Usually, auction is required to be conducted by a bank of only an asset or property of which possession has been taken by the bank under the SARFAESI Act. In fact, Section 14 of the said Act specifically provides for the secured creditor (i.e., the bank) to take possession of the property with the help of the Chief Metropolitan Magistrate or the District Magistrate who can help in taking possession even by force. Even Section 13 also refers to taking possession of the secured assets of the borrower. Therefore, the bank is supposed to auction a property only after taking possession thereof.
In any case, the auction is conducted on as is where is basis.
It is not advisable to bid for a property during such auction if the bank is not giving you the vacant and peaceful possession of the property. If you buy such property when the borrower and his tenant are still occupying the property, then you will have to subsequently get the property vacated which is not an easy task. You may have to file an eviction suit in court that may take years. Therefore, it is advisable to bid for a property at such action only if the bank is able to ensure vacant and peaceful possession of the property.
Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers. List of his YouTube Videos.
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