My business took a loan of ₹6 lakh from a nationalized bank in Tamil Nadu back in 2012. I pledged my property papers as security, but never registered a mortgage. The loan went into default in June 2016, and I’ve received a notice under the SARFAESI Act. Will the bank be able to sell my property under this law if the property is still registered in my name? If they auction the property, do I need to agree to the sale? Will they force me to sign a sale deed in favor of the buyer?

Apni Law
Apni Law
Law Forum › Category: Property › My business took a loan of ₹6 lakh from a nationalized bank in Tamil Nadu back in 2012. I pledged my property papers as security, but never registered a mortgage. The loan went into default in June 2016, and I’ve received a notice under the SARFAESI Act. Will the bank be able to sell my property under this law if the property is still registered in my name? If they auction the property, do I need to agree to the sale? Will they force me to sign a sale deed in favor of the buyer?
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Apni Law Staff asked 3 years ago

My business took a loan of ₹6 lakh from a nationalized bank in Tamil Nadu back in 2012. I pledged my property papers as security, but never registered a mortgage. The loan went into default in June 2016, and I’ve received a notice under the SARFAESI Act. Will the bank be able to sell my property under this law if the property is still registered in my name? If they auction the property, do I need to agree to the sale? Will they force me to sign a sale deed in favor of the buyer?

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Apni Law Staff answered 3 years ago

Yes, the bank can initiate sale proceedings under the SARFAESI Act even without a registered mortgage. You do not need to agree to the sale, but the bank can legally proceed with the auction. They can’t force you to sign a sale deed, but the auction buyer will acquire legal ownership of the property.

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