Court annulled the results of the SETAM auction for the sale of the debtor's apartment due to the lack of creditor's consent
The Karlivka District Court of Poltava region considered a case filed by one of the creditors against the State Executive Service and the SE "Setam" regarding the invalidation of electronic auctions for the sale of the seized debtor's apartment. The case concerns the protection of the creditor's rights during the enforcement proceedings.
Case circumstances
Within the enforcement proceedings for the recovery of a significant debt, the state executor put the debtor's apartment up for sale through the electronic trading system. The first and repeated auctions did not take place due to the absence of participants.
Afterwards, the property was put up for a third electronic auction with the possibility of a phased reduction of the starting price. As a result of the auction, the apartment was sold to a new owner.
Positions of the plaintiff and the defendant
One of the creditors appealed to the court, believing that his rights were violated because the third auction with a price reduction mechanism was conducted without obtaining his consent as required by law.
The plaintiff insisted that, as a party to the enforcement proceedings, he had the right to be properly informed about the results of previous auctions and the further sale of the property. In his opinion, the lack of creditor's consent for conducting the third auction with a price reduction called into question the legality of the entire property sale procedure. This was reported in court.
Representatives of the State Executive Service and the auction organizer opposed the claim, believing that their actions were carried out in accordance with legislative requirements.
What the court established
After examining the case materials, the court focused on the provisions of Article 61 of the Law of Ukraine "On Enforcement Proceedings" and the Procedure for the Sale of Seized Property.
The law stipulates that the third electronic auction with the possibility of reducing the starting price for real estate can only be held with the consent of the creditor.
During the case review, the court found no evidence that such consent was obtained. At the same time, the defendants did not provide documents confirming compliance with this requirement.
The court also took into account the legal positions of the Supreme Court, according to which to declare electronic auctions invalid, it is necessary to establish not only a procedural violation but also that such violation affected the auction results and infringed on the rights of the person seeking protection.
As a result, the court concluded that the violation of the procedure for conducting the third auction without the proper consent of the creditor is significant and directly affects his rights and legitimate interests. Consequently, the court declared the electronic auction for the sale of the apartment invalid, annulled the auction protocol, and invalidated the state executor's act on conducting the electronic auction. The court denied other parts of the claim.
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