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bank auctioned collateral security for a lesser value than market valu


09-Dec-2023 (In Recovery Law)
SBH auctioned factory land & sheds for Rs.2.47 Cr to a single bidder in October 2015. The purchaser mortgaged the same property to andhra bank and availed loan Rs.8.50 Cr. Andhra Bank valuator valued the property for Rs.9.81 Cr which was mentioned in Sanction Letter. We found the above fact in 2022. SBH filed OA in DRT, which is pending for orders. Pl suggest what options available to me as a guarator of the loans availed by the SBH borrower.
Answers (1)

Answer #1
635 votes
The fair market value of property is very important while fixing the value of the property in auction proceedings . Bank cannot ignore that provision and if the bank has violated undervalued the value of property then it can be challenged inappropriate forum to cancel the auction proceeding. When a statute prescribes a thing to be the done in a particular way then it must be done in that way . Sarfaesi actions can be challenged with strong legal grounds.
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