On 23rd September, Anand Peoples Cooperative Bank Ltd. (in liquidation) gave an auction notice (2nd attempt) for a mortgaged property in Naya Padkar – a local Gujarati newspaper. As per the auction notice, the mortgaged property belonged to the guarantors – Shri Arvind Shanabhai Patel and Shri Uday Kantibhai Patel. The borrower was Shri Kantibhai Shanabhai Patel.
When we ran our property matching algorithm for the auction notice above, it threw up a matching public notice for the same property. The matching notice was published on 9th July 2017 by an advocate on behalf of his clients – Shri Ketanbhai Arvindbhai Patel and Shri Samirbhai Arvindbhai Patel.
The clients claimed to be 50% owners of the mortgaged property and have filed a suit in the Civil Court against the auction. The notice warned the public in general that buyer from that auction would not have any rights to their undivided share in the mortgaged property.
As many of you may have noticed from the names, the borrower, the guarantors and the objectors to auction all appear to be belonging to the same extended family. This raises some interesting questions.
- Would such an objection stand legal scrutiny or is it just a delaying technique?
- Are there accepted practices in the lenders SOPs, where a check is carried out whether the borrower/guarantor is authorized to mortgage a property?
- Is there a way to check whether the property offered for mortgage has an explicit or implicit interest of a person/entity who is not party to the borrowing agreement?
To the best of my understanding, a property inherited by a Hindu male would have an inherent interest of his immediate family – his wife and children. If the property is purchased by a Hindu male from his self generated income, the interest of his immediate family is not automatic. However, it would be tricky if the property is purchased by a Hindu male from the proceeds of an inherited property.
Do comment and share your views and experiences.
PS: Public notice objecting to auction is not posted as currently LinkedIn allows only 1 image with an article. Do drop me a message if you want the other image.