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Requesting for downpayment paid for auction property
17-Feb-2026 (In Property Law)
SBI conducted an auction for a property, and I participated in the auction and paid 40% of the property value as the down payment, amounting to ₹16,29,000.
Subsequently, I applied for a home loan with SBI itself for the same property. However, my loan application was rejected on the ground that the Occupancy Certificate (OC) is missing.
I understand that the previous owner had obtained a loan from SBI for this same property. However, the bank is now stating that it is not possible to process my
If SBI itself conducted the auction and accepted 40% of the consideration, it is their legal duty to disclose all material defects and ensure that the property has clear and marketable title. Rejection of your loan on the ground of absence of Occupancy Certificate, after conducting the auction, raises serious issues of deficiency in service and unfair practice.
You should immediately issue a legal notice to SBI calling upon them either to (1) process the loan despite the OC issue, if such defect was known to them, or (2) refund the entire amount with interest and compensation, or (3) provide clear title documents and necessary approvals. A bank cannot suppress material facts and later deny loan or create hardship to a bona fide auction purchaser.
If they fail to resolve, you may file a complaint before the Consumer Commission for refund, interest, compensation and damages. Courts have taken a strict view in such matters where banks auction properties without proper disclosure. Prompt legal action will strengthen your position.
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Adv. Pavani Kumari
Guntur | 400+ Answers
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