Back
A. V. SESHA SAI, SUMATHI JAGADAM
Kandi Pandu Ranga Reddy – Appellant
Versus
Union of India – Respondent
JUDGMENT :
A.V. SESHA SAI, J.
1. The present writ petition under Article 226 of the Constitution of India is filed challenging the E-auction Sale Notice, dated 27.10.2023, issued by the 1st respondent under Rule 8(6) of the Security Interest (Enforcement) Rules, 2002 (for short 'the Rules'), proposing to sell the mortgaged scheduled properties on 16.11.2023. The present writ petition is concerned only with Item Nos.2 and 3 of the impugned notification.
2. The respondent-Bank issued E-auction notice, proposing to conduct public auction for the subject properties on 12.09.2023. In the said auction, for Item Nos.2 and 3 of the notification, the petitioner herein emerged as the successful bidder and he paid 25% of the bid amount out of the total sum of Rs.1,50,32,000/- on 12.09.2023 and 13.09.2023. Vide letter, dated 13.09.2023, respondent-bank issued confirmation order and instructed the petitioner to pay the balance 75% on or before 27.09.2023. By way of representation, dated 27.09.2023, the petitioner herein requested the respondent-bank to grant extension of time by 45 days for depositing balance of 75% of bid amount. According to the petitioner, the respondents did not give any respo
The court affirmed that banks must comply with statutory requirements and not engage in arbitrary actions against successful auction bidders, protecting rights under Article 14.
The SARFAESI Act mandates strict adherence to auction payment timelines, allowing forfeiture of deposits for non-compliance.
Forfeiture of EMD under Rule 9 of SARFAESI Rules is impermissible during a binding judicial stay, as it violates natural justice and can lead to unjust enrichment.
Rule 9(5) of the SARFAESI Act mandates forfeiture of earnest money for non-payment of the balance auction price, overriding general contract law principles.
The court held that when a statute provides specific remedies, writ jurisdiction under Article 226 should not be exercised, affirming the precedence of statutory procedures over equitable remedies.
Rule 9(5) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is directory in nature, and forfeiture is justified only to compensate for the pa....
Setting aside auction sale – Mere typographical error due to inadvertence which has not caused any prejudice to borrowers, that in itself could not be considered to be ground to annul process held by....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
