Electronic auction of
properties by banks in India can not be challenged in the modern era of social
networks, the Madras High Court ruled.
We should take note
of the fact that we are in the age of Facebook, You Tube and Twitter. We are in
an age where man has set his sights on planets which are many light years
away, judges M Jaichandren and K
Kalyanasundaram wrote in a judgement.
As such, it can be
said that the process of e-auction sale, followed by the respondent banks, is
only a very small step taken towards adopting modern technologies in
implementing the procedures provided by law, the judges ruled.
The writ petitions
were brought up by a slew of borrowers like the Tamil Nadu Organic, Gangtori
Textiles, Yoga Nectar Ayurceuticals and DR Logistics.
The petitions were
against the State Bank of India (SBI) ,the Central Bank of India (CBI), the
Indian Bank, the Union Bank of India (UBI), other public sector banks and the
ICICI Bank.
If a borrower
defaults on 3 consecutive installments, the bank sends a notice to the borrower
and gives 60 days for borrower to reply.
Post this it auctions
out the property based on the outcome. With the advent of technology, auctions
have taken place through electronic means in the last couple of years.
Even the Ministry of
Finance wants the transactions to move to the e-auction platform. The
petitioners argued that under the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest (SARFAESI) Act, which
deals with bad loans, permits public auction but does not prescribe e-auction.
So, e-auction is illegal and there was no transparency in the process.
Low literacy levels in
rural areas will prevent people from participating in the process, according to
the petitioners. The respondents or the banks argued that e-auction was a
public auction aided by technology.
No comments:
Post a Comment