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Under the sarfaesi act ,is it possible for the bank to sell the  property with out vacating the tenants here the tenant is the borrower itself..............if the sale happens who will be responsible for the further damage caused to the buyer who had purchased from the bank for exaple the tennt is not vacating and the delay in eviction cause damage to the notification its not specifically pointed out that the tenant is living in the property for replying to this question read with rule 8 sub rule 3 and rule 6(a) of security interest enforcement rules 2002...when i enquired with this provision to bank manager he tried to make things uncertain and whole lawyers as some fraudelent people....i want to react on this..whether i can stay the further proceedings based on this facts ...


 5 Replies

Priya Ranjan (Sr. Ex.Legal)     18 September 2008

Being a lawful tenant you can file a objection petipion for protection of your rights  before the DRT . You can also file a appeal  in the concerned DRT U/s 17.

J K Agrawal (Advocates)     19 September 2008

Interest of a tenant is protected under relevant rent control acts. the sale is subject to lease already existed. The purchaser gets possession as it is that is to say with tenant. The purchaser can not dispossess the tenants apart from following legal course.

Guest (n/a)     24 September 2008

It depends since when the tenants are there in proprty , if they are prior mortgage then they cannot be evicted without due process of law !  If tenants are after the mortgage they cannot claim protection as per Delhi High Court Judgment , if bank does disclose prior encumbrances auction purchaser can take legal action against the bank


Prakash Yedhula (Lawyer)     02 September 2009

  • The Bank is entitled to take actual possession of the secured assets from the borrower or from any other person in terms of Sec 13 (4) of the Act.
  • Any transfer of secured assets after taking possession of the same by the Bank shall vest in the transferee all rights in relation to the secured assets as if the transfer was made by the owner of such assets.
  • Any party aggrieved by such dispossession will have to take recourse to approaching the DRT under Sec 17(4) of the Act.
  • If the party is dispossessed, not in accordance with the provisions of the Act, then DRT is entitled to put the clock back by restoring the status quo ante.
  • Where the taking of possession comes in conflict with the local law (like Rent Control Act), the provisions of Sec 13(4) shall override the local law.
  • Sec 13(13) of the Act operates as an attachment/injunction restraining the borrower from disposing of the secured assets and, therefore, any tenancy created after such notice would be null and void.
  • Any tenancy created by the mortgagor after the mortgage in favour of the Secured Creditor in contravention of Sec 65 A of the Transfer of Property Act would not be binding on the Bank and in any event such tenancy rights shall stand determined once action under Sec 13(4) has been taken by the Bank.
  • When tenancy rights prior to the creation of the mortgage is claimed and such tenancy is disputed by the Bank, the person claiming tenancy rights has to approach DRT by way of an application under Sec 17 of the Act to establish such rights.

1 Like

Ritesh Shah (s)     11 October 2010


We have attached immovable property (residential house) under SARFAESI. Appeal filed by Borrower against the same also dismissed. Now we are proceeding for sale of the said immovable asset. The property also consists some movable itmes like furniture fixtures which are not charged to us. Do I require to issue a notice for eviction of such movable itmes ? If yes, under which sec / rule of SARFAESI.


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