Bank has to take legal proceedings to set aside fraudulent sale deed
if bank fails to do so you take legal proceedings to set aside sale deed
please note that once sale certificate is issued you have clear and marketable title to property
I bought a property from a bank auction under SARFAESI Act, but the defaulter already sold the land
I bought a property from a bank e-auction under SARFAESI Act, and got the sale certificate issued from the bank after completion of my full payment on time. But the defaulter/ borrower already sold the property while was in mortgage with the bank & bank issues notice under section 13(2), 13(4) of SARFAESI Act, 2002. He had done this sale fraudulently. The fraudulent transaction is being reflected in Encumbrance Certificate and the bank mortgage is also reflected. Being satisfied with the SARFAESI Act procedures from the bank. I purchased the property. Now what is the way to cancel the fraudulent documents.
Asked 10 months ago in Property Law
Religion: Hindu
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Since it's a nationalised government bank the works after the auction sale was very slow, so I filed a writ petition against the TN registration officeer like sub- registrar, District Registration officer. And included bank as the respondent one, followed by the TN registration and borrower and purchasers. The case is admitted and court notice has been served to the parties. My question is am I in the correct path. Please guide me with the detailed explanation.
Asked 10 months ago
You shoukd have taken detailed title search at time of purchase of property
2) bank tends to sell property in auction on as is where is basis
3) suit has to be filed to set aside fraudulent sale deed as property was mortgaged to bank when property was sold
4) HC would direct you to file suit to set aside sale deed as it may not intervene in writ
You can instruct the bank to deliver possession of the property that you have purchased.
If the bank don't respond to you may file a suit against bank seeking direction to deliver possession or to return the consideration amount with interest.
It is not known for what reason you have filed writ petition against sub registrar and district registrar.
The problem is with the bank and not with the registration department.
What is the relief sought in the writ petition?
It appears to be a wrong move to approach high court with writ petition.
However you can revert with case details for more opinion
Yes you have taken correct course of action by filing writ
File FIR against bank and borrower.
- Since, this property was mortgaged with the bank , it means that the bank having full right over the property till the finalization of the loan amount from the defaulter.
- Hence, upon getting the information of selling the property by the borrower/defaulter , it is the duty of bank to take legal action against him for the offence of cheating and breach of trust.
- Further , it is the duty of the bank to deliver the peaceful physical possession of the property to you , after cancelling the said sale deed .
- Hence, you should take legal action against the bank , and no case is made out against the TN registration officer like sub- registrar, District Registration officer .
- You can file a declaration suit before the court for declaring the sale deed invalid after making the bank as party.
- You can send a legal notice to the bank before filing the suit .
Dear client,
By bringing a writ suit against the bank, the registration authorities, and other relevant persons, you have acted appropriately. Your purchase made through an online auction is generally regarded as legitimate under the SARFAESI Act, and the bank's sale certificate supports this claim. Seeking legal recourse is consistent with your focus on using a writ petition to contest the forged documents. In the court proceedings, it is imperative that you draw attention to the violations of SARFAESI Act Sections 13(2) and 13(4), stressing the bank's notice and your adherence to the lawful acquisition process. Furthermore, since registration agencies are involved in registering and confirming real estate transactions, their involvement is essential. Their inability to stop fraudulent transactions and keep proper records—possibly in violation of applicable land registration laws—is probably the basis of your case against them. Make sure your legal counsel highlights the disparities in the Encumbrance Certificate and proves the legitimacy of your acquisition via the SARFAESI Act.
Hope this helps you.
yes writ petition is the right course
no need to approach the DRT in any s.17 SARFAESI application
here the bank has misled you
did the bank even take the symbolic possession of the property? i believe not
did the bank even apply to the Magistrate for getting the physical possession of the property before issuing public notice for auction?
there will hardly be any buyer who would purchase a property whose possession he would not get
so if any sale was done by the borrower while the property was still under the bank's mortgage and without the bank's NOC would be subservient to the sale conducted by the bank by public auction
however for your writ petition to be maintainable you will have to show material to the court showing that there were non-disclosures by the bank regarding the possession , as required by the SARFAESI Act and its rules, before putting the property to public auction
as regards the EC reflecting the name of the borrower's purchaser, that due diligence was for you to do as an auction purchaser before making payment to the bank.
This is the correct path. You could have also made party to the present occupier of the property as his sale is void without NOC from the existing encumberer which is bank in this case. If bank did not issue an NOC, the owner did not have a freehold to sell the property to him.
The present possessor although been defrauded can proceed against his Vendor to recover his money. Hope this helps.
