Yes, banks in India can conduct auctions for properties even if they don’t have physical possession of the property. This often happens in cases where the property is under dispute, the borrower has defaulted on the loan, or the property is occupied by tenants or unauthorized occupants. Here’s how it typically works:
- Legal Ownership: The bank holds legal ownership or lien over the property due to the borrower’s default on the loan. This ownership allows the bank to initiate the auction process even if physical possession of the property has not been obtained.
- Auction Notice: The bank issues auction notices in newspapers and on their website, providing details of the property to be auctioned, auction dates, terms, and conditions. The notice may include information about the property’s physical possession status, such as whether it’s occupied or vacant.
- Legal Disclosure: The auction notice may disclose the status of physical possession of the property. If the property is occupied, potential buyers are informed about it beforehand.
- Buyer’s Due Diligence: Prospective buyers should conduct thorough due diligence on the property, including verifying its physical possession status, as stated in the auction notice. They should assess any potential risks associated with acquiring a property that is currently occupied.
- Possession Handover: After the auction, if the winning bidder successfully acquires the property, they may need to initiate legal proceedings to obtain physical possession if the property is still occupied. This process involves legal eviction procedures as per applicable laws.
- Post-Auction Proceedings: If the property is vacant at the time of auction, the winning bidder can take possession immediately after completing the purchase process and paying the necessary dues to the bank.
It’s essential for potential buyers to carefully review the auction notice and conduct thorough due diligence, including understanding the property’s physical possession status, before participating in a bank auction. Additionally, seeking legal advice can help buyers navigate any potential challenges related to physical possession or occupancy of the property.