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For the purposes of regulating the measures for auctioning or selling off property in civil execution and protecting the legitimate rights and interests of the parties concerned, the present provisions are formulated in accordance with the Civil Procedure Law of the People's Republic of China as well as in combination with the practical experience of the people's courts in civil execution. Article 1. During the execution process, after the property of the person against whom a judgment or order is being executed is sealed up, distained or frozen, the people's court shall timely auction it, sell it off or take other execution measures. Article 2. When the people's court sells at current price the sealed up, distained or frozen property, auction shall be its first choice unless it is otherwise provided for in any law or judicial interpretation. Article 3. When the people's court auctions the property of the person against whom a judgment or order is being executed, it shall entrust an eligible auction institution to do it, and it shall conduct supervision over the auction conducted by the auction institution unless it is other provided for in any law or judicial interpretation. Article 4. The people's court shall entrust an eligible appraisal institution to appraise the price of the to-be-auctioned property. If the value of the property is minor or is easy to be set through a common approach, no appraisal may be required. If both parties concerned or other executing creditors apply for no appraisal, the people's court shall grant permission. If the stock right of the person against whom a judgment or order is being executed is appraised, the people's court may order the enterprise concerned to provide the accounting statements and other materials. If the enterprise concerned refuses to do so, the people's court may obtain them by coercive execution. Article 5. The appraisal institution shall be examined and determined by the people's court, after the parties concerned have agreed upon the appraisal institution. If the parties concerned fail to reach an agreement, the appraisal institution shall be randomly sorted out from the beadroll of the appraisal institutions as determined by the executing people's court or by the people's court of the place where the property of the person against whom a judgment or order is being executed is located. Where both parties concerned apply for determining an appraisal institution by public bidding, the people's court shall grant permission. Article 6. After the people's court receives the appraisal report issued by the appraisal institution, it shall, within 5 days, send it to the parties concerned and other interested parties. Where a party concerned or any other interested party objects to the appraisal report, it shall put forward its objections in writing to the people's court within 10 days after it receives the appraisal report. Where a party concerned or any other interested party applies for re-appraisal because it has evidence to prove that the appraisal institution or its appraiser is ineligible or the appraisal process is in serious violation of the law, the people's court shall grant permission. Article 7. The auction institution shall be examined and determined by the people's court, after the parties concerned have agreed upon the auction institution. If the parties concerned fail to reach an agreement, the auction institution shall be randomly sorted out from the beadroll of the auction institutions as determined by the executing people's court or by the people's court of the place where the property of the person against whom a judgment or order is being executed is located. Where both parties concerned apply for determining an auction institution by public bidding, the people's court shall grant permission. Article 8. A reserve price shall be set for an auction. The reserve price of an auction shall be determined by the people's court by reference to the appraised price. If no appraisal is made, it shall be determined by reference to the market price as well as the opinions of the parties concerned. At the first auction, the reserve price as determined by the people's court shall not be lower than the appraised price or lower than 80% of the market price. If the auction fails, when a second auction is made, the reserve price may be lowered by taking the circumstances into consideration, but the amount of decrease at each time shall not exceed 20% of the former reserve price. Article 9. After the reserve price has been set, in light of the calculation based on the reserve price of the current auction, if it is unlikely to have any surplus after deducting the priority credits and the coercive execution fees from the auction price, the execution applicant shall be notified of the relevant information prior to the auction. If the execution applicant applies for carrying on the auction within 5 days after it receives such a notice, the people's court shall grant permission, but it shall determine a new reserve price, which shall exceed the total amount of the priority credits and the coercive execution fees. If the auction as mentioned in the preceding paragraph fails, the auction expenses shall be borne by the execution applicant. Article 10. The executing personnel shall conduct necessary investigations into the ownership, occupation and use of the to-be-auctioned property. They shall make investigation transcripts about the status quo of to-be-auctioned property or gather other relevant information. Article 11. An announcement shall be issued prior to an auction. As to an auction of movable property, an announcement shall be issued not later than 7 days before the auction is held. As to an auction of immovable property or other property rights, an announcement shall be issued not later than 15 days before the auction is held. Article 12. The range and media for an auction announcement shall be determined by both parties concerned through negotiation. If no agreement is reached, a decision shall be made by the people's court. If the to-be-auctioned property falls within the range of a specialty, the announcement shall be published simultaneously through the specialized newspapers. Where a party concerned applies for publishing the announcement through other press media or requests to enlarge the range of announcement, it shall be granted with an approval, and the party concerned shall bear the advertising expenses by itself. Article 13. As to an auction of immovable property, other property rights or valuable movable property, the bidders shall pay a sum of security to the people's court prior to the auction. If the execution applicant intends to act as a bidder, it isn't required to pay the security. The amount of security shall be determined by the people's court, but it shall not be lower than the appraised price or lower than 5% of the market price. Anyone who fails to pay the security that it should have paid in advance may not act as a bidder. After the successful bidder comes out, the security paid by it in advance can offset the auction price. The security paid by other bidders in advance shall be refunded within 3 days. If the auction fails, the security paid by the bidders in advance shall be refunded within 3 days. Article 14. The people's court shall, not later than 5 days prior to the auction, inform the parties concerned, the known holders of real right for security, holders of preemptive right or other holders of preferential right to appear at the auction site on the date of auction in writing or through any other proper form that can confirm the informing. If a holder of preemptive right who has been informed of the above-mentioned matter fails to duly appear at the auction site, the holder shall be deemed as having waived the preemptive right. Article 15. Where any law or administrative regulation specially provides for the qualifications or conditions of a bidder, the bidder shall have those qualifications or conditions. The execution applicant and the person against whom a judgment or order is being executed may act as bidders. Article 16. During the course of auction, if the highest bidding is made, a holder of preemptive right may express its intention of buying at the highest price. If there is no higher bidding, the aforesaid holder of the preemptive right wins the auction. If there is a higher bidding, and the holder of preemptive right makes no intention response, then the bidder who makes the highest bidding wins the auction. When two or more holders of preemptive right of the same priority order simultaneously express the intention of buying, the winner shall be decided by drawing lots. Article 17. When several properties are auctioned, if the proceeds from the auction of some of the properties is enough to clear off the debts and to pay the expenses that shall be paid by the person against whom a judgment or order is being executed, the unfinished auction of the other properties shall not be conducted unless the person against whom a judgment or order is being executed agrees to auction them all. Article 18. If the to-be-auctioned several properties are unable to be divided in the aspect of use, or their value will be decreased if they are auctioned separately, they shall be auctioned as a whole. Article 19. During the course of an auction, if no one makes a bidding or the highest bidding is lower than the reserve price, the present execution applicant or any other executing creditor requests or agrees to accept the auctioned property at the reserve price determined for this auction, the said property shall be handed over to it to offset the debt. If two or more executing creditors request to accept the auctioned property to offset the debts, the priority shall be given to the one who gets the first statutory sequential order of getting repaid. If their sequential order of getting repaid is the same, the property shall be handed over to the creditor determined by drawing lots. If the amount of credit of the priority creditor is higher than the price of the property used for offsetting the debt, the people's court shall order the person against whom a judgment or order is being executed to supplement the inadequate amount within a time limit. Article 20. Where any of the following circumstances occurs prior to an auction, the people's court shall withdraw the auction entrustment: (1) The valid legal documents as the basis for the execution were revoked; (2) The execution applicant or other executing creditors have withdrawn the execution application; (3) The person against whom a judgment or order is being executed has paid off all the monetary debts as confirmed in the legal documents; (4) The parties concerned have reached an reconciliation agreement on execution, thus it is unnecessary to auction the property; (5) An outsider raises any reasonable objection to the auctioned property; (6) The auction institution maliciously colludes with any bidder; or (7) Other circumstances that the auction entrustment shall be withdrawn. Article 21. After the people's court completes an entrustment of auction, at the occurrence of a circumstance that the execution shall be stopped temporarily or suspended, it shall decide to stop it temporarily or suspend it and shall notify the auction institution and the parties concerned of its decision. After the auction institution receives such a notice, it shall stop the auction immediately and shall inform the bidders. After the circumstance, which the execution shall be stopped temporarily or suspended, disappears, if it is necessary to continue the auction, the people's court shall, within 15 days, notify the auction institution to resume the auction. Article 22. If the person against whom a judgment or order is being executed has put enough money in the people's court to clear off its debts prior to the auction and thus requests to stop the auction, it shall be granted an approval by the people's court, but it shall pay the essential auction expenses. Article 23. If an auction is successful, or if the property in an unsuccessful auction is used for offsetting debt, the people's court shall make a ruling and serve it on the successful bidder or priority creditor within 10 days after the full payment of price or of inadequate amount that shall be made up. Article 24. After a successful auction, the successful bidder shall make payment of price to the people's court or transfer the money into the bank account within the time limit as determined in the auction announcement or within the time limit as indicated by the people's court. Article 25. After an successful auction or after the property in an unsuccessful auction is used for offsetting the debt, if it is difficult to realize the purpose of auction or offsetting debt because the successful bidder fails to pay the auction price within the time limit, or for the reason that the priority creditor fails to make up the inadequate amount, the people's court may make a ruling on holding a new auction, in which the former successful bidder shall not participate. The inadequate amount incurred because the new auction price is lower than the former one, the loss as expenses and the commission for the former auction shall be paid by the former successful bidder. The people's court may directly deduct them from the security paid by it in advance. If there is any surplus after the deduction, it shall be returned to the former successful bidder. If the amount of security is inadequate, the people's court may order the former successful bidder to supplement the inadequate amount. If the former successful bidder refuses to do so, the people's court shall conduct coercive execution. Article 26. During the process of an auction, if no one makes a bid, or if the highest bid is lower than the reserve price, and if neither the execution applicant nor other executing creditors apply for using the reserve price of the auction for offsetting debt, a new auction shall be held within 60 days. Article 27. As to the movable property unsuccessfully auctioned in the second auction, the people's court may, under Article 19 of the present Provisions, fix its price and give it to the execution applicant or other executing creditors for offsetting debt. If the execution applicant or other executing creditors refuse to accept it, or if, in accordance with the law, the property shall not be given to the execution applicant or other executing creditors for offsetting debt, the people's court shall lift the sealing up or distrainment and shall return the movable property to the person against whom a judgment or order is being executed. Article 28. As to the immovable property or any other property right unsuccessfully auctioned in the second auction, the people's court may, under Article 19 of the present Provisions, fix its price and give it to the execution applicant or other executing creditors for offsetting debt. If the execution applicant or other executing creditors refuse to accept it, or if, in accordance with the law, the property shall not be given to the execution applicant or other executing creditors for offsetting debt, a third auction shall be held for the immovable property or any other property right within 60 days. As to the immovable property or any other property right unsuccessfully auctioned in the third auction, if the execution applicant or other executing creditors refuse to accept it, or if, in accordance with the law, the property shall not be given to the execution applicant or other executing creditors for offsetting debt, the people's court shall, within 7 days as of the close of the third auction, issue a public notice of sale. Within 60 days from the day when the public notice is issued, if no one is willing to buy the aforesaid property at the reserve price of the third auction and if neither the execution applicant nor other executing creditors accept the property to offset debt, the people's court shall lift the sealing up or distrainment and shall return the property to the person against whom a judgment or order is being executed, except when other execution measures may be taken concerning the property. Article 29. After a movable property is auctioned successfully or offsets debt, it and its ownership shall be transferred to the successful bidder or priority creditor as of the delivery of the property. After an immovable property or registered special movable property or any other property right is auctioned successfully or offsets debt, this immovable property or the ownership of the special movable property or any other property right shall be transferred as of the success of the auction or as of the delivery of the ruling on offsetting debts to the successful bidder or priority creditor. Article 30. After the people's court makes a ruling on the successful auction or using the unsuccessfully auctioned property to offset debt, it shall, within 15 days after service of the ruling, transfer the auctioned property to the successful bidder or priority creditor except the circumstances that the ruling can not be served in accordance with the law. If the person against whom a judgment or order is being executed or a third party occupies the auctioned property and refuses the transference, the people's court shall conduct a coercive execution. Article 31. If the auctioned property's original real right for security and other priorities of getting repaid disappears due to auction, the proceeds from the auction shall first be used for repaying the credits of the holders of the real right for security and other priority creditors except it is otherwise stipulated by the parties concerned. The auctioned property's original lease right and other usufructs won't disappear due to auction, but if their continuous existence in the to-be-auctioned property may affect the realization of the prior real right for security and other priorities of getting repaid, the people's court may eliminate them prior to the auction. Article 32. If an auction is successful, the auction institution may charge the buyer commission in light of the following rates: If the successful auction price is less than 2 million yuan, the rate of commission shall not exceed 5%. As to the part exceeding 2 million yuan but not more than10 million yuan, the rate shall not exceed 3%. As to the part exceeding 10 million yuan but not exceeding 50 million yuan, the rate shall not exceed 2%. As to the part exceeding 50 million yuan but not more than 100 million yuan, the rate shall not exceed 1%. As to the part exceeding 100 million yuan, the rate shall not exceed 0.5%.. Where the auction institution is determined by public bidding, the commission shall be charged in light of the amount as specified in the bid-winning plan. If an auction is unsuccessful, or if the auction entrustment is withdrawn not for reason of the auction institution, the person against whom a judgment or order is being executed shall bear the reasonable expenses that have already been paid by the auction institution for this auction. Article 33. The Provisions on Some Issues concerning Freezing or Auctioning State-owned Stocks and Social Legal Person Stocks of Listed Companies issued by the Supreme People's Court shall apply to the auction of the state-owned stocks and social legal person stocks of listed companies. Article 34. If both parties concerned and the relevant creditors agree to sell off the sealed up, distained or frozen property, such property may be sold off. The people's court may decide to sell off the gold, silver and products made thereof, movable properties with public dealing price in the local market, perishable articles, seasonal goods, and other articles which are difficult to preserve or need extremely high preservation expenses. Article 35. If there is any stipulation on the price of the to-be-sold-off property by both parties concerned and other creditors, the property shall be sold off at the stipulated price. If there is no stipulated price but there is a market price, the selling-off price shall not be lower than the market price. If there is no market price but the property is valuable or it is difficult to determine its price, an appraisal institution shall be entrusted to appraise its price and it shall be sold off at the appraised price. If it is unsuccessful to sell it off at the appraised price, it shall be sold off at a lower price, but this price shall not be lower than 1/2 of the appraised price. If no one intends to buy the property to be sold off, the property shall, under Article 19 of the present Provisions, be given to the execution applicant or other executing creditors for offsetting the debt. If the execution applicant or the other executing creditors refuse to accept the property, or if, in accordance with the law, the property shall not be given to the execution applicant or other executing creditors for offsetting debt, the people's court shall lift the sealing up or distrainment and shall return the property to the person against whom a judgment or order is being executed. Article 36. The present Provisions shall be implemented as of January 1, 2005. Where any judicial interpretation promulgated by this Court prior to the aforesaid date of implementation is contrary to the present Provisions, the present Provisions shall prevail. |
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