Overview of Property Re-sealing by Nationalized Banks in India

Re-sealing of Property by Banks: An Overview

In response to an Unstarred Question No. 3629 raised in the Lok Sabha, the Minister of State in the Ministry of Finance, Dr. Bhagwat Karad, provided insights regarding the re-sealing of properties auctioned by nationalized banks.

Can Properties Auctioned by Nationalized Banks be Re-sealed?

Legal Framework
According to the provisions outlined in the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2022, and the Recovery of Debts and Bankruptcy (RDB) Act, 1993, properties may be seized. However, it is important to note that neither act includes the specific term "re-sealing" of properties.

Recent Cases of Re-sealing in Mumbai

Disputes Among Nationalized Banks
A notable situation has arisen involving disputes between Union Bank of India and Bank of India concerning their respective rights over a secured asset. The Central Government has acknowledged this issue.

In this context, the Debt Recovery Appellate Tribunal (DRAT) in Mumbai, within Appeal Number 42 of 2019, issued an order on July 5, 2022. This order instructs the Recovery Officer of the Debts Recovery Tribunal II, Mumbai, to resolve the matter after due hearings involving both banks.

Conclusion

In summary, while the legal framework governing the auction and attachment of properties does not explicitly mention re-sealing, ongoing disputes among nationalized banks can lead to complexities requiring judicial intervention.