Legal Question in Banking Law in India

A property is mortgaged with a bank(say bank a) for securing credit facilities.the credit facilties turn npa and bank starts action under sarfaesi act 2002.the prpoerty mortgaged with bank a is occupied by many tenants including bank b. the owner of the property approaches bank b for advance against rent receivable. so in case the bank b goes ahead with the finance and bank a takes possession of property in question and auctions it, what will be the fate of rent paid by bank b, whether it will be used to liquidate liability of owner of the property or will go to the new owner in possession of the property.


Asked on 10/08/12, 12:41 am

2 Answers from Attorneys
Aniruddha Pawse Aniruddha.P.Pawse Advocates

approach a local lawyer

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Answered on 10/08/12, 4:17 am
J. Radhakrishnan independent Practice

Bank b as a tenant has every right to adjust the rents as long as the borrower is the owner of the property. Once the borrower is replaced by a purchaser in Bank A's auction the bank b is liable to pay the purchaser the rents from the date of purchase

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Answered on 10/08/12, 4:33 am


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