SARFAESI Auction Stay Lawyer in Jaipur for Residential Property
Notice of home auction is the fear in the heart of every family member.
Till now you thought your home loan default is some loan amount problem.EMIs not paid on time. You get calls from bank , requests to restructure loans , crying to let you settle up. Once bank sends notice of auction of your residential property. Situation becomes different. The borrower think they will loose home. How can I shift my family to other place, unknown people will come to see my home which is so near to me heart.
Hence a SARFAESI auction stay lawyer in Jaipur will first review if bank/secured creditor has complied with the process of recovery as per law and if the borrower has any legal ground to battle against the bank at respective Debt Recovery Tribunal.
Loan settlement lawyers help borrowers facing issues with secured loans against home property, home possession notice, auction notice, DRT proceedings and loan settlement issues.
Notice of home auction can be stayed.
Notice of home auction is not always stayable.
Just because the property is your primary residence or you have a family who depends on your house does not become a ground to grant stay of auction. If your house was properly created as a security interest for the loan and all the preconditions for enforcement are met then SARFAESI Act allows the secured creditor to enforce its security. Section 31 does provide exemptions to security interests created on agricultural land, however that does not mean SARFAESI Act wonât apply to properties on which person resides.ââ
What this means is that you must have all the necessary documents in time.
BK Singh Advocate will typically review the loan documents, mortgage documents, notice served under Section 13(2), borrowerâs answer to objection (if any), notice of possession, valuation report, proposed reserve price, auction notice, account statements and correspondence with bank before suggesting the legal course.
The later you apply for stay of auction, the more time you give your creditor to proceed with the auction especially if the date of auction is near.
Why Is a Residential Property Auction in Jaipur So Urgent?
RESUME â Auction Under Sarfaesi is NOT Another Recovery Notice : DOâs
Donât treat a SARFAESI auction notice like yet another recovery notice !
A SARFAESI auction notice is a statutory mechanism through which an enforceable security interest can be sold, upon fulfilment of certain conditions.
The asset which is being targeted against for recovery from a Jaipur borrower could be his flat in Vaishali Nagar; his house at Mansarovar; his residential plot near Jagatpura; his colony house at Malviya Nagar or some other mortgaged premises he owns in Rajasthan.
An Auction notice will no doubt raise many questions in the minds of borrowers. Upon receiving the notice the typical questions that come to the borrowerâs mind are:-
- Whether can the bank sell the property ?
- Whether the property was valued properly ?
- Whether the bank served all the notices ?
- Whether the bank heard my objections ?
- Whether the Reserve price was fixed on the basis of valuation ?
- Whether the bank adhere to the timeline ?
- Whether I can settle with bank now ?
Loan Settlement Lawyer knows borrowers cannot depend on the information given in the auction notice to seek answers to their questions.
Loan Settlement Lawyer will still initiate action on Emi default notices but we treat the auction stage differently. Precisely because the risk has now moved from pressure to recover to the risk of losing your mortgaged property.
Posted on Friday, May 6th, 2016
As per latest(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 the bank does not mean the auction will get automatically stayed.
Quick Facts About SARFAESI Auction Stay
Section 13(2) allows issuance of demand notice asking borrower to repay the secured liability within a period of 60 days from the date of notice before enforcement measures under Section 13(4) are initiated provided statutory conditions are complied with.
Section 13(3A) mandates borrower to be given an opportunity to make a representation/objection against demand after which secured creditor must act in accordance with the Act.
Section 13(4) enlists the enforcement measures which can be resorted to after statutory conditions are complied with.
An application can be preferred to Debt Recovery Tribunal under Section 17 against action taken under Section 13(4) mostly within a period of 45 days from the date of action complained of by a person aggrieved.
Rules 8 and 9 make provision for valuation, reserve-price and notice in cases of first sale of immovable property including allowing 30 days within which sale-notice must be served.
Section 13(8) mentions statutory redemption i.e. payment to secured creditorâs dues along with costs, charges and expenses before the date of publication of sale notice under certain circumstances mentioned in provision itself.
Stay against action initiated by secured creditors is not guaranteed with Debt Recovery Tribunal. Borrower has to convince the Tribunal that he has a legally tenable case with regard to the recovery measures disputed as well as law invoked 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 weâll 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 THENâŚ
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 âsettle my loanâ does not operate as a stay order.
Even if the recovery agent tells you orally that bank âwants to settle with youâ, 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 â 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 borrowerâs 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 â if possible â can be discussed separately with the secured creditor. Redemption/ Payment â if the borrower wants to pay â can become time bound.
Service can even be verified if the recovery notices are being contested. (Read â 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 doesnât matter) with the Notice Title of âSale Noticeâ. 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 . Can bank auction residential house under SARFAESI ?
Yes they can. If the residential house was hypothecated/mortgaged as security against a covered loan and statutory preconditions for enforcement are met then the secured creditor can enforce his security interest under SARFAESI. Merely occupying the mortgaged house would not entitle you relief from SARFAESI action.
2. How many days Section 13(2) notice?
Section 13(2) notice need not be responded within any fixed number of days but borrower has 60 days to comply with the demands contained in the Section 13(2) notice prior to initiation of action under Section 13(4).
3. Can BK Singh Advocate file stop auction before DRT Jaipur?
BK Singh Advocate can look into the facts of your case and advise whether the borrower is entitled to any relief from the DRT and what kind of interim relief can be claimed. Its not possible to tell in advance whether DRT would grant stay or not.
4. Am i get 45 days to file against section 13(2) notice from DRT?
You seem to have misunderstood my point. When I said 45 day limitation under Section 17 begins to run from the date of action taken under Section 13(4), we need to first identify the PARTICULAR action taken and its DATE to compute limitation.
5. Can we stop auction as reserve price is very low?
Just because you owe less than what your property is worth does not mean you can stop the auction. Firstly, as per Rule 8 a valuation of the property has to be conducted by a registered valuer at least 30 days before sale. Secondly, the reserve price has to be determined in agreement with the secured creditor. Both these proceedings have to be scrutinized.
6. If i send OTS application, will the auction be stopped?
OTS submission does not automatically guarantee a stay on auction. Only if the lender voluntarily withdraws his recovery action or if a competent court/appeals tribunal/grants relief, can the borrower hope that the auction will be stopped.
7. Can Loan Settlement Lawyer help me if the auction is in few days?
BK Singh Advocate can review what documents you have and provide a legal opinion on the laws which would apply to your case. Yes its time sensitive since the auction is scheduled to take place soon but that doesnt mean we cant review your case.
8. Can bank auction agricultural land under SARFAESI?
No, banks cannot auction agricultural land under SARFAESI. Section 31 of SARFAESI explicitly mentions that no part of SARFAESI will apply to agricultural land. It still needs to be confirmed whether the land in question falls under definition of agricultural land.
9. DRT refuses my SARFAESI application, what now?
Appeal to the Appellate Tribunal under Section 18 against an order passed by the DRT under Section 17. The appeal has to be made generally within 30 days from when DRT received the order. Remember that the statute also mandates a pre deposit along with such appeals.
10. Which document to send first for quick review of Jaipur auction case?
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 signed, any objections already sent by you to bank and lenderâs response if any, valuation papers, any orders passed by DRT etc. Once BK Singh Advocate has received the documents he would be able to tell you the TIMELINE and let you know if any other document is required.
Final Thoughts
Donât treat Residential- Property auction under SARFAESI as just another Recovery Notice! :
Dates become important when possession notices/ auction notices have been served. Particular documents become important.
SARFAESI has provided wide powers of enforcement to secured creditors within a framework of defined statutes. The statutes dealing with Rights, duties, time frames and remedies namely Sections 13, 17 and 18, (SARFAESI Act in conjunction with Security Interest (Enforcement) Rules) should be read together on their merits.
DRT Jaipur specializes in SARFAESI. It handles SARFAESI Securitisation Applications (SAs) and Interim- relief cases filed within its jurisdiction for all borrowers situated in Jaipur.
Loan Settlement Lawyer can analyze your loan documents, notice of possession / auction, payment record, valuation reports and the settlement offers received. BK Singh Advocate can guide you whether you should pursue a remedy from DRT, settle, pay up to redeem or explore some other legal option.
NO predictions can be given for queries like yours on Stay of Auction or Settlement Reply. Every case is unique.
