Legal Question in Banking Law in India
DRT set aside our application under securitisation act
can a bank purchase an asset in a purported public auction ,an asset ,taken over by bank itself,at a value determined by its valuer and with out any paticipation by public or any third party and bank being the sole bidder, bank purchased the assets.further bank did not pay the required 25%also on confirmation of the bid by banks authorised officer as required under sarfaesi act.BANK EVEN DID NOT TAKE THE CONSENT OF THE BORROWER to buy ,at a price not higher than reserve price.In the cited circumstances can such sale can be treated as legal?
4 Answers from Attorneys
Re: DRT set aside our application under securitisation act
No, we suggest you should challenge the sale.
Re: DRT set aside our application under securitisation act
The bank as a buyer can buy the property which was held by itself as collateral security.If you are purchasing the same property which is under your custody there is no such restriction that you have to fulfil the requirements like outside parties.But the bank has to publish the auction notice to welcome the general public to take part if interested it cannot do anything onesided.You can proceed to the civil court for restoring your property and your right.
Re: DRT set aside our application under securitisation act
You may challenge the sale before DRT with all the legal grounds available to you.
Re: DRT set aside our application under securitisation act
Bank cannot legally purchase the property which it is selling in the public auction under the SARFAESI Act. If in one or more auctions widely published, it does not fetch the upset price, then the Bank may write to the borrower that it is itself acquiring the property at the upset price from the authorised officer of the Bank and adjust the sale price in the outstanding without any necessity to pay up front 25% or any other earnest money. If what you say that the Bank has bid even at the first auction the property it purported to sell, it is open to challenge before the DRT. Consult local lawyer and proceed without waste of time.
Related Questions & Answers
-
Sarfaesi Act Can we take money from customer after 60 days demand notice, There is... Asked 6/24/09, 11:36 pm in India Banking Law
-
DRT Limitation Period ??? I would appreciate advise on knowing the limitation as per... Asked 6/24/09, 5:56 pm in India Banking Law
-
Exports from India - bank regulation We are exporters from India. Our Bankers are... Asked 6/24/09, 4:16 pm in India Banking Law
-
Rti does corporations or companies comes under the definition of citizen under... Asked 6/24/09, 7:50 am in India Banking Law
-
Writ Petition I had filed a Writ Petition against a Bank challenging applicability... Asked 6/23/09, 7:33 am in India Banking Law