What Are The Legal Options For Buyers In The Case Of An Auctioned Property Fraud?

Buying a property through an auction involves selling it to the highest bidder at a public auction. The buyer must fulfil the terms and conditions of the auction and finish the transaction within the allotted time. However, in the event that an auctioned property is fraudulent, what should you do? Continue reading to find out the answer to this and learn more about the rights of Indian buyers of properties at auction.’

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Have you heard of fraud involving auctioned property? It alludes to dishonest auction sales techniques, which frequently involve lying about the worth of real estate or its ownership status. An investor from Delhi named Mr. Sanjay Kumar recently fell victim to this kind of property scam. He bought a South Delhi home at auction. Mr. Kumar learned that the property had been fraudulently sold by the previous owner before to completing the acquisition procedures. What should he do now? Continue reading the article to learn about your legal options in the event of fraud involving auctioned property.


Rights of Auction Purchasers under the SARFAESI Act

The following rights are granted to Indian auction buyers under the Securitization and Reconstruction of Financial Assets & Enforcement of Security Interest (SARFAESI) Act, 2002:

  • The option to view the property before placing a bid.
  • Right to possession and a clear title following a winning bid.
  • Right to contest anomalies in the auction process.
  • The ability to pursue redress for any improper auction behaviour.
  • Redeemable time in accordance with SARFAESI Act requirements.

In order to prevent fraud, buyers of auctioned property need to think about a few things in addition to their legal rights. They will all be covered in the section that follows.

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Points to Consider Before Purchasing Auctioned Property in India

The following items should be looked upon when purchasing Indian auction property:

  • Check the title deed to be sure there are no encumbrances on it.
  • Examine the property carefully to look for any damage or structural problems.
  • Verify the outstanding debts and obligations related to the asset.
  • Recognise the terms and conditions of the auction, including the deposit amount and the due dates for payments.
  • Find out what comparable houses in the neighbourhood are selling for.
  • To fully comprehend the ramifications and dangers of buying a property at auction, get legal counsel.
  • Think about possible difficulties like tenant eviction or disagreements with prior owners.
  • Make sure the location and facilities fit your needs and investment objectives by evaluating them.

For a variety of reasons, auctioned property fraud persists even with precautions taken. Fraudsters may falsify ownership status, alter documentation, or hide flaws in property. Furthermore, the likelihood of fraudulent acts is raised by the intricacies of the auction process and the participation of numerous parties. Now let’s examine the procedures for pursuing legal action in the event of fraudulent property auctions.

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Legal Options for auctioned property fraud

Victims of auctioned property fraud have legal remedies to pursue justice. In the event of fraudulent auction property, buyers may take the following legal actions as part of their legal remedies:

  • Speak with the concerned bank’s Grievance Redressal Officer.
  • The Debt Recovery Tribunal (DRT) is where the disgruntled buyer can submit an application for a stay.
  • Within thirty days of the property’s sale, the buyer may contest the auctioned property transaction on the basis of fraud in advertising or holding the auction.
  • Use the legal recourse that consumer protection laws provide.


In conclusion, buyers face serious risks from auctioned property fraud even with precautions taken. To reduce these hazards, vigilance, careful investigation, and legal advice are necessary. Even if victims of fraud have legal options, preventative steps like confirming property titles and doing inspections are still essential for preventing damages.



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