If you fail to repay the loan bank will auction the property and sue you to recover balance amount 

Well, if avoiding the loan was your priority then you must have been successful.

However, even if the property was auctioned and sold then also your CIBIL would not have been different.

In other words your primary objective is fulfilled and now you are crying for bonus. 

1. Settle lender bank by clearing all dues. After that seek eviction of trespasser by filing a suit for recovery of possession seeking payment of rent from the date of possession.
2. Bank will not fight against the trespassed for you as long as trespassed in possession, they need easy money.
3. Approach bank and convince it take possession of house under serfaesi issue notice under section 13 as the loan account is by now npa.
4. You can take part in auction, pay the bid amount and recovery the possession.

1. 
   Negotiate with Kotak Bank – Request a one-time settlement (OTS) or auction. Offer to pay the shortfall.
2. 
   CIBIL Repair – Ensure the status is updated as "Closed" after full payment. Use a secured credit card to rebuild credit.
3. 
   Eviction – Legal action may be needed to remove the occupant, as banks prefer vacant properties for auction.

For detailed, personalized advice, consider a phone consultancy. Hope you find the information helpful. You are free to contact me for further discussion. If you could spare two minutes of your time to write a review, it would be greatly appreciated and bring immense happiness to read it. Thank you. Shubham Goyal.

You should have filed eviction suit against him. The court would have evicted him and also would have given the rent to you 

CIBIL has nothing to do in this regard.

You can talk to the bank and try to settle the matter by making one time settlement.

You can negotiate the settlement accordingly and can send a request letter to Bank for withdrawing the report sent to CIBIL with a copy endorsed to the CIBIL directly.

- As per the RBI, the bank should give proper time and offers for the settlement of loan amount. on the ground of health and sudden loss.

- The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act is a powerful instrument in the hands of the banks and financial institutions (FIs) as secured creditors.

- If the said tenant is not vacating the property , the you can send a notice to the said bank to proceed for the auction and to recover the amount from the sale proceed. 

- Further, if you want to get the said property then you can settle the dispute with the bank after payment the loan outstanding amount. 

- However, in this case you will have to file an eviction petition before the Court to evict the occupier tenant.

Dear Client,

Your case pertains to home loan default, occupation of property, and CIBIL score effect. This is what you can do to settle the case and restore your CIBIL score:

1. Talk to Kotak Bank & Ask for Auction

As Kotak Bank has acquired the loan, reach out to their loan recovery division and write to them officially asking them to initiate a property auction under the SARFAESI Act, 2002.

You can offer that if there is a deficitafter auction, you are ready to pay the balance amount, which can assist in CIBIL score enhancement.

If the bank is not acting, issue a legal notice asking them to go ahead with auction or accept a one-time settlement (OTS).

2. Address the Unauthorized Occupant

If the occupant is staying illegally, you need to file eviction proceedings.

File a police complaint for illegalpossession or a civil suit for eviction if he does not vacate.

This will remove legal obstacles for the bank to conduct the auction.

3. One-Time Settlement (OTS) with the Bank

Banks tend to settle on written-off loans.

Negotiate an OTS with Kotak Bank and obtain a "No Dues Certificate" uponsettlement.

After completing the OTS, ensure they mark CIBIL records as "Settled" or "Closed."

4. CIBIL Score Improvement

After the settlement, request the bank to notify the credit bureaus about the proper status.

Utilize a small secured personal loanor credit card (if available) to startrebuilding your credit score in a small way.

Final Advice

Settlement discussions with the bank should be done first, as a written-off loan will inhibit your ability to borrow in the future.

Proceed with legal eviction against the unauthorized tenant to take back the property in your possession.

In case the bank does not agree to auction the property, consult a lawyerto compel action under the SARFAESI Act.

He would not vacate on receipt of auction notice 

he would contest auction proceedings by approaching DRT to seek stay of auction 

You can approach the bank directly and discuss with the bank manager about the proposed action and proceed as advised by bank or consult your lawyer before approaching bank

- Yes, you can settle the dispute with the bank without the presence of that person. 

You can try the same if it works bitt same is not a proper legal procedure 

Bank may settle for principal amount 

- The bank can waive the interest amount , if you will show the bank your financial problems. 

The write off amount may differ to the actual amount outstanding as of now if you are approaching bank for settlement 

You can enquire from bank itself directly 

You can give them offer of 50 percent