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Shuaib Ahmed (xyz)     02 August 2021

Will the bank return remaining amount after auction ?

Hello Experts !

Need your precious advice in current situation. I am a loan defaulter and the bank as well as the DRT has served notice for initiation of recovery process and possession of the property after 15 days. My property is worth 12 crores and the due amount to be recovered by the bank is 4 crores. My question is if the bank does the auction of the property and recieves amount in excess of 4 crores then will it hand over the remaining excess amount to me after deduction of its recovery amount ? Also, I was given a conditional stay order years ago when the abovesaid property was purchased by a successful bidder. Back then The DRT ordered me to deposit 75 lakhs in the bank in order to get a stay which I then deposited and obtained stay. So if the bank proceeds with auction then will I get that 75 lakhs back ?

Please reply... 


 4 Replies

srishti jain   04 August 2021

According to the scenario you have mentioned, the bank has to refund the amount of eight crores to you as the money belongs to you legitimately. Also, it has to refund seventy-five lakhs that you have deposited earlier.

You can also object if the property is undervalued and justify your objection by conveying any better offer that you may have, so that the bank can make a decision. You can look for prospective buyers on your own and introduce them to the bank if you think that the property can yield a better price.


Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act), 2002, allow banks and financial institutions to auction assets allocated as security against a loan when a borrower fails to repay her loans. A bank charges a nominal late fee if you delay in payment of an EMI. If even after repeated follow-ups of the notice period, the borrower fails to pay the EMI, the bank declares the loan as a Non- Performing Asset (NPA), or a bad loan.  After that, it takes possession of the property. Then it either sells or leases out the property or assigns the right over the property to another entity to manage. After-sale of the asset, the lending institution keeps the outstanding dues and the remaining money, if any, is given to the defaulting borrower.

Hope it helps,



Shuaib Ahmed (xyz)     04 August 2021

Super answer Ma'am ! It cleared all my queries related to the abovesaid issue. Thanks a ton for your time and efforts ! 

Have one more doubt left in my mind. Can the bank take possession of the property to recover dues while it is being given on lease by the owner ?

srishti jain   04 August 2021

Yes, bank can take possession of the property and sell it to recover the dues.   

Shuaib Ahmed (xyz)     04 August 2021

Thanks a ton Ma'am ! Really Appreciate it !

God Bless You !

Best Regards !


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