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SC - Late payment of auction money will hold auction as void
SC - Late payment of auction money will hold auction as void
Here is a word of caution for banks giving loans after keeping property as security. Banks, if your loanee does not pay loan and you ultimately decide to sell the property to recover loan, then you should religiously follow the rules and timelines laid down by SARFAESI Act. Any non-compliance would hold the auction void and would washout the sale made by you. This has been held by Supreme Court of India.
1. Sridhar Enterprises took a loan of Rs190Lac from Bank of Baroda.
2. Sridhar kept his factory as a security for loan.
3. As Sridhar defaulted, bank started the proceedings under SARFAESI Act
4. That is BOB held an auction of property and finally sold it off.
5. Sridhar felt aggreived and he procured information under RTI
6. He found out that the purchaser did not pay the purchase money on time as specified in the Act.
7. So, Sridhar filed a court case and then a writ petition before the Supreme Court of India.
8. In Supreme Court, Sridhar's attorney pleaded the same.
9. The honorable Supreme Court ordered in favour of Sridhar and held the auction to be void.
10. The Supreme court stated that a right to hold property is a constitutional right as well as a human right. A person cannot be deprived of his property except in accordance with the provisions of a statute.
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SC - Late payment of auction money will hold auction as void
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