WHAT DOES AUCTION MEAN?
A public sale in which goods or property are sold to the highest bidder, it means the part of the play in which players bid to decide the contract in which the hand shall be played.
In simple words it means, a sale in which buyers compete for an asset by placing bids.
TYPES OF AUCTIONS
Live Auction:
This type of auction is usually conducted in a meeting facility or room such as a hotel convention or indoor location meeting facility. Pictures and descriptions of the items on sale may be displayed in the ballroom when the bidding process is officially opened. This type of auction is said to be transparent because all the bidders compete openly at the same time.
Online Auction
In this type of auction, the property is put on sale on the internet. Auctions done on the internet have specific timelines (opening and closing dates), and sometimes with fixed bid increments. Bidders enter their bids against other competing bidders on the internet for the same item.
Sealed bid auction
This type of auction is used where confidential bids are preferred. If the seller is considering optional terms of sale, sealed auctions are usually chosen. Also, when there is more than just one item or service in the same auction, the auctioneer may choose to use sealed auctions so that each bidder can determine the best combinations that meet their own needs.
RECOVERY
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (Sarfaesi) 2002 empowers banks and financial institutions to auction mortgaged residential/commercial property when borrowers fail to repay their loans. The Act, which was enacted when the economy (including banking) was booming, has been rarely used to recover smaller dues; it can be applied to any loans/dues over Rs 1 lakh.
It permits the banks to auction the borrower’s properties when there is a failure on the part of the borrower to repay the loan amount. Thus, the SARFAESI Act, 2002 empowers the bank to decrease their non-performing assets by way of measures of reconstruction and recovery.
MODE OF RECOVERY
It can be done by either proper management of the borrower’s business, or by taking over its business or by making the sale of a part or whole of the business or by the rescheduling of payment of debts that is payable by the borrower according to the provisions of this Act.
