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K. V. ARAVIND
Santhosh Kumar B. S. – Appellant
Versus
Uco Bank – Respondent
ORDER
K.V. Aravind, J.
This petition seeking mandamus to the respondent to refund a sum of Rs.24,00,000/- forfeited vide Annexure-E dated 14.10.2020.
2. Brief facts:
The respondent-Bank conducted e-auction for sale of immovable property bearing No.34, New PID No.012-W0934-22 situated at Shettyahalli Village, Yashwanthpura Hobli, Bangalore North Taluk, Bengaluru. The auction was conducted on 08.09.2020. The petitioner participated in e-auction and was successful bidder purchasing the subject property for a sum of Rs.55,75,000/-. The petitioner deposited 25% of the bid amount Rs.14,00,000/- including the earnest money of Rs.5,50,000/- within the stipulated time. The balance amount of Rs.41,75,000/- was to be deposited within fifteen days from the date of e-auction, which is 22.09.2020. The petitioner has paid further sum of Rs.10,00,000/- from 19.10.2020 to 27.10.2020. The respondent issued sale intimation letter dated 08.09.2020. By letter dated 09.09.2020, the respondent intimated the petitioner to pay balance amount of Rs.41,75,000/- within fifteen days from 22.09.2020.
3. It is the case of the petitioner that after the payment of 25%, the respondent was requested to provide copies of
A bank's misrepresentation of property details in an auction can invalidate the sale, and forfeiture of the deposit is unjustified if the sale is characterized by a lack of fair disclosure.
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.
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.
The excess amount paid by the petitioner, beyond 25% of the bid amount, could not be considered as a deposit under Rule 9, and any retention of amount by the respondent without authority of law would....
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 extension of the time limit for depositing the remaining sale amount and the forfeiture of the deposit are governed by the agreement between the purchaser and the secured creditor, and judicial r....
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