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Nikhil (Owner)     31 January 2014

Sarfaesi act auction relating to possession

Friends ,

               Bank has a symbolic possession(Though according to act , there is no difference between symbolic or physical possession, possession is possession) . Borrower has put a lock on property.No DRT or civil appeals are pending. Who will write a letter to DM  seeking actual possession and removal of lock pre/during/or post the auction process.  Is it the secured creditor (bank herein, as per section 14) or the highest bidder.  Bank manager has told that DM will entertain a letter written by highest bidder accompanied with the sale certificate issued by bank for getting possession (Actually removal of lock). 

Any pitfalls ? 

Comments appreciated.

 

Regards,

Nikhil



Learning

 10 Replies

Adv Archana Deshmukh (Practicing Advocate)     31 January 2014

In my opinion the secured creditor should proceed under the sarfasi act.

1 Like

Adv Archana Deshmukh (Practicing Advocate)     31 January 2014

In my opinion the secured creditor should proceed under the sarfasi act.

Advocate Bhartesh goyal (advocate)     02 February 2014

Secured creditor has to write a letter to D.M for  geting possession and removal of lock u/s 14[1]a,b of Act.

14. Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured asset.-

(1) Where the possession of any secured asset is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred by the secured creditor under the provisions of this Act, the secured creditor may, for the purpose of taking possession or control of any such secured asset, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such secured asset or other documents relating thereto may be situated or found, to take possession thereof, and the Chief Metropolitan Magistrate or, as the case may be, the District Magistrate shall, on such request being made to him-

(a) take possession of such asset and documents relating thereto; and

(b) forward such asset and documents to the secured creditor.

3 Like

MANOJ HARIT (LAWYER)     02 February 2014

1. U/s 14 only the Bank can approach DM for physical possession.

2. No request by the auction purchaser can be entertained by the DM directly.

3. Even the person participating in auction must not bid if the physical possession is not with the Bank.

    Otherwise it leads to protracted litigation.

 

Adv. Manoj Harit 

1 Like

Nikhil (Owner)     02 February 2014

Recent updates are:- Purchaser has already won the auction.Bank has symbolic possession and has closed the auction.Bank has Mother deed and its papers. For Physical possession Bank is providing some agents of bank who will get the physical possession by writing letter to DM . Agent has suggested that process would take around 15 days for purchaser. The fees would be around 10,000 rupees for agent work.

What can be done to avoid protracted litigation and not compromising on any laws and additionally discouraging 'agent' gimmicks.

-`Nkhil`

c.p.s. ramachary (1500)     05 February 2014

It is only the secured creditor who can move Sec.14 petition to CMM / DM. Do not believe agents who have no locus standu to do the job.

2 Like

Nikhil (Owner)     12 February 2014

Bank Has agreed to write  Sec.14 petition to CMM / DM.  

However, Bank has iterated it has sold the property as is where is and its role is over plus dues recovered. So purchaser will have to pay for charges of lawyer bank employs for making a petition to DM.  

Is levying these charges  justified ?.  

Nikhil (Owner)     12 February 2014

Bank Has agreed to write  Sec.14 petition to CMM / DM.  

However, Bank has iterated it has sold the property as is where is and its role is over plus dues recovered. So purchaser will have to pay for charges of lawyer bank employs for making a petition to DM.  

Is levying these charges  justified ?.  

c.p.s. ramachary (1500)     26 March 2014

No. The bank cannot burden the purchaser for taking actio. Send a notice to the bank for doing nedful at the earliest and in default, file writ petition the bank and RBI.

Purchaser has no obligation to bear the charges for action under sec 14 of the SARFAESi Act

1 Like

c.p.s. ramachary (1500)     26 March 2014

No. The bank cannot burden the purchaser for taking actio. Send a notice to the bank for doing nedful at the earliest and in default, file writ petition the bank and RBI.

Purchaser has no obligation to bear the charges for action under sec 14 of the SARFAESi Act


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