by its Officers who are highly paid experts. The repayment & interest payment are  expected to be made out of profits generated by the Industry. If for some reasons the industry is not making profits it is the duty of the Banker to examin the issues & find remedy alongwith the Borrower. But the Bankers usually shirk the responsibility & go after the Borrower with a deadly dagger called Sarfaesi. Hence the Borrower seeks protection under the existing legal framework. Your comments please.

bhagwat patil (Property due diligence 9422773303)     26 March 2010

no that way you cannot plead. no borrower borrows the money for becoming a defaulter,nobody likes it. but these r the factors both internal and exteral act on our business and this type of situation is created.if is a industry the RBI guideline is very clear if u have not sifened the funds the BCSBI will help u out.go for BCSBI.BEST LUCK be in touch always no one can forcefully through from ur home for loan if u r not willful defaulter.

1 Like

Uday (Lawyer)     27 March 2010

Dear Mr.Manoj,

Let me also share my view in this regard.

The auction could not have been conducted on the following two occasions.

1) The authorised officer might not have received tenders from the prospective purchasers or might have received tender lesser than the reserve price.

2) Due to some internal reasons.

If the auction has not been conducted for the second reason, then, the sale notice has to be necessarily issued again with 30 days time.

If the action has not been conducted for the first reason, then the options available are

1) The authorised officer may with the consent of the borrower can sell the property for such lesser price.

2) The authorised officer shall communicate the quote received by him and can ask the borrower to find some purchaser for a higher price. In the event if the borrower fails to source a purchaser for a higher price, then the authorised officer can sell the property for the price to which he has received quotation. (This is the decision held by the High Court of Karnataka)

2 Like

Parthasarathi Loganathan (Advocate)     27 March 2010

Mr.Manoj should be aware of the fact, it is not the Bank which decides and frames the Regulatory norms.  It is upto the Government to decide on the  Macro level issues.  Banks after all deal with the money generated from public by means of Deposits, etc  All these economic issues are duly addressed in the Union Budget itself.

1 Like

MANOJ HARIT (LAWYER)     27 March 2010

Patil Sir,

What is BCSBI & what are its functions & how to get in touch with it?

MANOJ HARIT (LAWYER)     27 March 2010

Dear Mr.Uday,

Thanx for the information. I couldn't agree more. This is the correct law position.

MANOJ HARIT (LAWYER)     27 March 2010

Parthsarathi Sir,

The Govt through RBI issues certain guidelines to take care of such situation but SMEs located in rural areas are seldom made aware of the same. Further even after approaching the Banker with these guidelines become futile due to lax attitude of the Bankers in rural areas. Hence the Borrower needs all the guidence from experts like your good self to keep the Banker away from attempting unlawful means to intimidate the Borrower.  

Parthasarathi Loganathan (Advocate)     27 March 2010

Branch Manager in any area is not the ultimate authority.  Laxity if found is always subject to scrutiny and review by the Bank's Management.  If in case any genuine needs of the borrowers are not fullfilled and deficiencies noticed, you are always welcome to approach the Regional Mangement of the bank concerned.

1 Like

kuldeep (advocate)     16 January 2011

list of defences to aggrived borrower in sarfaesi 

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