Bank Auctions – The Cheaper & Smarter Way to Buy Your Dream House

Currently Economy is going through very Bad Phase…High EMI’s, No Salary Hike & Fear of Job Loss are giving jitters to majority of Salaried Class…By the way, i am also part of this Stressed, Depressed but still well Dressed lot :) but fortunately things are still not that bad for many.

Every phase is blessing in disguise for some irrespective its Good or Bad, i mean Bad phase is also beneficial or profitable for some lucky ones…Why, i will explain…In this uncertain environment, Specially Salaried class find it most difficult to serve their Home Loan EMI’s, which form a major chunk of Salary…Whenever a salaried class opt for Home Loan, it is based on certain assumptions of periodic salary hike, Job will remain safe, No unexpected expenditures etc etc..Unfortunately, if any of these assumptions go wrong then biggest casualty is Home Loan EMI…Most unfortunate part is, This world is emotionless i.e. Banks need their money back at any cost…If person default regularly then Banks put such properties on Auction to recover their amount…

Now Good Part (Buyer’s Perspective), Properties sold under Bank Auctions can be bought for as cheap as 30% from Current Market Rate. Yes, i am not kidding and there are reasons behind the same…Firstly, the price of properties sold under Bank Auctions is fixed according to Govt Guidance Value whereas Current Market Price is normally 3-4 times in upcoming areas and 2 times in developed areas…Secondly there are only few bidders in bank Auctions as these properties are usually bought by investors or people who have ready funds available for purchase…Hard Fact is that these properties cannot be bought through Home Loan..Lets see how..

Whenever bank auctions these properties, u will see 2 terms in Auction Notice

(a) Reserve Price: Reserve Price is Minimum Bid Price i.e. Starting Bid Price of Auction or Lowest Price at which Bank is willing to Sell the Property through Bank Auctions.

(b) Earnest Money Deposit (EMD): It is actually Good Faith Deposit i.e. Amount to be deposited before Auction Process by Potential Bidder showing that he is a serious buyer..Only after depositing EMD, a person is eligible to participate in Auction Process. EMD is refundable for unsuccessful bidders.

After Auction process, successful bidder need to deposit 25% of total Sale Amount (including EMD) on the day of Auction itself and rest amount needs to be deposited within 15 days from Auction…

I think, its quite clear that only person with ready funds can fulfill these stringent payment conditions…Now Let’s take practical example..Suppose Bank has put up Property A for Auction with reserve price of 50 Lacs therefore EMD will be 5 Lacs…Potential Bidders need to pay 5 Lac upfront in order to eligible for participating in Auction Process…

Assuming Person B bought property for 60 Lacs during Auction process. On same day, he needs to pay 15 Lacs i.e. 25% of Sale Amount…As he has already paid 5 Lacs as EMD therefore rest 10 Lacs should be deposited on the Day of Auction after Auction is over so that he fulfill condition of payment of 25% of Sale Amount i.e. 15 Lacs to be paid by Auction Date…Rest 45 Lacs i.e. 75% of Sale Amount should be deposited within 15 days from Date of Auction.

Recently, one of my friend requested me to accompany him for couple of Bank Auctions therefore it gave me an opportunity to understand complete process….Fortunate for my friend, he bought Auctioned Property 25% Cheaper then Market Rates.

Normally Notices for Bank Auctions are Published in B Rung Newspapers and not in most Popular ones…For benefit of my readers I am listing following websites which provide bit comprehensive data on properties listed for Bank Auctions…Hope these sites will be useful for my readers

http://www.foreclosureindia.com/

http://indiabankauction.com/

Lastly those buyers who would like to take cost advantage of Auctioned Properties through Loan route, can opt for Loan against Property…Only catch is, first you need to arrange for 100% funds from own sources or through Short term borrowing of 1 Month or so from Mortgage institution or from friends & relatives….After buying property through Auction, you can take Loan against Property and can repay the borrowed amount. Secondly, Interest Rate under Loan against Property option will be slightly higher compared to Normal Home Loan Rate & there is no income tax benefit available to salaried class in this case…Kindly do your homework properly in terms of cost benefit analysis before choosing this option.

Note of Caution: Properties under Bank Auctions are sold on “As is Where is & What is There is Basis” which implies Bank does not take any responsibility regarding Title of the property i.e. on encumbrance front, No liability of Bank. In the event of any legal dispute or any other claim on property, Bank does not indemnify the buyer from same. The complete responsibility of encumbrance rests with Buyer for auctioned properties.

Whereas in normal sale deeds, buyer can put a clause where the seller indemnify the buyer legally from any encumbrance on property prior to date of property registration therefore buyer is safe from all encumbrances prior to purchase.

Most important point is to insist the bank that Original Borrower of the Property, whose property is being auctioned by bank should become the “Confirming Party” in your Sale Deed / Registration with the bank so that in future he should not file case in court to cancel the auction.

It is always advisable to take help of Local Competent Professional Property Lawyer before participating in Bank Auctions as he can help you in understanding the rules and regulations. He can also help you to check Property Title and encumbrance on property (If any).

Copyright © 2011-2012 Nitin Bhatia. All Rights Reserved.

For personalized consultation on chargeable basis, you can call me at +91 94 800 21000


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  • roger

    Nithin u r so brilliant that u put the borrower in loop while buying property in auction. Most of the leading civil advocates are hardly aware of this fact and they simply mislead the auction purchaser with their bogus knowledge.

    • sampath Raj

      The irony is that even leading real estate portals recommend people to buy property in bank auctions without knowing the basic fact that banks convey defesable title to the auction purchaser.

  • Housingfinance98

    Mr. Nitin
    You have furnished accurate information regarding property auction process. I too in same business in delhi and mumbai. worked as HEAD OF LOAN DIVISION earlier. sunny sharma…housingfinance98@yahoo.com

    • monica gupta

      Hi Nitin, Thank you very much for all the valuable information. I am interested in buying a bank auction property. I have checked the above mentioned sites but there r no options available between virar and churchgate in mumbai, all r sold out. kindly advice where can i find list of bank auction properties .. it would if u could share ur contact details or email id so that i can avail more information on this subject. monicagupta7@gmail.com Regards Monica

      • Nitin Bhatia

        You may visit the office of home loan providers like SBI, HDFC or LIC to check out list of current properties put on auction. This list is normally put on the notice board. Secondly, you may check the Auction section of your local newspapers.

        In Mumbai, its little difficult to get bank auction property as middlemen or real estate agency mafia control the same due to high property prices but if you will put efforts, you may get good deal.

        You can post your queries in this comments section, i answer all the valid queries posted on my blog.

  • Kirit

    I need to advise on auction properties.
    I am planning to buy auction property in borivali mumbai. which costs around 30 L. and market price is 60 L.

    There are some auction agencies, which deals on the same.
    I want to take loan on same properties. All payment will be by cheque.
    According to agency, If I take the loan, I need to give 30% of property amount(9 L) to agency and remaining to the bank.
    But If I pay 100% amount (30 L), whole amount cheque will be to the bank.

    Is there any risk involved in buying auction properties ?
    If no risk involved then should I pay 30% to agnecy (as I want to take loan on the properties) ?

    • Nitin Bhatia

      I will not recommend you to deal through agency. You should hire a local lawyer and directly approach the bank for details on auction property. Secondly, you should directly approach bank for availing Home Loan.

      As suggested by me in article, you should insist that original borrower should be “Confirming Party” in your sale deed with bank.

      Lastly, i will not recommend you to pay to agency. All the dealings related to “auction property” should be directly with the Bank

  • Pralhadjana

    Dear Nitin,

    Thanks for sharing your experience but i dont have complete reseve money and the dealer says that he will refund every penny is the dealing does not takes place. Also, he will sell the flat at the reserve price and negotiate with the bank for this commission. He confirms that the property will be bought by the company and then the registration will take place between the company and me….pls guide….

    • Nitin Bhatia

      I will not recommend you to go ahead with this transaction through dealer. Kindly deal directly with bank.

  • Prasad kabadi

    what is the first step to buy bank auction property?
    from where we get list of all action properties?
    plz reply in details..

    • Nitin Bhatia

      You may take the help of Local Competent Property Lawyer to close the Bank Auction Transaction. You can get the list of bank auction properties from the 2 websites mentioned by me in my article. You can also refer local newspapers for details in auction section.

  • Manojm2

    Is this safe to purchase this property via broker who are exclusive in foreclosure property ? i got their detail from makaan.com Pls suggest..

    Manoj -Mumbai

  • Nitin Bhatia

    I will not recommend

  • Vikash

    I am buying a property which is purchased by person on bank auction.can i get loan for that property and is it safe to take such property..Please guide me ASAP.

    • Nitin Bhatia

      Please check the title of property, if it is clear then its safe to buy and you can apply for loan also.

  • Aakanksha Mishra

    Dear Nitin,

    in your advise below you have mentioned repeatedly that not to engage wtih any third party or a broker, could you please let me know that if we do what are the disadvantages for the same, since we have already paid out 30% cheque to the dealer, in this scenario what will be the best option for us?

    thanks
    aakanksha

    • Nitin Bhatia

      Dear Aakansha,

      There are 2 disadvantages
      1. Your money is at Risk.
      2. You will not get full monetary advantage of Bank auction property. Normally Broker ask for 2 cheques, one in the name of Bank and second in his name. Cheque in the name of Broker is his commission which is normally 25%-40% of total amount.

      If feasible, take your cheque from dealer. If cheque is not en-cashed yet & u have not signed any legal agreement with broker. You should immediately stop cheque payment.

      You shud directly approach bank for Bank Auction Property. Also hire competent local lawyer who can help in this process.

      Thanks & BR
      Nitin Bhatia

  • Yoginakochar

    In a bank auction, if the borrower(owner of property) is a wilful defaulter, he will not be a “Confirming Party”. How safe is to participate in that auction? Can he establish any claim later?What is the risk if the bank is not in possession of the property?

    • Nitin Bhatia

      1. Its not safe. Pls ask bank to make him confirming party.
      2. Without checking documents, i cannot say whether he can establish claim later by approaching court against the bank or not. Request you to hire local competent lawyer who can check all details and advise accordingly
      3. If bank is not in possession of property then i will not recommend you to participate in such auction.

  • Aakanksha Mishra

    Thank You Mr Bhatia, your advise was very valueble.

    Regards
    Aakanksha

  • Yogesh Jorapur

    excellent information…thank God and you as I was about to buy the disputed property…

  • Sonali

    Hi Nitin,
    I surely need ur help in this regards as i m very very new to real estate and planning to buy a bank auction property. I would love to talk to you and discuss my concern with you if u dont mind :)… Can you please get in touch with me on my mail address sharmasonali1804@gmail.com. I would be waiting for ur email.
    Thanks in advance.

    Sonali

    • Nitin Bhatia

      Hi Sonali,

      I have sent u a mail with all the details. Kindly check the same.

      Thanks & BR
      Nitin Bhatia

  • Anushka

    Hi Nitin Bhatia

    I am also need ur help in this regards as I am planning buy auction property(Mumbai). My email Id is anu_shranu@rediffmail.com.
    Thanks & waiting for your reply

    Anushka

    • Nitin Bhatia

      Hi,

      I have dropped a mail on ur email id. You may check the same.

      Thanks & BR
      Nitin Bhatia

  • Mahen_patil211

    i have taken a pre-sanctioned home loan from Axis Bank for an amount of 2000000 and on the same i have purchased a resale flat in Vasai ever-shine  sale agreement  value is 2250000 and also stamp duty and registration approx 160000.

    so at the time of disbursement bank ll include Stamp duty and registration or not?

    Pls let me know.

    Awaiting for your kind reply.

    • Nitin Bhatia

      As per RBI guidelines, Stamp Duty and Registration will not be part of Home Loan/Disbursement. 

  • Sam

    Hi Mr Nitin

    I m interested in buying a Auctioned Property too,
    I Have many doubts related to it.
    Could you plz help me.
    My email Id: sam150388@gmail.com

    • Nitin Bhatia

      Request you to post ur query, i will definitely answer the same.

  • Lalitabulusu

    Hi,
    I am Lalitha Akella and looking auction property at Mumbai and my budget is on 25 lacs.  Please help me how to contact bank people and how to participate in auction.  My mail id is lalitabulusu@hotmail.com

    • Nitin Bhatia

      I have mentioned couple of websites in my post, which contain listing of all bank auction properties or refer local newspaper which contain notice on such properties. You can also visit local office of Home Loan providers (HFC or Banks) to check on properties put for auction by bank. 
      You can yourself participate in Bank Auction but if u need help then you may hire a local competant property lawyer, he will help you with entire process.

  • Farida Patne

    Hello,
    I am interested in buying auction property/ flat in Andheri- Jogeshwari (mumbai).
    My budget is 25- 27 lacs. Please guide me how to contact bank people and how to participate in bank auction.
    My e mail id fypatne@gmail.com

    • Nitin Bhatia

      I have mentioned couple of websites in my post, which contain listing of all bank auction properties or refer local newspaper which contain notice on such properties. You can also visit local office of Home Loan providers (HFC or Banks) to check on properties put for auction by bank. 

      You can yourself participate in Bank Auction but if u need help then you may hire a local competant property lawyer, he will help you with entire process. 

  • PATILPR

     I WANT TO PURCHASE BANK AUTION FLAT, HOW TO MAKE REGISTRATION FOR IT TO BANK DIRECLY

    • Nitin Bhatia

      If you are highest bidder in bank Auction then you can register the property directly with bank

  • Lalitabulusu

    Do the bank will pay the registration charges? or we have to pay? Do we get any broker to deal all these things or we can directly deal with bank.

    • Nitin Bhatia

      You need to pay registration fees..You can directly deal with bank or hire property lawyer instead of broker.

  • atanu chakraborty

    Dear Mr Bhatia,my question is how can the bank not take responsibility for the property it is selling. if you are not the owner you do not hold the right to sell anything,right!

    • Nitin Bhatia

      Dear Sir, Bank is not the owner of property but just a custodian of Mortgaged property till they recover their dues. They have right to sell only to recover their dues from Borrower in case of default. If they can’t sell then no Borrower will clear the bank dues…

  • Subir Sarkar

    dear nitin,

    ARCIL register me an auction flat without signature of borrower.they did’t provide me any information about borrower and said borrower is not necessary,becouse it’s not rull/act, after auction of the property.they provide me 1)agreement copy of borrower with promoter 2)confirmation leter with promoter & bank 3)police intimation 4)notice 13/2 & 13/4 5) two news paper notification copy 5)original register paper of borrower and handed over flat. plz told me is it the legal ?

    contact me email- sarkarsubir006@gmail.com

    • Reuben

      You did not mention the mode of conveyance in ur favour. Have u been given sale certificate or sale deed .pl let me know. The title should be vested upon u in any of the above said

      methods.

      • Nitin Bhatia

        Title is vested only through Sale Deed not through Sale Certificate

      • SUBIR SARKAR

        SALE CERTIFICATE

    • Nitin Bhatia

      I will not recommend…As suggested borrower should be confirming party in your sale deed

  • Vikash

    Dear Sir,
    I participate in bank auction and deposit money to bank, now bank not ready to give possession.,…..they saying me that he sale the property a
    “as it is it basis” …pls suggests me what to do

    • Nitin Bhatia

      Hi,

      Pls check with bank on reason for not giving possession. If it is under legal dispute and you agreed to buy on “As is where is & What is there is basis” then you can’t do anything..You have to wait till legal case is over.

      Tks

  • Vssr Kumar

    definitely all the readers must read ur blog as well as queries posted below by ur followers.

  • keshav

    sir may i know what is the registration expense as in the stamp duty for bank auctioned properties . is it 2%>

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Registration expenses vary from state to state. There is no special treatment to Bank Auction Property in this regard. Standard Registration charges of your state will be applicable.

  • mkb

    Dear Nitin,

    Your blogs are very insightful & helpful. I have a couple of queries on this article. Hope you can provide the answers at your earliest convenience.

    >In case of bank auctions, considering the borrower is absconding & the said property has been vacant for many years before it is sold in auction. In your expert opinion, what should be next step in property registration. Also It will be very helpful if you can email me some important clauses to input in the property sale deed. The email id is enquiry20131003@gmail.com

    >In scenarios where the bank has provided the Sale Certificate, Lien removal letter, Newspaper auction notification copy but has not supplied the copies of circulars/orders sent to borrower under security interest act. What is the remedy in this case? Should this be pursued with the bank further on? Are they legally obliged to provide or does this depend on case to case basis../ In the event of its non-availability, is there any specific clause that can be input in the sale deed/agreement to safeguard the purchaser’s interest e.g. It is hereby informed that the bank has adhered to all legal requirements pertaining to the security act..so on.. Can you help and email me the appropriate clause to be used?

    I will be most thankful for your inputs in this regard and am waiting for your response.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      As i mentioned in my post that Original Borrower should be confirming party in your sale deed to avoid any future legal hassle. The auction can be legally challenged on many grounds therefore it is important to make original borrower as party to sale deed. In your case, original borrower is absconding therefore i will not recommend you to go ahead with bank auction

  • raja

    Hello Nitin,

    Thank you for an informative article. I visited foreclosure india site and found 2 buttons.1) Auction 2) posession for filtering the listed properties further. The auction properties have an auction date, whereas the posession properties dont have any auction date. So what is the status of these properties? Will they be sold or not by bank? Can the banks sell them without an e auction to individual buyers who visit their branch?

    Regards
    Raja

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Possession Property means that bank has taken either symbolic or physical possession of the property under SARFAESI Act after the borrower failed to clear the dues within 60 days of demand notice issued by the bank.

      Possession Notice is published in Newspaper cautioning General Public not to deal with the property. If anyone buy such property then Bank can charge the amount equivalent to amount defaulted from buyer.

      Possession Notice is a caution notice. Bank initiate Auction after 30 dates from date of possession (Symbolic/Physical). The Possession properties listed on the foreclosure india site are properties which have been served Possession Notice by the bank. If you are dealing in any property then you can just check whether any Possession Notice is being served on the said property from database. Possession Properties are put up for Auction after 30 days from the date of Possession.

  • Panduranga Acharya

    Hi sir,

    I have purchased a property in a Bank Auction last year and I was issued with sale certificate on 4th Nov 2012. same day defaulter has obtained stay against bank not to issue sale certificate and the matter was pending before DRT. I was also a party to the said case. court during Aug2013, vacated the stay since the sale certificate is already issued and a week before dismissed the matter for delay. can I go ahead register the sale certificate now?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Sale Certificate is not a Sale Deed/Registry. It is given to highest bidder and only shows that you have paid money to the bank for said property. Kindly approach bank and give written request to bank to register the property in your name. Till property is registered in your name, you are not the real owner of the property. Without sale deed, you will not be able to transfer property in future.

  • Anand

    Hi,
    I am planning to buy a auction property by ARCIL. I have verified the title and everything is fine. My lawyer is asking for 13(2) and 13(4) to ensure the notices were given as per the SARFAESI ACT. But the Bank is not ready to give a copy unless I submit the EMD. My question is can I submit the EMD and then withdraw before the auction date if the lawyer says notices are not good. Whats your suggestion.
    Regards
    Anand
    8884086832

    • http://www.nitinbhatia.in/ Nitin Bhatia

      I agree with you, you may submit EMD. If you decide not to go ahead afterwards then you should not participate in auction. You will get EMD back.

  • SANGEETA TRIPATHI

    HI I M SANGEETA HERE I WANT YOUR HELP SIR I WANT TO KNOW ABOUT ONE AUCTION FLATE WHICH I HAVE SEEN IN MUMBAI ADD FOR FLAT IS -104 H WING MATOSHREE CHS LTD , NEAR BHARTI PARK, MIRA BHAYENDER ROAD, MIRAROAD EAST THANE THIS PROPRTY IS AUCTIONED FROM DATE 30/10/2013 AND I GIVE DOWN PAYMENT 51000 AND REST IS 1340000 WANT TO PAY 15 DAYS BETWEEN AND NOW I AM CHECK THAT OLD DEFALTER IS PAID FULL AMT TO BANK SO WHAT WE WILL DO NEXT

    • http://www.nitinbhatia.in/ Nitin Bhatia

      It is not clear whether auction was completed on Oct 30 or bank issued notice for auction. Also whether you paid EMD or being a successful bidder, you paid amount on date of auction.

      If auction is completed then bank cannot cancel the same. Don’t worry, you will get your property. In case, bank only issued notice then defaulter can obtain the stay from recovery tribunal and claim the property back. You will get your EMD from bank.

  • Gaurav Gupta

    Dear Sir,

    I purchased a property in Dena Bank Auction in Jaipur. It is in a JDA approved colony. I got all its original Papers ( Sale deed , Registry chain, Kabja Patra, allotment recipts etc. ). I got registry of sale letter between me and Chief Manager Dena Bank also.It is a plot and around 3 months has been passed to buy it.

    What should i do now to make it more safe for future. As it is my investment for next 10 year.

    plz suggest.

    regards and thanks
    kkk992840@yahoo.com

  • http://www.nitinbhatia.in/ Nitin Bhatia

    I hope, the original borrower/defaulter was “Confirming Party” in your registration with bank otherwise if you got all the original documents then its sufficient.

  • Nayeem

    Mr.Nithin I bought a property in 2010 through SARFEASI auction in the yr 2010. I have been issued sale certificate and I duly registered it after paying the required stamp fee. When I tried to sell the property a year back I was told by the advocate of the proposed buyer that I could not sell the property as sale deed has not been issued in my favour. When I approached the bank for help they are not giving any proper replies and telling me every time to come after ten days or fifteen day. This has been going on for the last one year. Last week when I lost my patience I shouted at the chief manager he sternly warned me and said with the issuing of sale certificate the bank is ceased of matter and no sale deed can be issued. He poked at me saying that I could seek the help of court to resolve this issue.Mr. Nithin pl help me in this matter. I dont know what to do in this situation as my advocate is also totally helpless in this matter.

  • http://www.nitinbhatia.in/ Nitin Bhatia

    Property transaction is incomplete till the execution of sale deed. I mentioned the same in my post. You need to take the matter with bank. You should take following steps

    1. Hire local property lawyer and take his legal opinion in writing.
    2. With written legal opinion as base. Register complaint with Bank through Grievance Redressal mechanism and wait for official stand on same. If not satisfied, you may approach RBI appointed bank ombudsman of your area

    Even then if bank does not listen to you
    1. Through lawyer send legal notice to bank and request bank to respond to legal notice.
    2. File case against bank in consumer court (Deficiency of Service)
    3. Lastly file a civil suit against bank for fraud and forgery in transaction.

    • Nayeem

      Sir thank you so much for replying. I discussed your reply with my lawyer and he says that courts would not direct the bank to execute sale deed as the transfer is effectuated through issuance of sale certificate alone in bank auctions . More ever my lawyer says that properties are not transferred in the mode prescribed by transfer of property act in SARFEASI sale. I was not aware of the basic rule that I should have insisted the bank to execute sale deed in my favour after the completion of sale . I came to know of this lapse only when I tried to sell my property after three years. The value of the property I bought has almost doubled and the irony is that I am unable to sell it inspite of having a good buyer. sir pl answer me detail as to how to resolve this issue at the earliest. My email id is rosewell419@gmail.com

      • http://www.nitinbhatia.in/ Nitin Bhatia

        Under SARFAESI Act, Sale Certificate is completion of auction process as SARFAESI Act only deals with payments defaults and scope is limited only to recover the dues from defaulter through auction route. SARFAESI Act does not address the issue of transfer of ownership.

        Absolute Sale Deed is transfer of ownership of property. Now bank has recovered dues by auctioning the property and Sale Certificate is issued. It only means bank has successfully auctioned the property to you, recovered their dues & handed over possession of property to you.

        Property ownership can only be transferred through Absolute Sale Deed to be registered in Registrar office of your area.

        Legal opinion is divided on this topic but going by the judgement of Honorable Supreme Court of India. Any transfer of property ownership can and should only be executed through sale deed thus it overrides the provisions of SARFAESI Act. Please hire good lawyer and consult.

        • nayeem

          Thank you sir. I will seek the help of a good lawyer and I will let you know the developments and seek your advice in this regard at the earliest.

          • http://www.nitinbhatia.in/ Nitin Bhatia

            Sure

          • sandy

            Nitin ji,
            I am new to your blog and was reading all the queries as case studies, in teh above mentioned case, the question remain unanswered is , after completion of auction , who will be the party in sale deed, the bank (assuming bank has taken physical possession) , if not the bank, and also if the borrower is not willing to be confirming party , then how the sale deed will be executed.

            • http://www.nitinbhatia.in/ Nitin Bhatia

              In this case bank will only issue Sale Certificate.

  • Joel

    I heard there is a provision which benefits the buyer from litigation. Is there any law which protects the buyer.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      As i mentioned in my post, all bank auction properties are sold on “As is Where is and What is There is” Basis. There is no law to protect buyers from litigation’s. As i suggested only way to safeguard is to insist that original borrower should be “Confirming Party” in your Sale Deed so that he or his legal heirs should not approach court in future.

  • Suraj Patki

    hello sir,
    thank you so much for the blog with only right and to the point information it is very helpful..

    sir i wanted to ask you that i want to buy a property which is put to auction by a nagri sahakari bank (it is in Maharashtra and i don’t know whether the bank is authorized to sell the property) when i inquired with the property owner he claims that the amount remaining to pay to the bank is only 5000 rs and that they have notified the bank not to auction their property…but when i inquired with the bank the person responsible for auction told me that the amount is 1,39,000 (one lakh thirty nine thousand) he showed us the documents that were all original and told us there was no problem to buy the property and after the auction if i get the property i have to pay 25% of amount on the day and rest within one month.but i have towait for 1 month to see that the the original owner of the property can pay the amount,,if not the property will be registered in my name but he did not say anything about how the registration process will take place…i am really confused about the entire process ..sir i really want the property because it really in budget.
    sir please tell me what documents should i check before the auction ((the auction is within 10 days from now)) and what are the points that i should follow to safeguard the property if i win the bid…will there be any problem in future by the now owner of the property because i don’t think that the owner will be a confirming party in this case…. waiting for you answer…

    • http://www.nitinbhatia.in/ Nitin Bhatia

      If i am not wrong, you are referring to Dombivli Nagari Sahakari Bank Ltd. Bank is governed by RBI. As i mentioned in my other comments that bank auction property carry risk element. As i have not seen property documents therefore can’t suggest specific points but most critical point is to make defaulter a confirming party in your sale deed with the bank. If owner is not confirming party than risk element is much high. Also property should be registered in your name instead of bank only issuing sale certificate in your name.

      You should hire a local property lawyer who can help you in verification of property documents. Some of the imp documents are
      1. All original documents submitted by defaulter with bank
      2. Public Notice 13(2) & 13(4) under Sarfaesi Act
      3. Two newspaper notice copy. One English and another vernacular
      4. Possession notice
      5. Police Intimation

  • Nitis

    Hello Sir,

    I going to purchase the property in bank auction but in the terms and conditions section ,one of the claucse has been mentioned that possession of the property will be done by the buyer of that property . Actually I don’t have an idea .Please Guide .

    Another question is – If i will buy the property , how can I arrange money in short span . Is their is possibility by which I can be able to mortgage that property so that I can fund that property because the source from which I have arranged the money from , I have to repay them back in 2 or three months . Please give guide me .

    Thank you ,

    Nitis

    ( E-mail id – silvestor_007@yahoo.co.in )

    • http://www.nitinbhatia.in/ Nitin Bhatia

      I hope you have inspected the property. If bank has possession of property than no need to worry but in case property is not in possession of bank that there is every reason to worry. Ideally You should not agree to this specific clause related to possession. It is the responsibility of bank to handover peaceful possession of property to successful bidder.

      As i mentioned in my other comments, for bank auction properties it is advisable to arrange all funds from own source initially. After getting the possession, you may avail Home Loan against property. Another option is pre-approved loan i.e. 1st get your loan approved than go for bidding. A word of caution, Home Loan/Home Loan against property are not approved easily for such properties until unless title of the property is clear.

      Yes, you can avail loan against property after completing the auction process. It is advisable to be pro-active in this regard i.e. you visit the bank from which you wish to avail Home Loan and take list of all the documents required by bank for Bank Auction Property so that you can arrange all these documents in advance at the time of buying property through Bank Auction.

      • sana

        No bank would extend loan for the property which is going to be bought in auction. As Mr. nithin has said the bank could extend loan only after the property is registered in ur name. i would definitely say that the very bank which is auctioning the defaulters property would not sanction loan for buying the proposed property. More ever it is the duty of the bank to arrange possession. If it is least worried about arranging possession there is no point in buying such a property.

  • Suraj Patki

    thank you for your reply sir,,

    sir , when i asked the general manager of the sahakari bank he told me the auction is not going to be under the SARFAESIA ACT instead it is going to be under maharashtra rajya sahakari sansthan adhiniyam 1960 kalam 107(( महाराष्ट्र राज्य सहकारी संस्था अधिनियम १९६० चे कलम व नियम 107)) are they both same or different.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Sarfaesi Act is different from Maharashtra Rajya Sahakari Sansthan Adhiniyam 1960. In case of default, A bank can auction the property only under Sarfaesi Act. I would suggest you to hire a Local Property Lawyer, who can help you in understanding the clauses of Maharashtra Rajya Sahakari Sansthan Adhiniyam 1960. Yesterday, I tried to study this Act but it is available only in Marathi and unfortunately i can’t understand Marathi.

  • Subrahmanya Adiga

    Dear, sir, I am going to buy property in Bangalore as it is auctioned by UBI to some party. the possession of the property in that party who is selling to me. My question is when auction in taken place the defaulter of loan is absconding. Now I can repurchase same from party who purchased from bank through auction. He has original sale deed and EC and tax paid receipts. Any problem is there?. Please help me
    Subrahmanya
    M:9741126975 and my mail id is :adigask@gmail.com or adigask@rediffmail.com

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Dear Sir,

      I have taken liberty to delete your mobile no from your comment to protect the privacy of my readers. To answer your query

      If the original sale deed from bank is in the name of the person who is selling to you and he has all the following documents from bank than i don’t foresee any issue in this deal.

      1. All original documents submitted by defaulter with bank
      2. Public Notice 13(2) & 13(4) under Sarfaesi Act
      3. Two newspaper notice copy. One English and another vernacular i.e. Kannada
      4. Possession notice
      5. Police Intimation

  • Arun

    1) In case of sucessful bidder what are the steps to be followed to safegaurd succesful bidder rights on acutioned property under SARFAESI.

    2) How to verify if there is no additional unregistered charges on the property which is put for auction?

    3) In case if there is unknown charges on same property at the time of auction, who will own the responsibility of those charges once after bidding process is complete.

    4) Under Circumstances of Original borrower is not willing to be as “Confirming Party” which is likely in most of the cases what are best measures that can be done to avoid any legal complications?

    5) If Physical Possession is in the hands of owner, what is the process to get physical possession of the property?

    6) Which are all the key documents that needs to be collected from bank or any other authority?

    7) I have observed that there are two rules under which property auctions are carried out

    a) SALE UNDER RULE 38 AND 52(2) OF SECOND SCHEDULE TO THE INCOME TAX ACT1961, READ WITH THE RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993 – Generally with DRT auctions

    b) SARFAESI ACT 2002 with Bank aucitons

    which one of above these rule safeguards succesful bidder interest better?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You have asked very specific questions which can be answered only after going though all the documents related to auction but i am trying to answer the same from broader perspective.
      1. You need to ensure all necessary steps are followed during the auction as per SARFAESI Act

      2. Property is sold on as is and where is basis therefore you can only check whether there is any lien on property from sub-registrar office but regarding any other unknown charges, you cannot find out

      3. Successful Bidder will be responsible for all such charges

      4. You should insist on Original Buyer as Confirming Party else it might go into legal dispute in future. Bank cannot indemnify you against any legal action from original buyer / legal heirs.

      5. The bank can auction the property only after getting the physical possession by serving possession notice to the original borrower.

      6. Some of the imp documents are
      a. All original documents submitted by defaulter with bank
      b. Public Notice 13(2) & 13(4) under Sarfaesi Act
      c. Two newspaper notice copy. One English and another in vernacular language
      d. Possession notice
      e. Police Intimation

      7. SARFAESI ACT

  • Arun

    Thanks for the information :-)

  • Ab

    though the above information is protected by copy scape it is not a foolproof method. i was able to extract the complete text of the above writeup. use image instead.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Thanks for your valuable inputs. I will do the needful. Thanks again.

  • Somashekar

    Dear Nitin,

    Some queries from my end

    1) By law, is there protection for the buyer who buy such properties through bank auctions?
    2) I want to know if there are agents who do this work in Bangalore.

    With Regards
    Somashekar

    • http://www.nitinbhatia.in/ Nitin Bhatia

      1. No, you have to safeguard your interests. Pls go through above post regarding same.
      2. I will not recommend dealing with agents for bank auction property

  • Ramapada Acharjee

    Dear Sir,
    I bought Flat in Bank auction(State Bank of India) from a person who had SALE CERTIFICATE (for immovable property) . Fact is original owner > Statebank of India > Mr X (this person had SALE CERTIFICATE) > I BOUGHT FROM MR. X . Mr. X went to court and property Mr. X sold to me by court registration fees. Anything more required in this deal?
    Ramapada Acharjee
    ramapadaa@yahoo.com

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Sale deed is missing in this transaction. The transaction between SBI & Mr. X is incomplete as SBI has not executed sale deed in favour of Mr. X. Sale Certificate is not the proof of ownership. As per the ruling of Honorable Supreme Court of India, The property transaction should be registered in Sub Registrar office and any other mean/method of property transfer is null & void.

      • Ramapada Acharjee

        Dear Nitin ji…If Mr. X do this registry in his favour at present date to the court (Sub Registrar Office) then entire process is okay?

        • http://www.nitinbhatia.in/ Nitin Bhatia

          As i mentioned, SBI should register sale certificate in favor of Mr X in sub registrar office then Mr X can register in your name.

    • anwer

      Mr. Ramapada could you please tell us the mode of transfer through which you bought this property. First of all Mr. X is not in a position to execute sale deed in ur favour as the property has not been conveyed to him absolutely.

  • Sekar

    Dear Sir,

    I have identified a property put up on auction by HDFC for a flat built by one of the reputed developers in Bangalore and the papers are completely clean as I have also have other friends who have purchased flats in the same complex.

    Unfortunately, the original borrower of the flat passed away and hence the property is up on auction. I understand from HDFC that the borrower’s nominees (mother & wife) were okay to sell the house. Going through your posts below, I see that you have mentioned about the “Confirming Party” multiple times. In this case, given that the borrower is no more, request your advice on the alternate options please. Should I proceed and participate or ignore the same.

    Also, would you be able to advise if HDFC or any other bank would be able to provide a loan for this ? It might be difficult for me to arrange for the remaining 75% of the amount within 15 days in case I win the bid during the auction.

    Thanks,
    Sekar

    • http://www.nitinbhatia.in/ Nitin Bhatia

      HDFC cannot auction the property if the borrower is passed away. The property will now be inherited to the legal heir of deceased through WILL or under Hindu Succession Act / other Succession Act. The inheritor will be confirming party in your sale deed.

      If HDFC auction this property than the legal heirs of deceased may stake legal claim on the property in future.

      • Sekar

        Thanks a lot for the clarification. I understand from HDFC that the legal heirs were willing to dispose off the property through auction. So, is it safe to go ahead if I get a confirmation from HDFC that the legal heirs will be the confirming party and will be signing the sale deed ?

        • Sekar

          Dear Sir, Apologies for the continuous clarifications. Just had a word with the senior manager at HDFC. He confirmed that only he will be the other party signing the sale deed and not the legal heirs. He also said that this is perfectly fine under Section 13.2 and 13.4 of the SAFAESI Act 2002 where the financial institution has full control on the property. Request your advice on this please.

          • http://www.nitinbhatia.in Nitin Bhatia

            A Bank or HFC cannot issue sale deed. HDFC will only issue Sale Certificate to you which is not the absolute transfer of ownership. I will not suggest you to go ahead.

          • http://www.nitinbhatia.in/ Nitin Bhatia

            HDFC Manager cannot sign Sale Deed, infact you will get Sale Certificate from HDFC which is not considered as transfer of ownership as per the ruling of Honorable Supreme Court of India.

        • http://www.nitinbhatia.in/ Nitin Bhatia

          As i mentioned that first the property needs to be transferred to Legal Heirs either through WILL or through Succession Act than only they can dispose off. Without transfer, legal heirs being confirming party in sale deed does not have any legal standing.

  • Sid

    Dear Sir

    I have seen quite often that banks advertise for several properties for auction belonging to same party to recover their loans.
    Say suppose bank gets only one successful bidder against one of the properties listed in the advertisement.
    Can bank sell only one property and put rest for auction again.
    What if bank raises more funds via auction then required for the outstanding amount.
    Is notional possession enough for the bank or physical possession is required to auction the property ?

    Please help.

    Thanks

    • http://www.nitinbhatia.in/ Nitin Bhatia

      All unsold properties are again put for auction or are disposed off if bank find some buyer at Reserve Price.

      Bank only recover the amount due to Bank from auction, any amount received over & above the “amount due to bank” from auction is transferred/paid to the defaulter.

      Though under SARFAESI Act banks are auctioning property with notional possession but it is mandatory to issue possession notice by the bank and take physical possession. Even if bank is auctioning property with notional possession but it is the responsibility of bank to handover physical possession of the property to the successful bidder.

      • Sid

        Thanks.I also wanted to know if it is mandatory for banks to sell primary mortgage first and then recover remaining amount by selling collateral and guarantors mortgage property?
        Secondly can bank sell property at fairly lower rate then current market price. Say if current market price is 25 cr primary and collateral is 4 cr and guarantors is 1.6 cr. Can bank sell it for just 10 cr to recover amt ?

        • http://www.nitinbhatia.in/ Nitin Bhatia

          You are right, 1st the Primary Mortgage is auctioned and if bank is not able to recover their dues from primary mortgage than 2nd preference is given to collateral’s of defaulter and last preference to guarantors property. In certain cases, if bank is not able to sell primary mortgage due to legal issues than they may decide to cease Guarantors property 1st or sell collateral’s 1st.

          Bank arrive at Minimum Reserve Price for auction and property is being valued by certified valuers. It is normally circle rate / guidance value. Reserve Price may be much lower compared to Market rate depending on circle rare / guidance value. If you don’t agree with the Reserve Price fixed by bank than you can challenge the same in court before auction is conducted and take a stay on same.

  • Shikha Bhargava

    hello sir , a very informative article . I have a peculiar query . in my case defaulter is builder and I am flat purchaser . the fact that property is mortgaged was known to me in registered sale deed between me and old builder. the old builder defaulted for lack of funds and bank has auctioned the property to highest bidder . ..what is my status ??

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Unfortunately if the status of property was known to you than prima facie you don’t have strong legal case to pursue. It also depend on legal clauses mentioned in your sale deed regarding mortgage status of property i.e. is there a specific safeguard clause to protect your interests in case of default by the builder. I would suggest you to hire a competent local property lawyer who can help in this case.

      • Shikha Bhargava

        I have consulted 3 learned senior lawyers and all have different opinions. they say and I quote
        1 the old builder has given list of flat owners to the bank . the bank has mentioned in the auction notice to take note of bonafide purchasers and the same will be mentioned in the sale certificate to the new builder as well . he will honour yur rights . the new builder will be bind by the same terms as the old builder.
        2 file SA in DRT as third party . DRT can direct the bank to continue with auction but protect the rights of flat owners .
        3 only new builder is now in a position to complete construction. let him take over if he does not honour yur rights or asks for more price than what was agreed upon by the old builder , then go for civil suit .
        which one shud I follow

        • http://www.nitinbhatia.in/ Nitin Bhatia

          As i have not seen your documents but based on information shared, my personal opinion is that legal opinions are but confusing. Either of the lawyer has not understood your case properly. I would like to know whether property is getting auctioned under SARFAESI Act or is being sold under UNDER RULE 38 AND 52(2) OF SECOND SCHEDULE TO THE INCOME TAX ACT 1961, READ WITH THE RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993 i.e. DRT auctions..Pls confirm on this

          Legal Opinion 1 is referring to SARFAESI Act and Legal Opinion 2 is referring to sale by DRT.

          I beg to completely disagree with 3rd legal opinion.

          • Shikha Bhargava

            thank u sir . as much we know the property is public auctioned under sec 13(4) of sarfaesi act .

            • http://www.nitinbhatia.in/ Nitin Bhatia

              In this case, i beg to disagree with all 3 legal opinions. All owners should approach the court and request the court to issue injunction against bank auction and request the court to issue order to make all the owners as party to the case to safeguard owners interest. Till owners are not a legal party to this case, legally new builder is not bound to take care of their interests.

              Another option is to approach court and seek injunction against bank auction. Next step ask for permission from court to form association of owners. After forming association which is legal entity, Owners may bid for property and take control of property. After that association may decide to complete construction on its own or may hire a builder for same. In my opinion, this is the best option in the interest of owners.

              • Shikha Bhargava

                sir, stay for auction was demanded under sec 17 by two parties separately in DRT. one by old builder ,the result is : few formalities here and there , DRT has already given a go ahead for auction to the bank. second by flat owners ,PO is yet to pass an order. I am yet to decide which way to go …….

                • http://www.nitinbhatia.in/ Nitin Bhatia

                  I can understand the agony on personal front…All the best

  • http://www.nitinbhatia.in/ Nitin Bhatia

    As i have not seen your documents but based on information shared, my personal opinion is that verbal commitments don’t have any legal standing. Secondly, it is mandatory to take bank’s permission in case collateral property is being sold. You cannot challenge the same, if permission was not granted by bank.

    Details of Guarantors mortgaged property must have been mentioned in the MODT and Guarantor mush have signed the documents to mortgage the property. It is not necessary to mention the details of guarantors mortgaged property in sanction letter. Sanction letter is only principal approval of Home Loan with T&C of Home Loan. To answer your queries

    1. It is at the discretion of bank but not binding
    2. Under SARFAESI Act, bank has right to auction mortgaged property including collateral / property of guarantor to recover their dues
    3. Legally, it is treated as company
    4. Bank is not obliged, Email is not considered as official communication channel. Email is not permitted as evidence in court of law. it is advisable to maintain written communication in sensitive matters like this.

    I would suggest you to hire a competent local property lawyer who can help you after going through all the documents. I tried to share my opinion based on limited information shared. If you wish to avail my detailed opinion/consultation on chargeable basis, you may write to me at info@nitinbhatia.in

    • Sid

      Sir, Head office had given written permission to the branch to release collateral to help pay off loan amount. But bank did not have the permission to us. Yesterday even the DGM was surprised to know this and said their team members couldn’t process this properly.

      We ll as you said I will email rest to you directly.

      Thanks

      • http://www.nitinbhatia.in/ Nitin Bhatia

        As you mentioned DGM, It seems your loan is from Govt Bank / PSU Bank. if yes, You may file RTI application and request for bank’s internal communication regarding your case. It will help you in legal case & you may file a civil suit for stay on auction.

  • mukesh sharma

    Hello sir, my name is mukesh sharma sir i purchase a auction commercial property from hsiidc in panchkula (chandigarh) but property is pahar ganj new delhi i give the all amount & bank give me no dues certificate & give the physical possession sir i want a sales deep sir please suggest what document is requirement from bank so i did not take any problems for sales deed

    • http://www.nitinbhatia.in/ Nitin Bhatia

      I am assuming property is auctioned under SARFAESI Act. Documents required differ from state to state. Some of the common documents required are

      a. All original documents submitted by defaulter with bank
      b. Public Notice 13(2) & 13(4) under Sarfaesi Act
      c. Two newspaper notice copy. One English and another in vernacular language
      d. Possession notice
      e. Police Intimation

  • Syed

    Hello Nitin,

    I have recently participated and won an auction for a piece of agricultural land after reading this whole discussion on this page. This agricultural land was auctioned under Sec.19(22) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 by SBI under DRT’s judgement.

    I have paid the whole 100% amount well within the first 15days of winning the bid but on the 15th day the burrower too paid the amount he owed to the bank with all the penalties. It’s been a month now and the lady Manager at the bank is too lousy to assist with the query. The DRT recovery officers yells at the top of his voice that it isnt a inquiry board and he is not a peon to answer me and directs me to the manager of the bank who is a mere puppet. Sorry for writing all this but Im frustrated becoz of this whole annoying experience. After bugging this lady,she finally told me that a letter from me to the DRT recovery officer is still pending. I insisted to contact the SBI lawyer who has been dealing with all this in vain :(

    Can you elaborate on the legal way of getting my money back from DRT with the timeline involved if possible?I mean within what period of time i should** get back my money in full ?

    Thank you for your time on this.

    Regards,
    Syed

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Though i have not checked documents but as i understand you need to check whether Defaulter has deposited the amount within Redemption Period or has obtained any stay from DRT regarding auction proceedings. Some states allow for specific Redemption period during which if defaulter repays the amount with penalty than property is handed over to defaulter. If it is not the case than you may seek the possession of property instead of refund.

      In case bank has restored possession of property to defaulter than you may register separate written complaints with SBI and DRT for the refund of amount paid by you within 14 days. Please take acknowledgement of your complaint. If amount is not refunded within 14 days than you can also approach consumer forum & seek compensation for deficiency in service.

  • mohammad

    Dear Bhatia,
    Excellent blog.
    unique.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Thanks for liking the blog. Keep Reading :)

  • mohammad

    Dear Nitin,
    I am living in gulf.
    I want to participate in auction.
    What are the documents should i keep ready before buying auction property?
    Is it possible to buy the property without visiting India as i would like to give POA to my brother?
    Please suggest strategy.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You don’t need any additional documents to participate in auction. You need PAN, Id proof and address proof as it is required in normal property purchase.

      You can participate in auction without visiting india. You can give POA to your brother but it should be signed by you in front of designated official of Indian Consulate where you are living and should be attested by Indian consulate otherwise it is not valid in india.

  • mohammad

    Which is better option for NRI investor?
    To purchase bank auction property through DRT or through ARCIL?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Asset Reconstruction Company (India) Limited (Arcil) is asset reconstruction company, It buy Non-Performing Assets (NPAs) from banks and other financial institutions and than conduct auctions.

      Debt Recovery Tribunal is set up by Govt of India to help financial institutions recover their bad Debt. DRT can pass order like Civil Courts in India.

      Between ARCIL and DRT, I will choose Auction Property through DRT.

  • mohammad

    I contacted Arcil staff.He said that borrower will not be involved in sale deed.
    Is it unsafe to buy the auction property from Arcil in this case?
    What is the meaning of symbolic possession?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Yes it is unsafe. Secondly, ARCIL is not in physical possession of the property. The big question is how will you get the Physical Possession of the property.

  • mohammad

    Any one who has experience with DRT auction?

  • http://www.nitinbhatia.in/ Nitin Bhatia

    I need to study the entire case before i share my inputs. As you mentioned that ICICI sold this asset to ARCIL which implies that ICICI Bank was not able to recover the dues under SARFAESI Act. You need to find the reason for same. You also need to check whether any court has issued any injunction in this case. Complete risk analysis can be shared only after going through all the documents related to auction.

  • SAS

    Can ARC sell property which it has acquired as part of NPA portfolio from bank without auction in a private deal ? If yes will it require a tripartite agreement between buyer, bank and ARC? Also will DRT which has handed over property to bank issue a certificate of sale ? – would really appreciate your views.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Legally ARC has to adopt transparent approach to sell the property. The sale of assets by ARC is no different from the sale of assets by state finance corporations and others organizations with special powers of recovery.

      Courts have passed several judgments that there is should not any lack of transparency in causing a sale of the borrower’s assets, because every single penny realized from the sale goes to the credit of the borrower. ARC acts as the trustee of the borrower in exercising the rights of sale of the property. Hence, any opaqueness in the sale like private auctions is illegal. Though ARC maintain stand that they cannot be forced to disclose the particulars of the sale but it is not right therefore they cannot sell through private deal.

      Certificate of Sale will be issued by the bank not DRT.

  • mark morrison

    in this case what are the duties of the purchasers advocate and the duties of the vendors advocate ?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Buyers advocate ensure that auction process is followed as per the law and also all the documents are in place. Vendors advocate ensure that auction is conducted in fair manner and it should not be private auction.

  • Arjun

    Hello Sir,

    I saw your blogs on your website, it was really very informative, you are doing an amazing job, lot of my questions got answered. I am about to do the first deal for bank auction flat. would you advise to approach bank directly or real estate agents or any private companies who does these deals. OR please suggest any other safe method to buy such flats.

    Also one last question, how to get the title check done, does it needs to be done through any lawyer or any private firm can do this, which option will you suggest??

    I would be obligated if you can share any more information required for a fresher in such deals.

    Thanks a Ton.

    Arjun

    • http://www.nitinbhatia.in/ Nitin Bhatia

      As i mentioned in my post, you should approach bank directly. For title verification, i suggest that you should hire a good property lawyer. As bank auction carry certain degree of risk therefore it is absolutely necessary to hire a property lawyer.

  • GK das

    Dear Sir, I like to read your blog always. I am from bangalore, Assest reconstruction company arcil arms is conducting an auction in bangalore on 17.07.2014. they have published this acution details in indian express news paper on 10.96.2014. I would like to participate in that auction. When I enquired about this auction, I came to know that in that auction property list, 10 out of 7 apartments documents are not there with them.Can I buy an apartment which does not have any docments? Is possible for me to buy an apartment without documents? i need your advice.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      In my opinion, it is not safe to buy auction property without original documents.

  • GK das

    sir Arcil arms does not have any documents of few flats, including title deed. is it safe to buy that apartment?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      In my opinion, it is not safe to buy.

  • http://www.nitinbhatia.in/ Nitin Bhatia

    In my opinion, it is not safe to participate in such auction.

  • SP SINGH

    First get my well wishes & lot of thanks for presenting your valuable blocs, i also gone thru your lot of blocs on SARFAESI ACT Auctions. Now I would like to invite your suggestions on the following points:-

    1. If bank or DRT put on to auction a certain property, but bank / DRT do not allow us to see the title deed, what is the process / act or section, under which we can see the title-deed ?

    2.If DRT court sell a property ( Either borrower’s assets / or attached assets ) without having any kind of property-documents, but they issue their sale letter duly signed by Authorised officer, is it safe for the purchaser? could original owner of this property can challenge it in upper- court?

    3. If a property owner take loan from 3/4 banks and later on he default the loan payment, and any one out of 3/4 lending bank success to auction this property thru DRT court, can DRT court ignore the recovery appeal of other banks. Is it safe to purchase such kind of property?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      1. It is not mandatory for bank to show original title deed. You only ensure that bank is in possession of all the original documents of property. If all original documents are in place then no need to worry. If you have property details you can pull out certified copy of title deed from sub-registrar office.
      2. No, it is not safe. Original owner will definitely challenge the auction process.
      3. No, it is not safe. Availing loan from multiple banks for same property is a case of cheating and other banks will stake their claim on property to recover their respective dues. The property will be under litigation. Other banks may not approach DRT but will approach court of law to recover their dues.

  • SP SINGH

    Sir , The bank who is selling property thru auction can consider Home-loan on the same property, as the original title-deed and the propperty in auction is already legally certified by this bank /

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You may check with respective bank regarding the same. It is at the sole discretion of the bank.

  • SP SINGH

    I am very very thankful to you for your kind valuable reply.

  • Kazi

    Dear Sir,
    I am very very tankful to you for your valuable advices. I am planing to buy a property from Arcil Auction (ICICI Bank).

    The property is sealed and locked by Arcil, but there is another normal lock by the landlord. According to Arcil, the landlord has sold the property to some other guy but that guy is unable to show any property paper to arcil.
    My question is that, what are the original documents should be with the bank or Arcil so that there will be no problem in future? And after the registration of the flat, can somebody come and claim for the ownership of the flat? Is it possible?
    Please reply.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      1. Bank / Arcil should have all key documents like all previous original sale deeds and other link documents. Besides this you need to check whether ARCIL has notional possession or physical possession of the flat to be auctioned.
      2. If the owner has simultaneously sold this flat to someone else then in all probability this property will go under litigation.

      My personal opinion,you should not buy this property.

      • Kazi

        Thanking you so much for your fast response. Arcil has following original document of that property which I an planing to buy.
        * Application for loan
        * Approval for loan
        * Identification Proofs
        * NOC by builder
        * Agreement for sale
        1. Are these documents sufficient to this buy this property?

        2. Although Arcil don’t have any registration certificate of this property. But they are saying they will register the property freshly in my name. Is this registration valid and legal?

        • http://www.nitinbhatia.in/ Nitin Bhatia

          1. I don’t think so. You need to find out from which bank ARCIL has bought the property, What all documents defaulter submitted with bank and why sale deed is not part of same.

          2. Though registration but property might be under litigation. As i mentioned in my post, you insist that defaulter should be confirming party in your sale deed/registration with ARCIL.

  • Samir Mehta

    From:
    SAMIR MEHTA
    SHREE VARDHMAN AGENCY
    CELLAR-39, MODERN MARKET
    NEAR AMBER CINEMA
    JAMNAGAR-361 008
    GUJARAT – INDIA
    PH. NO. 91-288-2664373
    MOBIL: 98986 96516
    Email: shreevardhmanagency@yahoo.co.in

    Hello Dear
    Nitin Sir

    Your Blog is very useful to new buyer for buy property with safety. We are very thankful for share your knowledge of real estate to us

    I want to buy shop from co-operative bank lien mortgage property of borrower, In present Borrower’s total due with interest in bank is higher than the shop’s Market Value, because In past he took OD or CC by property mortgage & other security ( like goods stock etc) is also include in his security for OD-CC borrowing from Bank.

    Now bank administrative director has say me that he want to sale his property to make that borrower debt free from Bank. Bank director asked me to tell that at which price you want to buy that property i am want to help that borrower because he is from good family.

    I want to know that

    (1)- If i purchase the property at the market rate from bank there after if borrower’s loan (CC or OD) is still due,

    (2)- If bank do completely settlement of all his due by sale borrower’s property

    which is legally correct situation for me (1 or 2) to buy this property on above both condition.

    I also want to know that

    A Co-operative Bank can legally sale me property directly by private treaty without public auction or tender

    Please give me reply as soon as possible on above both question
    so i can take the decision to buy that property
    Thanks
    Yours Faithfully,
    S. B. Mehta

    • http://www.nitinbhatia.in/ Nitin Bhatia

      I have not checked property documents therefore cannot provide detailed steps on same but imp question is how the borrower will arrange for balance funds i.e. difference between loan due and Market Value. Obviously no one will but the property at value higher than market value.

      Since a bank cannot sell property directly to you without initiating SARFAESI act therefore best possible scenario for you that you may ask borrower to arrange balance fund (difference between loan amount and market value). You can directly enter into an agreement with borrower and then you can clear the loan of borrower with bank. He will pool in his contribution for clearing the balance loan. The property can be transferred in your name by the borrower directly.

      I will not suggest to deal directly with bank in this case.

      • Samir Mehta

        To,
        Dear Nitin Sir
        Thanks you very much for reply but i have still some query

        If bank ready to make settlement of all his due with interest on the sale of his shops, than is it possible that i can buy property directly from Bank without auctions procedure. Can it possible by SAFAESI act or by any legal act.

        Because in my understanding conversion with bank administrative director, he will want to do complete settlement (borrower’s all due & interest of OD CC) for borrower against borrowers’ shop

        Is it Possible?

        Thanks
        Yours Faithfully
        S. B. Mehta

        • http://www.nitinbhatia.in/ Nitin Bhatia

          As i mentioned, Bank cannot sell the property without initiating loan recovery process. They need to declare the loan as NPA (Non Performing Asset). It is normally done under SARFAESI Act. After loan account is declared NPA, bank send possession notice to borrower.

          Bank’s administrative director is misguiding you. Bank cannot act as mediator between buyer and seller for settlement of dues. It seems bank is helping the borrower may be due to personal relation.

          My simple query is if you clear the loan of a borrower through bank then how will you get the possession of property and who will register the same in your name.Is bank ready to issue sale certificate and whether bank has physical possession of property to be handed over to you after the dues are cleared. Whether bank has declared loan account as NPA and initiated loan recovery process. Please get answer of above queries before you proceed.

  • satya

    Respected sir,
    I would like to thank you for your in sight on the bank auction properties. would also like to ask you that are you sure that no HOME loan would be given under any circumstances to these auction properties?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      If the auction is conducted by Bank A then same bank may consider Home Loan request but otherwise Bank Auction window is so short that it is not feasible to avail Home Loan. As i mentioned you can avail Loan Against Property after the auction

  • Ruchi

    Dear Mr. Nitin

    We had bid for a court auction flat and won the bid!
    The initial 25% payment has also been made. We plan to take a home loan for the rest 75 % which has to be paid within a month from the date of order. The problem is arising when we are going to the banks to ask for a loan! They want the original copies of all the documents related to the previous owner (agreement, share certificate, NOC from family members, his will). The owner is no more and the court has the duplicates of few but not all the documents. In this scenario, we suspect that the loan will not get sanctioned on the grounds of not being able to show the original documents related to him. Will any letter or order from the court help us in getting the loan?
    Please guide us in this.
    TIA
    Note: The owner, in his will, had mentioned to give evrything of his to the charity.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      As i mentioned in my post that banks don’t prefer Home Loan on auctioned property. Only solution is that you approach the same bank with which the property was mortgaged by the previous owner. They might consider Home Loan option.

      2nd option, you may try to get court order that some documents are lost by bank or previous owner but it is long process and may take time.

  • Syed

    Dear Nitin,

    Scenario : Done with the e-auction at SBI under SARFAESI act, paid the 100% bidding amount, got the sale certificate, got this sale certificate registered in my name through the authorized bank officer. Now the fuss started.

    This vacant plot land has a thatched house at the entrance of it. This land belonged to the same thatched house owner too who was a guarantor for the defaulter. This thatched house is at the entrance, blocking the entrance view of the plot and it sits exactly between the plot and the pavement land of the municipal corporation between the plot and the the RCC road…Looks like he is not happy with the money he is receiving after deduction of expenses and final cost from the bank and now threatens that he hasn’t accepted the money (remaining after deductions) from the bank, despite of the bank sending him a notice for collecting the same. He is advising us not to take any steps to enter the site as he feels he is still the owner and will pay back the bank the defaulted amount.. Auction was last month 13th i.e June 2014. while registration was on 11-June-2014

    Bank assured me that they have written it to the District collector on this matter of encroachment of the municipal road extension land and requested them to remove it if deemed necessary.

    Question now is, Will this whole situation end up in a litigation from this guarantor? This is my second attempt with the bank auctions, while first was only half a success as you are aware.

    Do I have to use force to clear my entrance to the road? This guarantor belongs to the SC/ST community and anything we utter will be used against us to file us under the non-bailable act. So should be done legally.

    Kindly advise

    Thank you!

    • http://www.nitinbhatia.in/ Nitin Bhatia

      In my opinion, let bank handle the situation though It may end up in litigation. Also you have not mentioned that whether bank had mentioned notional possession or actual physical possession of the property in auction documents. If it was actual physical possession then it is the responsibility of bank to handover peaceful physical possession. You may appeal for cancellation of auction if it does not happen.

      I will not suggest you to use force.

      By sale deed i mean document related to sale should be registered in Sub-Registrar office. If bank is registering Sale Certificate in SRO by paying Stamp Duty then Registered Sale Certificate is as good as Sale Deed. Don’t worry on this. Only concern is that defaulter should be confirming party in such acts else the property may go under litigation.

      • Syed

        Thank you for your swift return Nitin. While the possession Notice was issued on 19-11-2013.Subsequently the Bank has applied for taking possession under law and proceedings in the regard has been passed by the Chief Judicial Magistrate of our district on 15-04-2014 and as per the said proceedings the physical possession of the aforesaid properties have been delivered in favor of the Bank through its Authorized Officer. The plot clearly advertises that this property belongs to SBI and trespassers will be prosecuted.

        Also as I said the issue with the thatched hut at the entrance on govt.land between the boundary of the plot and the RCC road, blocking the entrance to the plot.

        On the line ref. to confirming party, does that mean the defaulters,guarantors have to come sign off the sale certificate registration or just mentioning their names in the sale cert would do? Kindly enlighten.

        Thank you in advance.

        • http://www.nitinbhatia.in/ Nitin Bhatia

          You should not link this issue to auction rather its a case of encroachment or trespassing.

          By confirming party means defaulter or guarantor should sign the sale certificate or sale deed.

          • Syed

            Thank you Nitin. Would in any case, a willful defaulter come in and sign off the deed during registration? They will either be in pain for loosing their property or will frown at everyone who try to buy that property. Is this absolutely necessary as the bank took over the custody of the property and has the rights to recover its debts through auction ? While the same authorized officer signs off the registration deed, so the liability goes to the bank first as they are the authorized sellers as per the mortgage deed.

            Kindly enlighten as other readers might run into the same confusion.

            Thank you again

            P.S : I ain’t challenging your suggestion/advise in anyway possible. Instead, I’m trying to figure out what does this SARFAESI act does to protect the buyer’s rights and investment through this auction

            • http://www.nitinbhatia.in/ Nitin Bhatia

              The total amount collected from Bank auction property is divided into 2 parts. Bank retain their dues and balance amount is paid to the defaulter e.g. if property is auctioned for 40 lakh and amount due to bank is 30 lakh. The balance 10 lakh is paid to defaulter by bank from auction amount. Bank can always withhold balance amount till the defaulter is ready to sign the sale deed as confirming party.

              • Syed

                Thank you Nitin.. Now that the registration has been completed with the authorized officer from the bank to be the confirming party in the deed, would it hurt my situation. Also banks here are very adamant as they keep saying…SARFAESI act doesn’t need any registration, but we can do it for your convenience as a favor and nothing more and they use the terms as is where is so many times ….God i feel like biting their necks off myself :D

                • http://www.nitinbhatia.in/ Nitin Bhatia

                  As i mentioned in my post, If defaulter can be confirming party then that would be great else you may go ahead with registration of your Sale Certificate. All the best

                  • Syed

                    Thank you and really appreciate your contribution to the society by enlightening them with your knowledge transfer..Keep up the good work. I also started passing what I have learnt from you to my friends…

                    • http://www.nitinbhatia.in/ Nitin Bhatia

                      My Pleasure :)

  • sathish

    Dear Nitin,

    I find the post is very much useful interms of Loan against property!

    I need your guidance on the following

    1. Planned to buy a property through auction this month end(July) with 100% finance on my own.

    2. Auction was done by one of the private bank and the whole property name will be transferred to my name @ August

    3. Will it be possible to get a loan against property for the same home?Banks like Citi, ICICI said that they don’t finance for auctioned property even if it is on my name.

    I am confused with mixed responses.Please help me out!

    • http://www.nitinbhatia.in/ Nitin Bhatia

      As i mention in my other comments that it is very difficult to get loan on auctioned property. Best option is to approach the bank which has auctioned the property else you may check with Tata Capital Housing Finance, India Bulls or DHFL.

  • SP SINGH

    Dear sir,
    Greeting from me………..
    I say that recently, I had win a bank auction for a piece of land having plot area 175 sq yards, till day, I have deposited only 10% EMI to the bank, but after the winning the auction I check the actual size/ measurement with measuring tap and found that out of 175 sq yards, approx. 30 yards of land has been illegally occupied by the neighbour plot owner. My confirmation of bid is still under the consideration of the said bank. Now pl. suggest me what to do in this situation.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You may approach the bank and give a written complaint regarding the same i.e. to get illegal encroachment removed from the site. If bank is not able to do this then you can request for cancellation of your bid on the ground of illegal encroachment at auctioned site.

    • Jash

      Dear Sir,
      Thanks for such a useful blog.
      Please let me know on Inter-se bidding/auction post submission of an offer accompanied by EMD. Is it compulsory? rather Fare ?
      In such case what can be the strategy for bidding ? should it be just baove the Reserve Price ? Because one will have a chnace to revise the the offer during inter se bidding.
      I would be obliged to have your views on legality of such provision and our strategy as a bidder.
      Regards,
      Jashvant

      • http://www.nitinbhatia.in/ Nitin Bhatia

        It depends on terms and conditions declared by the bank. Normally a clause is included that inter se bidding would be held among eligible bidders and highest bidder would be declared successful. This provision is fair and legal.

        Strategy should be to 1st find out the market value of property being auctioned. Say it is Rs 100 and Reserve Price is Rs 65 therefore in my personal opinion, in any scenario you should not bid more than Rs 80. In many cases, you will also find dummy bidders in such auctions to inflate bids but don’t get carried away. If you are not getting auctioned property at 20% discount then its not worth taking the risk.

        • Jash

          Thanks a lot for prompt and specific reply to my query.
          A. If it is among the eligible bidders; As a strategy ,should we give an offer just above the base price along with EMD DD ? I think we have an opportunity to revise the bid upto feasible higher as guided by you up to 80%.

          For example given above :All offers above 65 are eligible hence my offer shouldn’t be near 80 initially.
          Pl let me have your feedback.
          B. can you pl throw some more light on the additional expenditure to be incurred towards registry, society dues etc. ? For better estimation of my final cost of the property.
          Thanks…..

          • http://www.nitinbhatia.in/ Nitin Bhatia

            1. In inter se bidding, 1st bid should always be Reserve Price to be eligible for bidding. In many cases, there is only 1 bid therefore you should not overpay and can always revise your bid
            2. You need to check auction notice for same because all such properties are sold on as is and where is basis. You also need to check independently any other amount due to society or whether property tax was paid or not.

            • Jash

              Thanks a lot for valuable inputs.
              Regards,
              Jash

  • SP SINGH

    Thank You sir, request for cancellation proceeds.

  • Indra kumar

    Dear Nitin,

    your blog has help me understand buying properties under auction. I’ve one specific query and i would be glad if you could clarify that.

    we’ve identified a property (FLAT) to buy under auction. The Bank is planning to auction under DRT Act. It has all the original Documents like Sale Deed, Development agreement and patta and they don’t have the corporation approval for that particular flat. They are NOT in physical possession of the property. The Bank Manager says, it’s not a problem and physical possession would be taken after they possession.

    Pls. advice if it is a good to buy this property. would very much appreciate your help.

    Regds
    Indra kumar

  • Indra kumar

    Dear Nitin,

    your blog has help me understand buying properties under auction. I’ve one specific query and i would be glad if you could clarify that.

    we’ve identified a property (FLAT) to buy under auction. The Bank is planning to auction under DRT Act. It has all the original Documents like Sale Deed, Development agreement and patta and they don’t have the corporation approval for that particular flat. They are NOT in physical possession of the property. The Bank Manager says, it’s not a problem and physical possession would be taken after the auction

    Pls. advice if it is a good to buy this property. would very much appreciate your help.

    Regds
    Indra kumar

    • http://www.nitinbhatia.in/ Nitin Bhatia

      As i mentioned in my other comments also that Physical possession is must to safeguard the interest of a buyer therefore i will not suggest you to buy a property under auction with notional possession.

  • Purushothaman

    Dear Nithin,

    I am going through a trouble over the purchased property.
    1.The seller who sold me said there is no litigation in the property at the time of buying.
    2.Now we were building the a house and the construction was going on smoothly for 6 months.
    3. Then a lady came n said she is the order and u should build the house as this property is in dispute.The Lady had a patnershipfirm containing of there family members only and had appointed her brother through GPA in 2006 for any sale and purchase of lands . The brother who had the GPA and purchased the property. But due to difference in the business they partied away. And the brother had sold the property to our seller.
    4. Before purchasing the land we had put up an newspaper ad and waited 3 months there was no claims at that point of also and even during the registration day.
    5. The saledeed, katha,katha extract all has been done in my name. And i got the approval of the local office to construct the building also.This was done nov 2013
    6. The police came and stopped our work saying the site is under dispute and there is an interm order from the court in the month of April 2014 . When checked the court order it said the Her brother and my seller should not alienate the property. where as our name was not mentioned and the police took a copy of our documents and did not even issue a memo also.
    7.She has applied to the court do declare the sale of his Brother and my seller as void

    Please let me know what to do…. I am in

    • http://www.nitinbhatia.in/ Nitin Bhatia

      I suggest you to hire a property lawyer and also you can show your sale deed to lawyer who will suggest what all can be done based on legal clauses in sale deed.

  • Somashekar

    Hi Nitin

    Similar to what has been mentioned below on the litigation of a property. Suppose the title deeds deposited with the bank are defective and the bank auctions the property. What is the position then. Let me give you the example. Suppose a site has been sold to X and 2 years later the same site has been sold to Y. Y took a loan from the bank and then defaulted. The bank auctioned the property. Now X has sold it to Z and Z has control over the the property? What is the status of the auction?

    Thanks
    Somashekar

    • http://www.nitinbhatia.in/ Nitin Bhatia

      It will go under litigation. Bank will auction the same and will show notional possession over the property to potential bidders. It also depend whether Z bought 1st from X or Y bought before X sold to Z.

  • Reddy Reddy

    hi nitin sir,
    got a plot worth 8lacs in Bangalore(icici ban’lore) when i was working there and paid EMI in Bangalore.And when i got back to Hyderabad i paid my EMI to nearest icici bank in Hyd. And before coming to hyd i gave my land-line and mobile no of Hyderabad to bangalore icici bank.
    They even have my hyd address also in passport as address proff,But they auctioned the land without intimating me in hyd.Plz help me.can i take an illegal action

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Bank send all communication to the address registered in Banks record. It seems while shifting to Hyderabad, you have not updated address. You may demand all communication sent to you along with address then only we can decide what can be done next.

  • yogesh

    Dear Sir,

    What is the Document required puchasing flat from Bank?Please suggest me.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      a. All original documents submitted by defaulter with bank
      b. Public Notice 13(2) & 13(4) under Sarfaesi Act
      c. Two newspaper notice copy. One English and another in vernacular language
      d. Possession notice
      e. Police Intimation

  • yogesh

    is any possibility after sale property by bank to third party then defaulter can take action against third party? What can i prevent?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Defaulter can move against bank’s action of property auction not you. As i mentioned in my post, you can insist to make defaulter as confirming party in your sale deed to avoid any legal hassle. You should ask for following documents
      a. All original documents submitted by defaulter with bank
      b. Public Notice 13(2) & 13(4) under Sarfaesi Act
      c. Two newspaper notice copy. One English and another in vernacular language
      d. Possession notice
      e. Police Intimation

  • Reddy Reddy

    sir,
    recovery agent has come to my place Hyderabad to collect the money thrice.
    is that not enough and they have my mail id also
    sir,the banker asked to call on Tuesday(5th july 2014) and sir i am afraid i am losing lot of money

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Don’t worry, just talk to banker and discuss your case. Banks sole objective is only to recover their dues. If you are ready to pay then the matter can be resolved amicably.

      • yogesh

        thank you sir

  • Bush boy

    Sir,
    Is it a must that before a bank gets your house auctioned they do a fresh valuation of the property.Is it also a must that they have to physically come to the house to do that valuation.For example if its an estate an your house is a renovated one and diffrent from the others is it right for a bank just to generally guess the market value?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Property valuation is done by certified valuer on behalf of bank. Normally house furnishing does not add any value in property valuation. Bank is within its right to value the property at fair market value.

      • anoop singh

        Good Afternoon Nitin sir,
        Im also going to buy bank recovery flats within a day or two. This property is on the name of co.and im getting it for rs 22lacks….(Actual market price is 38 lacks)but i have to pay 3.15lacks as a DD payment now and rest in easy emi..so pls suggest what are the things i have to kept in mind before making a payment..dealer is giving me assurity as per his word that this is a golden chance for me but im very nourvous..bcoz this is the first time im buying …and after lot of arrangements i collcted 3lack rs…pls help me n pls suggest.

        • http://www.nitinbhatia.in/ Nitin Bhatia

          Please check above post. I have covered all the imp points.

  • yogesh

    Dear Sir,

    What is the notice received by bank from court? what is this notice and then after bank attach the property? How time to get notice from court by bank?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Please let me know the notice name then only i will be able to comment.

  • yogesh

    i don’t know sir because i purchase a property from agent.So,he tell me.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You can check from bank directly

  • yogesh

    Dear Sir,

    Bank send a legal notice to defaulter and say loan paid otherwise vacate room.This legal notice is time period in how many days and thereafter Bank Attatch the property?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      It seems bank has sent possession notice. I would not suggest you to buy property at this stage. The bank should have physical possession of property before it is put on auction. Bank is auctioning the property with notional possession.

  • yogesh

    Thank you sir

  • Malini Sampangi

    Hi nitin,

    How we come to know about Bank Auction properties

    • http://www.nitinbhatia.in/ Nitin Bhatia

      I have mentioned 2 auction sites in my post which list all auction properties. You may check the same.

  • Munmun Mukherjee

    Nitin Sir I like to know the following question. Kindly help me as your valuable Blog growing my interest in Bank Auction property . A) is thre any discount in registration charge on the Auction property ? B) If Base price (or final bid price) less than defaulter’s O/S loan amount . will the defaulter agree to become a confirming party? at that time is it safe to participate in Auction?C) After buy a Auction property whenever one want to sell it than, Can seller get the Bank Loan? D) is there any agent Who totally help to participate in any auction Process? F) From where shall we know multiple loan invoved in Auction property?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      A: No
      B: As i mentioned in my post, defaulter should be confirming part else it is not safe to participate.
      C: If complete legal process is followed during auction then seller can avail Home Loan
      D: You should approach bank directly
      E: Difficult to find but just check in Sub-Registrar office whether there is any lien on property.

  • Sanjeev Allahabad

    Hi sir,

    Kindly tell me that I have paid all Bid Value to the bank within 15 days of auction but the property owner moves to DRT against the bank with a cause that the his property value is high and bank sold it at lower rate.
    The banker doen’t issue me the sale confirmation latter.

    Please suggest
    1. What I have to Do ?
    2. I have to pay some more money other than Bid value which I had already been paid to bank ?
    3. The Bank officials were talking that I have to Pay some more money to get possession .
    4. Is this any provision ?
    5. Is this responsibility of bank to give possession of the Property and in how many time period.
    6. Can I ask my money back due to late in possession over the property.
    7. What is the procedure to get the Possession over Property and who will borne the Expenses for this weather highest bidder or the Auction-er Bank ?

    • Gulam

      Mr. sanjeev pl find out whether the DRT has given any stay against the confirmation of sale . In most of the cases DRT does not entertain any petition of borrower as regarding the valuation of the property. Because most of the borrowers try to place hurdles by means of raising the issue of valuation and most of the time it is used as a tool to drag the court proceedings and DRT dismisses such petitions within no time. And one more thing is that bank cannot demand any additional amount for arranging possession.

      • http://www.nitinbhatia.in/ Nitin Bhatia

        I have different opinion on this. i am assuming that you were aware that property was auctioned based on Notional Possession with the bank. If yes then you need to bear the cost of physical possession as the property is sold on “As is where is & what is there is” basis.
        5. There is no time frame for physical possession.
        6. You can demand refund if you were not aware that bank has only notional possession
        7. Only bank can help in physical possession. Highest bidder has to bear the cost of physical possession.

        • Munmun Mukherjee

          Thank you sir for your valuable reply

  • Sanjeev Allahabad

    Thanks

    Please tell me about the Confirming Party.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Kindly go through my post. I have explained in detail.

  • SP SINGH

    Dear sir, G’Morning……I want to know, what is the meaning & proceesure of confirming party, is auction authority / bank is bound to call the borrower as a confirming party at the time of registry of said assets in Tehsil?????

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Bank is not bound to include borrower as confirming party but it is in the interest of bueyr to include borrower as confirming party to avoid any legal hassle/dispute in future.

  • SP SINGH

    Dear sir, I will be very thankful to you, if you can suggest me what is the proceesure to become a SARFAESI AGENT / LICENCE Holder in Delhi ???

    • http://www.nitinbhatia.in/ Nitin Bhatia

      My apologies but i don’t have any idea on this.

  • sridrr

    Sir,
    you mentioned that, interest on auction property will not get tax exemption. But bank guy is telling me that I will get tax exemption. I am planning to buy property just to get tax exemptions, Is there any thing I can do to get tax exemption on interest if I buy auctioned propert,

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Please let me know in which case i suggested this…The tax benefit vary from case to case. If you avail Home Loan against auctioned property, you will get tax exemption on interest component provided you fulfill all conditions.

  • Martin vaz

    Hello sir,
    Do Bank have Agent for selling Flats of defaulters? can the Banks sell the flats without Auction?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      No, Banks cannot have agents. Banks cannot sell through private auction but ARC’s can sell through Private Auction i.e. without public auction.

  • Rajesh

    HI Nitin,

    Inspired by your post, I am seriously looking for house or flat or land via auction. But How to choose the bit amount to win in an auction? How many bidders would be there in an auction generally? Please provide any insights or resources these.

    Regards,
    Rajesh.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Bid amount is dynamic depending on market rate and no of bidders. Usually 20-25 bidders participate in each auction.

  • ratan thawani

    Hi, Nitin-ji, I also liked your suggestion, but is it really so feasible.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      It is feasible but i agree that not in all cases

  • Newbie

    Hi Nitin sir, I need your kind advise in buying a auctioned property. The property is under construction with roof and pillars without walls and flooring. Close to 15L of work done in 2000 sft land. Land is DTCP approved. The owner and his cousin bought around 1C of business loan mortgaging both of their properties for their joint business. The other guy seems to be deceased and his home is occupied by his family and bank is not able touch it immediately due to legal issues. But this property came under auction and bank has MOD in EC. They have notional possession and they followed all the formalities for the auction with news paper ad and everything. So we bought the property in the auction for 20L lesser than market rate. As per your advise we tried to reach the borrower to come as a confirming party and ready to give few lakhs to him also. But he is shouting at anyone who is willing to buy his land. He put a stay from high court on the auction day and the court said if he remits 20L money within 30 days to the bank then they will consider and if not the bank is feel free to go ahead with the sale and it also did not stay the auction. It’s only couple of days left now and the borrower does not look like paying and he is also not willing to come for a settlement. We still have not revealed ourselves to him but he lives in the same street in which the property is there too. Do you think he can do anything after the sale completion? If we register the property? Is there any risk? Even in the court he just requested time to pay the money. Are we safe to proceed with the sale or is there risk that he can planning something on the background?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Wait till deadline given by high court is over and let court issue order to auction the property. In my opinion, getting a physical possession of the property will be major hurdle. After auction is over, it will be your headache to get physical possession which may be again long legal battle.

      In my opinion, if you don’t get physical possession of the property at the time of auction then you should back out from auction process.

      • Newbie

        Thanks ji for your quick response. The banks says that they dint get a physical possession as it was a under construction site. They told tht they will get it after the registration. Do you think the buyer will be able to file any case after the registration? Also how can I back out after I paid 20% to bank?

        • http://www.nitinbhatia.in/ Nitin Bhatia

          Auction properties are sold on “As is Where is and What is There is” basis therefore don’t expect bank to help with phsyical possession after auction as bank is only interested in recovering their dues.

          It cannot be predicted what legal course can be taken by defaulter as i have not checked documents therefore cannot comment.

          You may discuss with bank if you wish to withdraw your bid.

          • Newbie

            Hi Sir,
            Since the property cannot be possessed even by the borrower as it is semi constructed land, I went ahead and purchased the item. Paid the money to the bank and waiting for the HO approval (internal to bank) to proceed for registration. It’s been 4 days. Expecting it tomorrow. But the borrower has moved in to DRT today as the HC rejected all his petitions earlier. DRT has adjourned the petition to 20th no stays. Can I proceed with my registration in a day or two? Will it complicate the situation? Or safe to do? Will I get my reg fees back if something goes wrong in the case? Thanks!

            • http://www.nitinbhatia.in/ Nitin Bhatia

              As i have not seen documents therefore cannot comment on possible outcome of DRT. Prima facie since High court has rejected all the petitions of borrower therefore in all probability DRT will also pass judgement on similar lines. In the absence of physical possession, the best bet for you is to register the property as you must have paid complete amount by now to bank. A word of caution, as i mentioned that properties are auctioned on “As is Where is and What is There is” basis therefore do not expect bank to help in physical possession of property.

              Any stamp duty or registeration fees is non-refundable untill unless there is specific order from court to cancel the deal and refund the registeration charges.

  • Jatinder Pahuja

    a) Let me know meaning of proclamation of sale under rules 38, 52(2) of second schedule of income tax 1961 read with recovery of debts due to bank and financial institution Act, 1993.
    It means auction is due to loan NPA or income tax dues or both.
    b) If we buy property under this auction is it safe. Auctioneer is DRT.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      I will put it in layman terms as the auction under these clauses is very complicated. Person A avail loan for business or any other commercial purpose. In order to secure this loan, person A mortgage personal property by way of deposit of title deposits. Now this person incurred losses in buisness and not able to pay loan. In order to recover their dues, bank will attach personal property and put it on auction. In short, personal property is mortgaged to secure business or commercial loan.

      If all documents are in place and complete process is followed then you may go ahead.

  • V M Dahake

    Dear Sir,
    One of my friends is buying property from DRT auction purchaser and has already part financed the auction purchaser on the basis of sale certificate issued by DRT, Mumbai. What is the procedure for registration of property in the name of auction purchaser and subsequently in the name of my friend. Can a combined agreement be executed. If not how does the purchaser from auction property protects his interests. Value of property has somewhat gone up since purchase.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You can register sale certificate in sub-registrar office. Designated Bank officer (bank which auction the property) will sign the same and if possible the defaulter can be included as confirming party.

  • Krishna Kumawat

    Dear
    Sir,
    I am regular reader of your advices. I appreciate your work for legal
    awareness among people.
    i brought a raw skeleton house in jaipur last year from Dena
    Bank. Bank gave me all original documents( Sale Deed / Patta of JDA of first
    buyer, Chain of registry of three middle buyers , possession letter of first
    alloty) Bank Manager gave me sale certificate and certificate was registered by
    us in sub registrar office also. I paid all amount in cash coz i didn’t got
    home loan. This is a Skelton house in raw condition. No one can lives there
    in this condition. We have to demolish
    it if future. Once I visited to JDA office also to check that, is someone
    issued it’s duplicate Patta. But till date no duplicate Patta is issued. I don’t
    know anything about the earlier owner of the property. Right now also the
    property in same condition “as it is” last year. One of my friend told me
    that I should get a copy of allotment letter from JDA and property should be
    transfer in my name in jda also, to avoid future problem.
    What
    does it mean of physical possession? The property is there, no one live there.
    Is i got all the document or something is missing? Should I demolished the
    skeleton house? But I was thinking that I should not demolished the house
    because if I will sale it in future to someone then he/she can get house loan
    on it. Please suggest.
    I lives
    in Kota, if you found any suitable work for me, then you are most welcome.

    Thanks and
    regards
    Krishna
    Kumawat

    Kkk992840@yahoo.com

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Jaipur Development Authority of JDA issue allottment letter only to allottee who is allocated property under any housing scheme launched by JDA therefore it is not applicable in your case.

      You need to get your name updated in the property tax records maintained by JDA. You may demolish the house and re-construct but you need to get the plan approved from local town planning authority or JDA before starting any construction. You may hire local architect who will help you in this process.

  • harshali

    Dear Sir,

    Is District Collector has right to take possession in staying house?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Under section of 14 SARFAESI Act, Bank or their agents can approach Chief Metropolitan Magistrate (CMM) to seek physical possession of the property in Metropolitan area and District Magistrate or District Collector in Non-Metropolitan area.

      • harshali

        Sir, I need your advices. I have purchase 3bhk Flat (1st Floor, 101,102,& 103)in Nandanvan area, Nagpur in 2006, on loan from Bank of Maharashtra, that time I didnt sanctioned loan, as per builder advice flat no.101 & 103 loan sanction on builder name & Flat No.102 loan sanction with my name ant Flat No.102 Loan already cleared on June 2011. I have possession all 3Bhk Flat from Feb.2006 to till date i stay there with my parents. BOM sanctioned loan without verification of flat. The flat has One Door, & its only Flat No.102, its mine. when i purchase this flat I had oral agreement with builder that he was taken loan on his name & EMI of Loan (Both Flat 101 & 103) payment doing by me & I will doing it. After a Year I knew about builder that he was defaulter & Fraud person, that time i went there house & request him to transfer Flat no.101 & 103 in my name, he denied, he said i’m not absconder, I trust u…whatever… I didn’t know builder had taken Open plot Loan on this Place, from another bank (Nirmal Ujjawal Bank). In 17th June 2009 Nirmal Bank came and they sealed my whole property, because open plot loan has taken by builder, & he doesn’t paid this loan till date… When i Knew about it I cleared my Flat Loan flat No.102 which i taken from BOM, & Stop Payment from Flat No.101 & 103, & informed the BOM that the Borrower has defaulter & he fraud with me & Bank also. In 2010 BOM Recovery Team came in my house & take Physical Possession of Flat No.101 & 103, That time I told the Bank that I have paid both flat Money, & You will make registry with my name, but bank doesn’t agree, then i again said to bank that possession of flat in my under.. & it has only one door, which is only my flat.. so u cant enter in my flat because I m Not your Borrower & Guarantor also. & I complaint against BOM & Other Ombusdmon & RBI also.. Now Bank take Permission from district Collector to take possession of Flat no.101 & 103..I dont no collector has given it or not… Kindly advice me what could i do now? I had send the notice to builder but he didn’t replay. Could i file the suit against Bom/builder for refund my money. please suggest me.

        • http://www.nitinbhatia.in/ Nitin Bhatia

          As i have not seen original documents but based on your explanation, i understand that Flat No 101 and Flat No 103 are in builders name and you were co-applicant in Home Loan for these flats & you were paying EMI for these flats. Now prima facie it seems that builder played it very smart and he included you as a guarantor or co-applicant in home loan for flat no 101 and flat no 103 without transferring property in your name. As builder had plot loan from another bank therefore he availed loan for flat 101 and 103 in your name. To be very honest, your case is very week as the disputed property is not in your name and moreover builder is defaulter.

          Please let me know whether you signed any agreement with builder for flat 101 and 103 or you have any payment receipts for purchase of these 2 flats. Secondly to safeguard your interest, you should segregate all 3 flats because i don’t foresee any issue for flat no 102 which is in your name.

          • harshali

            Thanku sir, I have trying to signed the agreement with builder but denied and avoided. I have no payment receipt bcoz flat purchased on loan amount.Bank sanctioned loan without verification of flat. I have only Payment slips, which (EMI) i paid to builders (Borrowers) a/c. in 17/3/2013 bank had came their team to sealed this property, they pressured me (Builder & BOM team) paid some amount to borrower A/c & that time i had issued two cheque Rs.50000/-each. Bank doesn’t deposit the cheque to their borrowers loan a/c bank manager went to my bank & withdraw Rs.100000/- from my A/c. I requested him to give me the deposit slip of Loan a/c statement but he denied, & i Complained against him to District collector, RBI Bank & Ombudsmen also.
            It has cleared that Flat no.101 & 103 has no door. Bank sanction loan without investigation.

            Now, BOM trying to take permission from collector to take physical possession of this property, they file application & Final hearing will come soon. If BOM Team will come with collector order/notice & Police force to take physical possession of that property, What could i DO? Should i Complaint against him or against Builder? Where should i Complaint? Which process i will follow that time? They want to enter through my Flat no.102(which have single door) and doing some partition and separated flat No.101 & 103, then they broke the walls & Fit the doors and take possession, is it legal procedure.
            kindly suggest me?

            • http://www.nitinbhatia.in/ Nitin Bhatia

              As i mentioned segregation of all 3 units is must therefore any steps taken by law enforcing authorities to separate the units is legal and valid. You cannot stop bank from taking physical possession. At max you can appeal to DRT or file application with DC office / court to make you a party in this whole dispute.

              This is case of fraud and cheating by builder. You should hire a competent local property lawyer & file a FIR / Case against builder. Except for payment of Home Loan EMI, we don’t have any other proof to stake claim on the Flat No 101 and 103. Another complexity is 2nd loan taken by builder and he has not informed you regarding the same.

              You should pull out your Home Loan agreement which you signed along with builder to check your rights and liabilities. If you are guarantor then bank will also declare you as a defaulter though you are not the owner of the property.

              I am sorry to say but to be honest with you, your case is very weak under current conditions.

              • harshali

                Thanku for your replay.

  • Rajesh Pai

    Sir,

    I have home loan with MNC bank. Now it is under auction. If they sell my property cheaply and can they recover/claim in court of law for the balance due of housing loan from me. please suggest me.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      If the amount recovered through auction is less than total amount due then bank will recover balance amount by attaching your other properties and bank accounts. For that bank need court order which will not be an issue as in such cases court issue order to attach properties / bank accounts to recover amount due to bank.

    • mdcapital

      Hi Rajesh

      We deal with Sarfaesi/DRT cases. Please drop me a mail on mdcapital21@gmail.com and I can help you out.

      Regards
      Nithin

  • sandeep

    Hiiii sir .is that possible to get auction flat less than reserve price…

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Bank will not auction property below reserve price.

  • madhav manchiraju

    sir when d.r.t.passed recover certificate to banker of my propriety is there option for banker to sell factory or house propriety because either propriety costs more than barrowed value

    • http://www.nitinbhatia.in/ Nitin Bhatia

      First bank will auction mortgaged property. If bank is not able to recover amount from mortgaged property auction then it will sell other property.

  • sandeep shinde

    i want buy flat

  • Madhu

    hello nitin, i am following your post thanks for your advice to me & others & my query is
    What would be my liability if some other bank has secondary mortgage over the property and claims its dues after I have purchased the property in bank auction?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      There are multiple scenarios of secondary mortgage, pls specify. In most common scenario, a borrower cannot avail secondary mortgage from different bank i.e. secondary mortgage should be from same bank. In another common scenario, a borrower secondary mortgage property through fraudulent means.

      • madhu

        thank Nitin for quick response . Last week i was looking at the bank auction property(Kotak) which i found suitable & interested to bid & just looking about
        borrower name on net & found her name on one of the site where in same
        property was auctioned in 2011 by SBM . i queried SBM but did not get proper response & thought there is fraud from borrower & felt later SBM should not come & ask me for the amount if i am the highest bidder .
        whether there is any legal problem involved in this case?

        • http://www.nitinbhatia.in/ Nitin Bhatia

          You may clarify from Kotak regarding same. There is possibility that under Asset Reconstruction plan SBM sold property to Kotak or SBM sold property to person A through auction & person A availed loan from Kotak. Now person A is also defaulter therefore Kotak is auctioning the property to recover the amount due. Once the chain of ownership is established then we can conclude whether you may face any legal issues in future or not.

  • Balaraju

    Dear Sir,
    Recently I have taken one property through Bank auction, still it is not registered what all the things need to be checked before registering the property and for the physical possession, Please advice me.
    Regards
    Balaraju
    Hyerabad

    • http://www.nitinbhatia.in/ Nitin Bhatia

      I have mentioned all the details in my post. Please go through the same.

      • balaraju

        Dear Nitin Sir,
        Thanks for your valuable feedback and in my case there is some excess amount with banker as sale value is more than the bid value, we have not made defaulter as confirm party, all the formalities are completed with sub registrar for the registration of the property.
        Still is there any chance of defaulter to file case in DRT or in civil court?

        Please advice me sir
        Regards
        Balaraju

        • http://www.nitinbhatia.in/ Nitin Bhatia

          Any legal action from defaulter cannot be ruled out.

          • Balaraju

            Dear Sir,
            Thanks for your advice and guidelines.
            Regards
            Balaraju

            • balaraju

              Dear Nitin Sir,
              We have done the sale registration and banker issued a sale certificate and we are yet to take possession in the house, is still banks or DRT has right to cancel the sale.

              if it is there please advice.
              Regards
              Balaraju

              • http://www.nitinbhatia.in/ Nitin Bhatia

                Only court has authority to cancel auction.

                • balaraju

                  Dear Nitin Sir,
                  Thanks for your valuable feedback and guidance, is there any way to send you the documents of this sale transaction for your reference and advice, if at all any documents missing.
                  Regards
                  Balaraju
                  9866993746

                  • http://www.nitinbhatia.in/ Nitin Bhatia

                    You can share documents with me through Google Drive. If you wish to avail personalized consultation on chargeable basis then you can call me at +91 94 800 21000. I will share the payment details.

  • pramod

    Dear Sir I have purchased one flat from Partnership firm & agreement for sale is registered in Sub register office by one of the partner. Bank has taken NOC from other 2 partners on their firm later head ( NOC is not Notarized) & disbursed the loan amount. Pl note that this firm is not registered under partnership act.

    Since this firm is still unregistered & hence partners can not create any issue in court. But if this firm gets registered later on , then can partners creates some issues in future for this back dated transaction ?

    Pl let me know what additional safety has to be taken to avoid any future complication from partners

    Pl do the needful.

    Thanks

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Any transaction cannot be disputed retrospectively. I have not checked documents but It is advisable to get NOC notarized or better to take affidavit from all 3 partners. Also check whether property was bought in individual capacity by all 3 partners or in the name of partnership firm. The partner who signed sale deed, is he authorized signatory on behalf of partnership firm for property transaction.

      • pramod

        Dear Sir

        Thanks for your reply. The partner who has signed this agreement for sale is a working partner & holding 85% of share in this partnership firm. This partner is getting Remuneration also from the partnership firm for his services. The other 2 partners are holding 10% & 5 % shares.
        I have checked previous transaction of this property & it was bought in the name of Partnership firm. In that transaction also the same partner has completed all legal procedure.
        Now I have requested them to complete this deal with 2 ways.
        1. Sale deed with all the 3 partners
        Or
        Sale deed with the partner who has completed agreement for sale & other 2 partners Notarized NOC.
        I don’t know how they will co-operate me for these 2 options.
        My main worry is that if this Partnership firm gets registered at later stage & at that time these partners should not create any trouble for me.
        Is there any provision that legally I can take some action against the partner who has signed these agreement for sale if he fails to give Notarized NOC from other 2 partners ?
        Pl help me in this.
        Once again thanks

        • http://www.nitinbhatia.in/ Nitin Bhatia

          As this is complex case and i mentioned that since i have not seen documents therefore i can only comment based on your inputs.

          As i suggested, In this case you only need to confirm whether the partner who signed sale deed is authorized signatory to carry out property transaction on behalf of other 2 partners or not. If he is authorized by other 2 partners then you need not to worry at all else you need to take further steps to safeguard your interest. You may ask for documentation in this regard from the partner who signed sale deed.

  • Pankaj Solanki

    Sir,
    We Have A Property On Which We Have Made A Warehouse & Rented To A reputed Company.We Want To Give This Property As Co Lateral & Get A Loan Against Property.In This Deed Boundary No Road Is Mentioned,Surrounded By Various Plots But Physically There is Road.As We Are Trying But Failed Or Rejected From Various Bank Due To No Road.As His Market Value Is Very High But Still We Fails.Please Guide Me Regarding This.We Will Be Very Thankful To You.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      As i have not seen documents but based on info shared, prima facie it seems that there is a deviation from approved plan because of which Loan Against Property is rejected. The best solution is to get the deviation regularized / approved from local development body by paying penalty.

      Also it seems that road is part of your land parcel so 2nd solution is to merge the road with your warehouse as per approved plan of local development authority. In this case, you should take help of a qualified architect.

  • madhu

    Dear Nitin,
    Thanks for your valuable inputs you are providing to me & other who are not aware of basic facts of banking auction…
    my query is if i am highest bidder in bank auction property & if bank has followed all norms of SARFAACT proceedings, is there any chance of defaulter can file a case against highest bidder in civil court?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Any legal action from defaulter cannot be ruled out even if SARFAESI Act is followed with heart and soul by bank.

      • madhu

        thanks Nitin.
        As you suggested in one of your blog , if bank specify defaulter as ‘Confirming Party’ in sale certificate(if all formalities is done i.e it is registered in sub registrar office)
        a. Still legal suit can be filed by defaulter ? or will the court straight away reject the case?
        b. is this case comes under DRT or is it comes under civil court?
        please let me know

        • http://www.nitinbhatia.in/ Nitin Bhatia

          a. If defaulter is confirming party then possibility of legal suit is negligible until unless any legal heir of defaulter decide to file a suit or in most of the cases property is mortgaged twice by defaulter to commit intentional fraud.
          b. It depend on case and points on which case is to be filled.

          • madhu

            thank you very much Nitin for your valuable inputs & help.

  • manan

    hi,
    Nitin Ji,
    I have one query that what if there is no buyer say for 100 rupees reserve price, so in that case auction fails. so next time when new auction is initiated is the reserve price changed ???
    if yes than after how many failed auctions, 1 or 3 ?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      It is bit subjective but normally banks go for 3rd party valuation of property and revise min reserve price based on recommendation of a valuer. If public auction fails then bank may sell property through private auction or to ARC’s (Asset Reconstruction Company).

  • madhu

    Dear Nitin,
    will you please provide your valuable inputs on Sale certificate issued by bank auction property
    a. how the sale certificate looks like … is it generic format followed by all banks(any guidelines)
    if so, how we can suggest bank to include confirming party in sale certificate
    b. sale certificate need to be registered in sub registrar office ? or is it not required
    c. if we i want to register sale certificate in sub registrar office in Bengaluru ‘
    how this needs to be get it done?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      a. Sale Certificate is classified document therefore you may not find it in public domain. Ref to Sale certificate shared by my clients for consultation, i can share that it is more or less standard format across banks. Defaulter may refuse to be confirming party but you need to check highest bid amount, amount to be recovered by bank and balance amount bank will pay to defaulter. In your case, if there is balance amount to be paid to defaulter by bank then bank may force him to be confirming party. In many case balance amount is nil or negative therefore defaulter does not have any incentive to be confirming party as he/she has nothing to loose.

      b. Sale Certificate should be registered in Sub-Registrar office

      c. Sale Certificate will be registered as per standard process. The bank’s authorized signatory will sign on bank’s behalf. You also need to check whether bank has put a lien on this property or not in sub-registrar office.

  • prashatnt patil

    dear sir ,
    i am also interested to buy auction property but how to find where is this property is available am reading dna many time i am searching such type of bank adv but i am not able to found so please sugges me

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Please check following sites
      foreclosureindia.com
      indiabankauction.com

  • kumar

    Hi nithin my friend has bought a property in bank auction in chennai. When he went to change the name in property tax records he was told that sale certificate alone is not sufficient to effectuate transfer. What other document is required for changing the name in property records. ? Regards.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You need to register sale certificate in sub-registrar office. Without registration, the property rights cannot be transferred. After registration, property records can be updated.

      • kumar

        Nithin sir the problem is the property owner who is defaulter refuses to co operate with the bank in joining as confirming party in sale certificate and bank is asking me register the sale certificate without including him. My question is if I register it without joining him will the property tax records be changed in my name ?If it is allowed in property tax dept will the other depts like Electricity and water will follow the suit?

        • http://www.nitinbhatia.in/ Nitin Bhatia

          Answer is YES. If you register the sale certificate in sub-register office signed by authorized bank representative it will be considered as legally valid property transfer even if the defaulter is not a confirming party in the sale certificate. Inclusion of defaulter as confirming party is only to safeguard legal interests.

          Based on registered sale certificate, you can get your name updated in property tax, electricity and water departments.

          • kumar

            Thank you very much sir.

  • Santosh Shetty

    If anybody in and around mumbai (specifically western suburbs) is interested in Bank auction related properties, please feel free to contact me on 9820638422

  • Surendra Jayaswal

    Hi Nitin,
    I bought a plot of land through state bank of India in a tender process 4 years ago. Bank officer says that sale certificate is good enough and there is no need of registration of land at all.
    Is it legal that SBI issued sale certicate will be good enough to acquire property and build house on it without approval of sub registration authority?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      As i mentioned in my post, You need to register sale certificate in Sub-registrar office. Authorized bank representative will sign the sale certificate at the time of registration.