Can Banks Auction Your Property During OTS Negotiations? Know Your Legal Rights in India
What If I Receive A Bank Auction Letter During One Time Settlement Process?
What if you are currently going through One Time Settlement for your loan. You have communicated to your branch manager that you will be making an offer. And let him know that you are in a bad situation and have made provisions for One Time Settlement. Now bank auctions your house what will you do?
Can Bank Auction House When One Time Settlement Is Pending?
Yes if your case comes under SARFAESI 2002 Act and the bank can take further actions. They can proceed with their process of auction.
It is good to know this before the incident occurs.
A person in Noida borrowed money from bank on his house and invested in his business which he runs with family. He was unable to return the money on time as the business didn't give expected return. So he became defaulter. Bank issued notice to him. He sought for One Time Settlement.
After exchanging messages with bank for couple of weeks he assumed that it would be resolved. Bank had told him certain figures which he assumed to be final. Then he received a letter of auction from bank.
There are 2 questions that you need to ask in this scenario. Will bank approve One Time Settlement from you? Can bank auction your house if you apply for One Time Settlement?
Maybe you have answered the first question for yourself but not the second one.
You can reach out to Advocate BK Singh if you are looking for help to settle your loan. Through our Loan Settlement Agency we have helped many borrowers.
Why Is This Information Relevant To You In India And Delhi?
Property can be important to you. Many individuals have residential property in Delhi NCR region. Whether it is your only house in Delhi, Ghaziabad, Noida, Gurgaon, Faridabad or Greater Noida. Same goes for commercial properties that you may have. Shops, factory space could also have loans on them if you are staying in cities like Mumbai, Pune, Bangalore, Ahmedabad and others.
Once the bank wants to take steps to recover from you. They can start taking actions. You may need some funds to make payment towards your One Time Settlement. May require to liquidate some assets to obtain money. This takes time.
People assume that once they receive a default notice from bank their house will not be auctioned right away. As they have been dealing with their loan recovery team.
You can consult Advocate BK Singh if you need legal help to resolve your One Time Settlement issues.
OTS does not mean that your property cannot be auctioned off by bank. Its an agreement between you and the bank.
Some things to keep in mind:
- Applying for One Time Settlement does not suspend your SARFAESI case.
- Always read any approval you receive. Some times banks may add some clauses in the approval you receive.
- If bank issues section 13(2) notice to you they are required to give you a notice period of 60 days before proceeding. Only after that period has ended bank can take further measures under section 13(4).
- If you send any complaint to bank. They can reply back to you under section 13(3A).
- Tendering the amount specified under section 13(8) of the Act. If you have paid the amount your case stands resolved and no more charges will be levied on you.
- Under section 17 you will have 45 days to file your grievance at DRT.
- Just because you have applied for One Time Settlement or have filed your case at DRT doesn't mean your case will be stopped from auctioning.
Can Bank Auction My House If I Apply For One Time Settlement?
If you have applied for OTS under SARFAESI Act. Yes they can. They can take further action under the SARFAESI Act. It will depend on conditions that will help decide whether they will proceed or not with the auction.
When You Are Sent A Section 13(2) Notice
As stated above if you fail to pay the due amount. Bank can issue you a notice which is called section 13(2) notice of SARFAESI act. You can represent your cause as well if you wish to do so.
So can they proceed if I have sent a request for One Time Settlement? Bank is not obliged to halt any of its procedure when you have asked for One Time Settlement.
Once You Get A Section 13(4) Notice From Bank
After they send you the time to pay the amount. They can take further action if you fail to pay on time. Under section 13(4) of the Act bank can proceed to recover money from you. You can take legal help against this. If you feel bank has done something wrong. You can file a complaint at DRT.
Bank Auctioning My House I Can Go To DRT Court
If the bank proceeds with auctioning your house. There are few procedures they have to follow. You can go to Debt Recovery Tribunal if they have not done so. You will have 45 days to file your complaint at DRT. Consult Advocate BK Singh if you need any help.
Who Can Seek Help From Us If They Get An Auction Notice From A Bank?
The home owner is not the only one who can seek help. If you have taken a bank loan you can approach us. Even if the bank loan was against land or any kind of property you can approach us. Here are some cases that you can relate to-
- Your property may have been mortgaged to the bank when your son took out a loan. If he fails to pay the bank then the bank can recover your property.
- If you have a small industry at Ghaziabad. You may have availed a loan from the bank on your industrial property.
- If you live in Jaipur and some individual has borrowed money from a bank using your name.
Your property can be sold off if you fail to pay back to the bank. In every situation where your property is involved in recovering loan money. We advise you to take legal help.
How Can I Save My House When Bank Auctions My Property?
Get the date of auction. Know your legal standing with the bank. Make sure they provide you this in written form. Take help of an advocate if you feel you need one.
Know Your Legal Standing
Just because bank has sent you an OTS letter. It doesn't mean your loan will be cleared off. They can send you a SARFAESI legal notice at any point of time. Please read this blog to understand what can you do when your loan goes bad. SARFAESI Notice What To Do?
Confirm From Bank That They Will Not Auction
The bank may have approved your OTS but their auction department may still proceed with selling your property. Confirm from them that they will not proceed further. If they tell you they will hold their action then get them to write that down on paper. When bank gives you One Time Settlement approval see if they have mentioned about your auction and your payment that you need to make.
Consult Advocate If Bank Proceeds With Section 13(4)
You need to seek advice from advocate if your bank has gone ahead with their action under section 13(4). You may want to find out if there are any objection that you can raise before DRT court. Or seek an injunction from DRT.
Filing your case at DRT does not guarantee your case to be stopped from auctioning. Consult an advocate to find out if you have any chance to save your house.
Be Practical When Bank Doesn't Approve OTS
If they are not willing to accept your proposal. Don't push them to accept it. Bank can ask you to pay them on a particular date and amount. Make sure you can fulfill these requirements else you will be in trouble. Read Bank Notice Reply on our blog.
Get Your Mortgage Released
Make sure you receive confirmation from bank after making One Time Settlement payments. Your house will still have mortgage on it unless bank releases it.
Documents You Should Have Handy At All Times
Its best to maintain a record if you want to dispute anything that bank has done. You can have these documents-
- Sanction letter/mortgage document
- Latest account statement
- Copy of 13(2) notice and any representation you have sent to bank
- Section 13(4) notice and copies of newspapers
- Notice informing you of your house auction and when it will be sold
- All correspondence with bank regarding OTS
- Approval from bank and any stay notice from bank
- Bank receipts that you have paid them
- Salary Certificate/Business Proof showing your inability to pay
- Orders issued by DRT if you have filed your case.
Once you have been provided One Time Settlement from your bank try and locate it. As some banks do state some clauses that you need to know about. Speak to Advocate BK Singh and he can help you out.
How Many Days Will I Have Before Bank Auctions My Property?
If you are under SARFAESI Act. And have sent your request for One Time Settlement to bank they can't wait indefinitely. Under section 13(2) they can send you a legal notice that will give you 60 days. From there you can have 45 days to file at DRT court.
Rule states that if auction is to take place bank will send you a notice 30 days before your auction. It may differ according to your circumstances. Please don't base your time line on the date you found out that you have received an OTS letter. Your SARFAESI case will dictate your time line.
When Should You Speak To An Advocate About Your House Being Auctioned?
The moment you know your property is being auctioned by bank. Contact us to know if you have any legal clause that can save your property. Maybe they may have made mistakes when sending you a legal notice. You can always speak to Advocate BK Singh to know more about your case. Whether its SARFAESI related or a legal notice.
Frequently Asked Questions
1. Can the Bank Auction My Property while I'm doing an OTS?
The Bank can auction your home if you are in the process of doing an One Time Settlement (OTS). When you do an OTS it does not stop the Bank from using the SARFAESI Act 2002 to collect what they are owed.
2. Can I Stop my Bank Auction if I do an OTS?
No your bank auction will not be stopped if you file an OTS with your bank. Make sure you contact your bank and find out if your auction will be stopped.
3. Can you Stop Bank Auction After SARFAESI Notice?
Yes you can stop your bank auction if your bank did not follow proper protocol. There are many steps that your bank must take before they can sell your home at auction. You can file a DRT to help resolve this issue.
4. Can my Bank Auction me if they deny my OTS?
Every Bank has there own guidelines on whether or not they will allow you to do an OTS with them. Once they deny your offer of OTS they can start the collection process.
5. What if my Bank Auctioned my home?
Banks must follow procedure when selling your secured asset. If your bank did not follow the procedure you may be able to go to your local court and cancel the auction.
6. Can I File for an OTS if i got an Auction Notice?
Yes you can file for an OTS after receiving your auction notice. Every bank is different so you will have to contact them and find out how to proceed with an OTS. Filing for an OTS will not stop your bank auction.
7. Can I Get A Stay on my Auction with DRT?
DRT will grant you stay if you feel that your case has valid reasoning. When filing a DRT will not stop your auction from taking place.
8. How long do I have to stop my SARFAESI Auction?
You have 45 days from your Section 13(4) notice under section 17 of the SARFAESI act. Find out what time frame you are under.
9. Can the bank auction my home if i pay some of the OTS?
Yes they can auction your home if you do not make payments towards your settlement amount. As long as your bank has accepted the amount you are paying each month.
10. How can a Lawyer help stop my Bank Auction?
Our Law Firm can review your situation and let you know what you can do. Call our Advocate BK Singh if you have any more questions on doing an OTS with your bank.
Final Thought's
Always know that your Bank can take further action on your account while doing an OTS.
Have proof that you are doing an OTS and keep all documents. Read all notices that your bank may send you. They could help you in court.
Don't wait until its to late. Call our Loan Settlement Agency to find out more about doing an OTS with your bank.
