K G Srinivasan (Self employed) 03 September 2011

Sarfaesi order partly met

I had purchased a house at Mel Ayyanambakkam in the year 2009 with the builders influence the builder had arranged a housing loan through a nationalized bank by exaggerating the value and the painful side is the builder along with the manager had gulped the overcharged value of the property. I came to know the correct value only when I occupied the property in 2010. I was paying my emi for nearly a year and due to the stagnation of my business I was not regular for nearly 9 months and meanwhile there was a change of guard in the bank and the new manager visited my house and he cautioned me to close the account as the value of the property is far less than the laon amount. I pleaded for the time and he was not even ready to accept one or two emi’s and he sorted out the sarfaesi notice followed by the paper possession and then followed by the auction notice for which I moved the DRT through an advocate and though the court order stay for the auction with the following conditions;

a) Rs. Three lakh to be deposited with the bank immediately for stay.

b) The bank should come out with the detail account along with the charges and the balance amount to be paid within 30days.

I met the condition partly that is by depositing Rs. Three lakh and I could not met the other condition as the bank along with the various charges had demanded Rs.Six lakh and my advocate want me to deposit this amount so that we can go for trial. But I could not able to make it out due to the prevailing business situation and the court was also not willing to hear our side and the court had vacated the stay. My advocate informed me that let them go for auction again we will move the court. Can you guide me what I have to do in this situation? Only I need time of at least a two years so that I can redeem my property. I am very much confused what I have to do as I have got 2 school going kids and this is the only property I have. Please help ?

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5 Replies

RAJU O.F., (Advocate) 04 September 2011

Presume that your bank account is in Tamil Nadu. In which DRT your case is pending is not known. If you are aggrieved with the bank and also with the Order passed by DRT, better engage a good advocate and prefer an Appeal before DRAT Chennai, for remeady.

Anjuru Chandra Sekhar (Advocate ) 21 September 2011

If the Bank accepts the valuation of the property at the time of releasing the loan as Rs.10 lacs, then it should fix reserve price as more than Rs.10 lacs or at least near that range. If Bank is fixing very low Reserve Price i.e., less than 50% of the value of the valuation it has accepted to release the loan, then it is better you bring it to the notice of Ombudsman. Even in DRT convey to the Tribunal that without the active involvement of the Bank officials the Bank could not have accepted such over-valuation of the property at the time of releasing the loan.

K G Srinivasan (Self employed) 23 September 2011

Sir, today the bank officials had affixed the sale notice in our compound and directed to us to settle the loan amount with in 30days otherwise auction will be conducted. Shall i allow the auction to take place as iam sure that the bank cannot get the loan amount plus interest as per the loan saction? will you please advice? i do not mind in taking risk to see what the real value the auction will come to an end?

Anjuru Chandra Sekhar (Advocate ) 24 September 2011

"as iam sure that the bank cannot get the loan amount plus interest as per the loan sanction?"

What do you mean by this?! If the bank cannot get loan amount plus interest after sale of house for shortfall amount they can file a suit for shortfall amount in DRT/Civil court. So, if would be unwise to think that if Bank does not get full amount it will be at loss. Rather you will be at loss. I suggest you to go to DRT file S.A. making allegation that the house was over valued by the Bank in collusion with the Builder. And claim that the reserve price fixed is not fair. Obtain valuation report of the Bank and submit to court saying if valuation is correct then RP should be somewhere near it 10-20 percent this side or that side depending on market fluctuations in real estate in that area. If RP is much below that Valuation report, then claim in DRT that your allegation is true that is why it is so low.

Chennakeshava

Anjuru Chandra Sekhar (Advocate ) 24 September 2011

Obtain the valuation report based on which loan was sanctioned not the valuation report based on which RP is fixed, for submitting to court. Tell the court everywhere Real estate values are rising in market in that area but for my property they are coming down like this, because it is over-valued at the time of sanction of loan.