Recently, it was discovered that one of the leading banks had placed advertisement to e-auction an apartment in Bangalore and the bidders thought that SINCE, IT IS A BANK ATTACHED PROPERTY AND THE TITLES WILL BE PERFECT, it is not so, the apartment was constructed on the BDA acquired land and the owners had misled and fabricated documents and sold the property to the developer, who in turn, obtained the clearances and built the apartment.  The notorious buyer of the property came to know about this and defaulted in the EMI payments.  The bank attached the property and e-auctioned it.  But, it was stopped.  Complaints lodged with the bank management and the BDA.

Another case.

In Bangalore`s high-end Koramangala, the BDA had acquired and compensation was paid but did not develop a portion of that land measuring around 10,000 square feet for a long time.  Some person created a fake revenue document and sold the property.  The buyer borrowed money from Axxx Bank, naturally he defaulted in the payment of EMI.  The bank attached the property and auctioned it.  A NRI participated in the auction, bought it and resold the same within few months.  Now, a palatial housing complex is sitting on it.

This is the latest

A man from Kerala who bought a property auctioned by the State Financial Corporation and found that it was occupied by a third party. His approached the High Court with a plea to get back the money he paid in the auction. But SFC pointed out that it had auctioned the property on an “As is where is” basis.

J.K, a resident of Calicut in Kerala, approached the High Court of Karnataka against the KSFC. He had bought a property from KSFC through e-auction in January 2012. He bid the highest amount of Rs 8,01,000. He deposited the amount with SFC and was issued a sale certificate.

J.K.s grievance before the HC was that though he was given a sale certificate by SFC, he was not put in physical possession of the property. The property was in possession of a tenant. The tenant had taken the property on rent from the previous owner from whom the SFC had taken over the property. Since he was not in a position to enjoy the property, J.K. wanted the court to cancel the sale certificate and order KSFC to refund his money with interest.

SFC submitted that the terms and conditions of the sale was under the SARFAESI Act. The condition that was displayed in the KSFC website pointed out “that the sale was on ‘as is where is’ basis.” J.K  had paid the earnest money deposit and the communication in that regard also indicated that the possession of the property is on ‘as is where is’ basis after the receipt of the entire amount. J.K had deposited the balance amount after which he was given the sale certificate.

The HC in its judgement noted that there was clear understanding that the property was being sold on ‘as is where is’ basis. This fact was also made known to J.K, after the bid when he was asked to deposit the balance amount. He also had the benefit of inspecting the property before confirming the sale. Therefore it was difficult for the court to accept his contentions. An earlier HC judgment had also upheld the ‘as is where is’ clause in property sales. Thus rejecting his contentions, the HC ordered, “Therefore, if these aspects are kept in view, when the sale has been confirmed and the sale certificate has been issued in favour of the petitioner, this court would not be justified in setting aside such sale certificate and directing repayment of the amount.” The court noted that J.K would have to initiate proceedings against the tenant to take over possession and SFC was directed to provide him “all assistance” in this regard

Resale Apartments and Resale sites – is it safe? Maja Talkies apartment stories!!!

There are many apartments which are for resale, financed by Banks and marketed on internet and through agents.

The buyers of properties are under MISCONCEPTION that the titles are good and there is no need to check the titles and buy it without proper and due diligent scrutiny.

Some financial institutions, learning upon the defaulting borrower, immediately initiates the recovery proceedings and in some cases, upon the information about the illegality or the irregularity or violation, both the lender and borrower, begin the MARKETING PROCESS through agents and internet.  In majority of the cases, the bank does not offer HOME LOAN.  The agent ( in connection with the bank ) locates another bank or financial institution to fund the purchase of such properties.  BE CAREFUL.

is not better to conduct a thorough enquiry into the titles and the compliance before the purchase of such properties?

In one case, in Koramangala, the seller borrowed money from a Bank and deliberately defaulted and the prime property was attached and put into auction.  A NRI contested the bid and won the bid.  He paid the bid amount to the bank and acquired the property.  Immediately upon the purchase, offered to sell the property, stating that the property was bought in the auction.  The buyers believed it and paid money at bought the property.

The true story is different.

The land or property in question was a land acquired by BDA long back and could not develop a portion of the property and was left as it is.  The land mafia, created fake documents in the name of ( old madiwala organisation Katha) and sold the property to one of the buyer, who borrowed the money from the bank, with an intention to cheat and deliberately became a defaulter.  The NRI, bought and sold the same property.