How Can a SARFAESI Lawyer in Jaipur Help Stop a Home Auction?
Notice of home auction is every family members worst fear.
You thought your home loan default was because of some loan amount issues.EMIs were not paid on time. Bank used to call you, request you to restructure loans,crying to settle up with you. Then comes a stage bank sends notice of auction of your home. Thoughts cross your mind. Now i will loose my home. Where will i shift my family? unknown people will come to see my home which means the world to me.
That’s why a SARFAESI auction stay lawyer in Jaipur will first analyze if bank/secured creditor has followed the procedure of recovery lawfully and if borrower has any legal recourse to fight against bank at respective Debt Recovery Tribunal.
Loan settlement attorneys represent borrowers who have problems with home property,home possession notices, auction notices, DRT proceedings and loan settlement related matters.
You can stay Notice of home auction
Notice of home auction is not always easy to stay.
Just because you have a home that you live in and you have family relying on you does not automatically become a reason to allow a stay of auction. If the house was properly created as security interest for the loan and the bank had fulfilled all requirements for enforcement then yes SARFAESI act allows the creditor to enforce his security. Section 31 gives exemptions to security interest created on agricultural land, but that does not imply that SARFAESI will not apply to the properties you live.””t
Meaning you should have all your documents ready before its too late.
BK Singh Advocate will analyze your loan agreement, mortgage deed, notice served under Section 13(2), borrower’s reply to objection (if any), notice of possession, valuation report, proposed reserve price, auction notice, account statements and bank correspondence before advising you the legal course to be taken.
The sooner you apply for stay of auction, the less time you give your creditor to move forward with auction. Especially if auction is scheduled on or near date.
Why Is a Residential Property Auction in Jaipur So Urgent?
RESUME – Auction Under Sarfaesi is NOT Another Recovery Notice : DO’ s
Don’’t treat a SARFAESI auction notice like yet another recovery notice !
A SARFAESI auction notice is a statutory tool that can sell your enforceable security interest if certain prerequisites are met.
The flat/house/plot that the bank is targeting to recover from you ( suppose you are a borrower from Jaipur) could be – your flat in Vaishali Nagar; your house at Mansarovar;your residential plot near Jagatpura; your colony house at Malviya Nagar or some other residential premises which you may have mortgaged with the bank in Rajasthan.
An Auction notice is certainly going to give rise to many questions in borrower’’s mind. But the usual questions that arisin borrowers mind on receiving the notice are:-
Can the bank sell the property ?
Was the property valued properly ?
Did bank serve all the notices?
Did bank heard my objections ?
Was the Reserve price fixed on valuation ?
Did bank follow the timeline ?
Can I settle with bank now ?
Loan Settlement Lawyer knows that you cant rely upon the information provided to you in auction notice to get answers to your questions.
Loan Settlement Lawyer will still take action on Emi default notices but we treat auction stage on a different footing. Exactly because the game has now changed from pressure to recover loan to your house being sold out in auction.
Posted on Friday, May 6th, 2016. Filed under Auction Under Sarfaesi Tagged Action, auction, bancoftibalowji.com, Bankruptcy, bank'', collapse,Do''s,Dont''s, exit, Faug Child.
As per latest(Website)(CIVIL)20 dated orders on the Debt Recovery Tribunal Jaipur website :-
DRT Jaipur is OPEN
And is allowing Securitisation Applications to be filed
AND
Cases relating to applications for interim relief to be filed.
Grant of application for interim relief is decided on facts and circumstances of case and depends on discretion of Tribunal.
Since a suit has been filed against bank does not mean that auction will get automatically stayed.
Quick Facts About SARFAESI Auction Stay
13(2) This section empowers to issue a demand notice asking the borrower to repay the secured liability within 60 days from the date of notice before enforcement measures under sub-section (4) can be initiated, provided the statutory conditions mentioned therein are complied with.
13(3A) This sub-section specifically mandates that borrower be given an opportunity to make a representation/objection against the demand upon which the secured creditor must proceed in a manner prescribed in the Act.
13(4) This section enlists all the enforcement measures upon which the secured creditors can resort after complying with the statutory conditions.
An application can be filed under Section 17 before Debt Recovery Tribunal against the action taken under Section 13(4) mostly within 45 days from the date of action complained of by the person aggrieved.
Rule 8 & 9 makes provisions for valuation, reserve-price and notice in case of first sale of immovable property including a provision allowing 30 days within which sale-notice must be served.
13(8) This section talks about statutory redemption i. eligibility to pay secured creditor’s dues along with costs, charges and expenses before the date of publication of sale notice under certain circumstances as mentioned in the very section.
Seeking stay against action initiated by secured creditors is not a right with Debt Recovery Tribunal. The borrower has to prove that he has a legally tenable case with respect to the recovery measures objected to as well as law exercised by the secured creditor.
Why Do Valuation and Reserve Price Matter Before an Auction?
Real estate properties are emotional assets for an individual but matters under SARFAESI are decided only on papers. Read what LAW says..
Rule 8 of Security Interest (Enforcement) Rules
Before the sale, the authorised officer shall, obtain the valuation of such immovable property from the approved valuer and after consultation with the secured creditor, fix the reserve price.
A Buyers Guide:
What CAUSES LAW AND DAMAGES TO PROPERTY SALE
Here the two important pieces of document would be valuation report and the details of reserve- price fixed.
If a borrower in Jaipur who we’ll assume wants to purchase the said house sees the reserve price on the auction paper/displayed on website decides not to take a Brokers /Friend advice in liking property but check ALL relevant data . See all the information about Valuation Process followed for that property,property details as on date including encumbrances on property, condition of property,Comparable sales data, bank records etc.
If he feels that property worth Rupees XX Lacs is being put up for auction at a reserve price of mere Rupees 1 lac .He must ask for the documents specified above.
THEN AND ONLY THEN…
However, if the requirements as to valuation or sale have not been complied with in respect of such property in accordance with law and those documents disclose any infirmity in the sale process so advertised, the matter would certainly become material for challenge. Loan Settlement Lawyers would help you go through all those documents and auction notice paper carefully. Dont look at the RESERVE PRICE alone..
How Much Notice Is Required Before a Property Auction?
Rules 8 & 9 address principal sale protections with respect to enforcement of security interest against immovable secured assets.
The valuation of the secured asset & the reserve price determination happens before sale under Rule 8. Under subection(2) (emphasis mine) notice of public auction/ tender sale shall be published in TWO newspapers (one being a vernacular newspaper of wide circulation in the locality) throughW Paper of widest circulation in the locality in which the immovable secured asset is situated) as the case may be, so that, in the circumstances, reasonably may permit.
Rule 9 states that no sale shall be conducted until not less than 30 days from the date of the relevant publication of public notice/service of sale notice to the borrower as the case may be (emphasis mine) has elapsed under the Rule. Meaning this is the prescribed MINIMUM NOTICE before sale if this is a FIRST sale. However, there is a MINIMUM NOTICE if this is a SUBSEQUENT sale and there has been a prior unsuccessful attempt.
Dates matter.
That is why you should keep the envelope, email, newspaper cutting, possession notice AND auction publication. Don't screenshot the auction date and throw away the rest.
BK Singh Advocate can advise if your dates & mode of service conform with the statutory requirements when it comes to time-sensitive residential-property auctions.
Which Documents Should You Keep Ready for an Urgent Auction Review?
Documents can be expected to be in quite a disorder around auction time. Here is a checklist of documents you should try to collect :
- sanction letter; loan agreement;
- mortgage deed/ memo of deposit of title deeds; schedule of repayment;
- full loan account statement; evidence of payments made towards the loan which are not credited in lenders statement;
- NPAs / recall letters, if any; Sec 13(2) demand notice;
- representations / objections made under Sec 13(3A); lenders reply to such objections; notice of intention to take possession u/ s 13(4)
- any communication/ notice under section 14/ material received regarding possession;
- valuation report, if any;
- notice of reserve- price;
- auction / e-auction notice;
- newspaper advts;
- title documents of the property lent against;
- any correspondence regarding restructuring of the loan;
- OTS or settlement proposals;
- emailsids & letterheads to / from the bank / ARC;
- evidence of deposit of any amount post default. Orders of DRT / court (if any cases have been filed).
Note: Submit every doc even if it seems adverse. Your attorney will need all the documents to piece together the entire chronology for you.
Loan Settlement Lawyer can also cross verify if the demand amount quoted is same in all notices. Dont read demand notice , possession notice and auction notice in isolation specially if amounts mentioned or property description differ.
Can a Borrower Still Negotiate an OTS Before Auction?
Talks can be on even if recovery process has started. However, one should never assume that because you have sent in an OTS request that the auction date will be automatically stayed (postponed).
A letter to bank saying “settle my loan” does not operate as a stay order.
Even if the recovery agent tells you orally that bank “wants to settle with you”, you cannot treat such oral assurance as evidence that statutory recovery has been suspended.
Once the lender agrees to talks, then the amount payable, timeline, deadline for closure, status of any pending auction, what happens if entire amount is not received by deadline etc. etc.
all these terms should be clearly put in writing. Click here to read OTS – One Time Settlement options if you are a borrower who wants to explore settlement as one of the options. Click here to read Home Loan Settlement if you are in search of tips related to settlement of home loans.
BK Singh Advocate has posted our opinions on why fighting the case and settling with the bank should go hand in hand. Borrowers should defend their legal rights by fighting the case and at the same time see if a commercially viable solution is possible with the bank. Remember that the bank is under no compulsion to settle the matter just because you want to.
When Should You Contact a SARFAESI Auction Stay Lawyer in Jaipur?
Law exam should be made Most urgent only when Enforcement has started. i. e.At stage of possession/ sale.
Few sample red flags for specific reasons:
- Order for possession has been received;
- date of auction has been fixed;
- auction is scheduled in few weeks/days;
- borrower claiming that he was not given Section 13(2) notice;
- You have filed RCRs on his behalf but seem dubious of getting them credited;
- wrong description of property;
- account is not showing certain payments(important payments);
- reserve price is not matching with valuation;
- Bank proceeding on disputed settlement agreement;
- ARC has acquired the loan from bank and you want assignments/demands history from bank.
- Third party claiming separate right on the property;
- borrower has already filed an application in DRT and wants immediate interim relief;
- wanting possession from District Magistrate u/s 14.
- borrower wants to see OTS option and auction date is already fixed.
They can view details under Borrower Protection & Rights as well if issue is regarding any malafide conduct during recovery.
"In my view parameter of urgency should be decided on parameters of stage of litigation and not on how loudly the recovery agent speaks on phone." Says BK Singh Advocate
How Can Loan Settlement Lawyer Help With a Jaipur Property Auction?
Step 1. Of course. A Loan Settlement Lawyer can start off by making a timeline of the borrower’s SARFAESI matter.
It may consist of the default date, NPA-history, Sec. 13(2) notice, Receipt of Objections (if any), Possession demand, Property valuation, Reserve price, Auction notice, etc. Throw in any settlement correspondence if applicable.
Once a Loan Settlement Lawyer maps out the entire SARFAESI timeline, he/she will know where we can work with. 13(4) Proceedings can be contested in court & sorted out before the appropriate DRT. Settlement – if possible – can be discussed separately with the secured creditor. Redemption/ Payment – if the borrower wants to pay – can become time bound.
Service can even be verified if the recovery notices are being contested. (Read – SARFAESI Notice Guide on how to LEGALLY SERVE SARFAESI NOTICES)
BK Singh always recommend against borrowers relying on generic online postings of auction matters. They are URGENT. Loan Defaulter Case Study: Borrower A and Borrower B can receive word for word notices (color scheme or header doesn’t matter) with the Notice Title of “Sale Notice”. However, the legal predicaments for each borrower can be extremely different if it was served at different time periods, previous proceedings taken, type of property, their objections raised and/or existing DRT Judgements.
Your Loan Settlement Lawyer will not promise you the world to avoid your Pune property from being auctioned. All we want to know is if the borrower is entitled to any legal remedy and what can be done realistically before the auction happens.
Frequently Asked Questions
1 . Bank can auction residential house under SARFAESI ?
Yes they cant stop the auction. If that residential house was hypothecated/ mortgaged as security against some covered loan by you and if statutory preconditions for enforcing security interest are fulfilled then yes, the secured creditor has every right to enforce his security interest against you under SARFAESI. Merely living in the mortgaged house does not give any relief against SARFAESI action.
2.How many days notice under Section 13(2)?
Section 13(2) notice can be responded within no particular number of days. However borrower has maximum of 60 days to comply with demands contained in Section 13(2) notice before action is initiated under Section 13(4).
3.Can BK Singh Advocate help me stop auction before Debt Recovery Tribunal(Jaipur)?
BK Singh Advocate can go through facts of your case and guide you whether borrower is entitled to any relief from Debt Recovery Tribunal and what type of interim relief can be claimed. It is not possible to predict if DRT would give stay or not.
4.Am i get minimum 45 days to file application against section 13(2) notice from DRT?
You are getting it exactly opposite way Sir. When i told you that under Section 17, you have a limitation of 45 days beginning from the date of ACTION TAKEN under Section 13(4) of SARFAESI ACT. First of all we have to understand what PARTICULAR action has been taken under Section 13(4) and ON WHAT DATE it has been taken so that we can calculate limitation.
5.Can we stall auction because reserve price is very low?
Just because you owe less than what bank is selling your property for doesnt mean you can stop auction. Firstly rule 8 clearly states that a VALUATION of property HAS TO BE DONE by a registered valuer atleast 30 days before sale. Secondly, the RESERVE PRICE HAS TO BE AGREED UPON with secured creditor. Now both these procedures can be objected to.
6.If i send OTS application through courier will they stop auction?
OTS submission does not ensure a convey from Auction by virtue of submitting the same. Only if lender withdraws his recovery action voluntarily or if court/apptels tribunal orders in favor of borrower, can borrower hope to stall auction. Hence not necessarily.
7.Can Loan Settlement Lawyer help me even if the auction is going to happen in next few days?
Yes Sir, BK Singh Advocate can review the documents in your possession and provide his legal opinion on various laws which would apply in your case. Yes its pretty much time sensitive since auction would take place in couple of days but that doesnt mean we will take up the case. Once you contact us we will review your case.
8.Will bank auction agricultural land under SARFAESI?
No Bank cant auction agricultural land under SARFAESI. Section 31 SARFAESI clearly mentions that NOT ANY PART of SARFAESI will apply to agricultural land. However it still needs to be verified if land, in question falls under definition of agricultural land or not.
9.Why did DRT refuse my SARFAESI application?
You can Appeal to Appellate Tribunal under Section 18 against an order passed by DRT under Section 17. Appeal needs to be filed usually within 30 days of DRT receiving the order. But DO REMEMBER that the law also requires a pre deposit along with such appeals.
10.I dont have much time, which document should i send first for quick review of Jaipur auction case?
Kindly do send all documents related to your case starting from Section 13(2) notice, notice of possession, notice of auction sent by bank, loan statement, mortgage/deed of security you have signed at the time of loan sanction, any objections sent by you to bank and what was lenders reply(if any). Also include valuation papers, any orders passed by DRT in past if any etc. Once documents are received by BK Singh Advocate, he will be able to tell you the TIMELINE of your case and let you know if any other document is required.
Final thoughts
Avoid approaching Residential- Property auction under SARFAESI as if its “just another Recovery Notice!”: Dates matter when possession notices/ auction notices have been issued. Documents matter. Rights, duties, remedies and timelines are important. The statutes governing Sections 13, 17 and 18, namely SARFAESI Act in conjunction with Security Interest (Enforcement) Rules have given wide powers of enforcement to secured creditors. But these statutes should be read together keeping their merits in mind.
DRT Jaipur is a SARFAESI specialist Court. All SARFAESI Securitisation Applications (SAs) & Interim- relief cases filed in the jurisdiction of DRT Jaipur for borrowers located in Jaipur are handled by us. Loan Settlement Lawyer will review your loan agreements, notice of possession / auction, payment history, valuation reports and settlement proposals received. BK Singh Advocate will advise you on seeking remedy from DRT, settlement, payment to settle or redeem or any other legal alternative. There can be no predictions given for queries such as yours regarding Stay of Auction or Settlement Reply. Each case is different.
