Banks in India oftentimes announce property auctions as a means to recover defaulted loan dues of borrowers. The property in question here is the property pledged by the borrower to the bank as collateral or guarantee against the loan.

Banks,DRT (Debts Recovery Tribunal),NBFC (Non Banking Financial Companies) NCLT (National Company Law Tribunal), ARC (Asset Reconstruction Company) and High Court

1.PRICE ADVANTAGE: Approximately 20 – 60 % cheaper than the market price.
2.LEGALLY SAFE: Since Banks / Financial Institutions have given loans after verification of all the legal aspects only, these are 100 % legally safe.
3.CREDIBILITY OF SELLER: You are buying from a Bank / Financial institution, which is authorized by Govt of India to sell such properties.
4.TIME FRAME: Entire transaction will be over in less than one months period. Ownership in one month.
5.TRANSPARENCY: 100 % transparent transaction.
6.PROBABILITY: 90% chances of winning in the Bank Auction.

The Bank will set a base price or reserve price for a particular property based on the valuation report. The bank will fix a day for auction and 10% of the EMD amount(earnest money deposit)has to be paid as Demand Draft or RTGS prior to the day of the auction in order to participate in the auction. If you win the auction by bidding the highest price then you have to pay 15 percent of the sale amount which should be paid as a Demand draft or RTGS to confirm your sale order. The balance amount should be paid within 15 days to 1 month.
Simply pay 25 % of the property value on the day of auction. The remaining 75% amount should be paid within 15 days to 1 month.
Further the Bank will give you all the documents such as Sales Certificate, Original Sale Deed and the Parent document of the property after you pay the remaining 75%

The Bank will set a base price or reserve price for a particular property based on the valuation report. The bank will fix a day for auction and 10% of the EMD amount(earnest money deposit)has to be paid as Demand Draft or RTGS prior to the day of the auction in order to participate in the auction.

Earnest money is refundable. if you are unsuccessful and wish to get the refund of your EMD, you have to give EMD refund request to bank. Within 1-3 working days, your payment will be refunded.

A ‘sale certificate’ refers to the legal document issued by the Authorised Officer (AO) to the buyer of a foreclosed property in an auction.

Yes it’s 100% safe to buy bank auction property compared to owner sale properties as the documents are already pre verified by the bank.

Auction properties are sold on an “As is where is” “whatever there is basis”.
It is the responsibility of the prospective buyer to discharge dues such as property tax, society maintenance charge, pending EB bills. (Attachments will not cover).

As some final thoughts, we have some tips now that you should make sure of before investing your earnest money in an auctioned property. It is true that auctioned properties are relatively safe and trustworthy, but do not forget to make sure of the following: Encumbrances,Statutory dues,Title and mortgage documents The point here is to check the outstanding payments like municipal taxes, society dues, litigations, electricity bills, municipal dues, and other taxes attached with the property, etc.  It is highly likely that the bank defaulter would not have paid such charges and since the properties are sold under  ‘as it is where it is basis,’ the ball will be in your court. You will need to prepare yourself in advance for how much money, over and above the sale price, you are willing to spend for possession of the property.

Symbolic possession and physical possession.

Symbolic possession means that the bank might have rights over the property but it does not have the key to the property. Banks get the possession notice under section 13 (4) and If there happens to be no further proceedings, the bank has the right to take physical possession of the property under Section 14 of the Act through District Magistrate or Chief Metropolitan Magistrate. “Symbolic possession is when the bank has the legal right over a property, even though the previous owner continues to have physical possession (occupancy) in the property. Under the law, banks are required to take physical possession and then transfer the rights to the buyer.

Physical possession means a bank or financial institution have the key of the property.

The Chief Metropolitan Magistrate’s court located at Egmore chennai.

Chief Judicial Magistrate court located at Kanchipuram, Thiruvallur and Chengalpattu District.

All types of real estate, including Flat, vacant plot/Land,Individual house, Agriculture property,commercial property, industrial property.

• The Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) provides speedy redressal to lenders and borrowers through filing of Original Applications (OAs) in Debts Recovery Tribunals (DRTs) and appeals in Debts Recovery Appellate Tribunals (DRATs).
• The Securitisation and Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 (SARFAESI Act) provides access to banks and financial institutions covered under the Act for recovery of secured debts from the borrowers without the intervention of the Courts at the first stage. Securitisation Appeals (SAs) can be filed with the DRTs by those aggrieved against action taken by secured creditors under the SARFAESI Act.

Securitization and Reconstruction of Financial Assets and Enforcement of Security Interests Act (SARFAESI Act), 2002
The SARFAESI Act, 2002 aims to regulate securitization and reconstruction of financial assets and enforcement of security interest and to provide for a Central database of security interests created on property rights and for connected matters therewith. The Act has simplified the recovery procedure for banks and specified financial institutions for recovery of secured debts from borrowers without intervention of Courts at the first stage. Borrowers can file applications in the Debts Recovery Tribunals (DRTs) against action taken for enforcement of security interest under this Act, with the appellate jurisdiction for such applications lying with the Debts Recovery Appellate Tribunals (DRATs).The Act is applicable to cases where security interest for securing repayment of any financial asset is more than Rs.1 lakh and the amount due is 20% or more of the principal amount and interest thereon. The Act is not applicable to any security interest created in agricultural land and certain properties not liable to attachment under some specified Acts.
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After the bidder wins the auction A ‘sale certificate’ will be issued to him only after the full payment to the bank. A ‘sale certificate’ refers to the legal document issued by the Authorised Officer (AO) to the buyer. Under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act (‘SARFAESI Act’), if the borrower of a mortgage defaults on her equated monthly instalments (EMIs) three times consecutively, the lender has a right to acquire and auction off her property. An AO is appointed by the lender to foreclose the property, auction it off and issue a sale certificate to the buyer of that property.
A ‘sale deed’ on the other hand, is a conveyance document recording the sale of a property from a buyer to a seller. A ‘sale agreement’, or ‘agreement to sell’ enlists all the conditions that a potential buyer and seller of a property must fulfil so that the property can be purchased by the buyer on a fixed date.

The details of properties put up for e-auctions may be accessed through the links provided in the Bank advertisement. There is designated contact person also for auction at the Branches whom prospective Buyers may approach to for any clarification regarding the auction process and the property he /she is interested in and may inspect the properties of their interest.
Requirements for participating in e-Auction
EMD for the particular property as mentioned in the e-Auction notice.
KYC Documents – to be submitted to the concerned Branch.
Valid Digital Signature -Bidders may approach e-auctioneers or any other authorised agency to obtain digital signature.( not mandatory for all banks/court auction )
Login Id and Password– Will be sent to the email id of the bidders by e-auctioneers after the deposit of EMD and submission of KYC documents to the concerned branch
Bidders to login and bid in the bank website / auction portal / Auction service provider site during the auction hours on the date of e-Auction as per auction rules.

Auction properties are 20 – 60 % cheaper than the market price.

NPA expands to non-performing assets (NPA). Reserve Bank of India defines NPA as any advance or loan that is overdue for more than 90 days. “An asset becomes non-performing when it ceases to generate income for the bank,” said RBI in a circular form 2007. To be more attuned to international practises, RBI implemented the 90 days overdue norm for identifying NPAs has been made applicable from the year ended March 31, 2004. Depending on how long the assets have been an NPA, there are different types of non-performing assets as well.

The interim sale certificate is the certificate issued by the bank after successful bidder payed 25% of the highest bid amount to the bank.

Digital Signature Certificates (DSC) are the digital equivalent (that is electronic format) of physical or paper certificates.Examples of physical certificates are drivers’ licenses, passports or membership cards.Certificates serve as a proof of identity of an individual for a certain purpose; for example, a driver’s license identifies someone who can legally drive in a particular country. Likewise, a digital certificate can be presented electronically to prove your identity, to access information or services on the Internet or to sign certain documents digitally.

The sale certificate shall be issued in the name of the successful bidder who has submitted his KYC documents for the auction.

The sale certificate shall be issued in the name of the successful bidder.No request for change of name in the sale certificate other than the person who submitted the bid / participated in the e-Auction will be entertained.

Some banks ask for digital signature not all banks. if you need digital certificate please call or whatsapp 8681073762.

The date on which the auction property shown physically to the prospective buyers by bank appointed people or company.

Reserve Price is the base price for the auction property below which the property will not be sold.
It is starting price from which auction begins.

The bid increment is the amount by which the current high bid is raised each time someone places a higher bid.

Auctions Auto extension gives you the ability to automatically extend the auctions end time by X seconds, if someone bids in the last Y seconds of the auctions duration.Example: unlimited extension of ‘05’minutes i.e., the end time of e-auction will be extended by 05 minutes each time if bid is made within the last 05 minutes before closure of auction.

The EMD shall not carry any interest for successful or unsuccessful bidders.

The Successful Bidder is the one who placed the highest price compared to others by the end time of the Auction.

The Successful/highest bidder will be notified to their registered email.

The successful bidder shall deposit 25% of the sale price inclusive of EMD already paid immediatley on declaring him/her as the successful bidder and the balance 75% within 15 days from the date of confirmation of sale by secured creditor.
The successful bidder shall deposit 25% of the sale price inclusive of EMD already paid immediatley on declaring him/her as the successful bidder and the balance 75% within 15 days from the date of confirmation of sale by secured creditor.

After declaring Successful Bidder if the successful bidder fails to pay remaining 15% after sale confiramation the EMD will be forfeited.

After deposting 25%(including EMD) by the Successful Bidder if the successful bidder fails to pay remaining 75% after sale confirmation within 15 days of the auction,the deposit 25% made by him/her shall be forfeited by the bank.

Yes bank has right to cancel the auction.

Yes Bank has right to postpone the auction.

The Authorised Officer may accept/reject the final price of e- Auction without assigning any reason thereof.

The date on which online auction conducted by the bank appointed providers for online bidding for only EMD payed bidders.

The properties like Sites, Plots, Flats, Villas ,Duplex Houses, Factory Lands, Agriculture Land, Non Agriculture Land, Shops, Offices and Commercial Properties.

Properties which can be moved from place to place like Plant and Machinery, Cars/Buses/Vehicles,Gold Ornaments etc.