A bidder in an auction sale under the SARFAESI Act is bound by the terms of the auction notice, and failure to comply with those terms, such as failing to deposit the required amount within the stipulated time, may result in forfeiture of the earnest money deposit.

Joymalya Bagchi, J.

1. The writ petition has been filed by an unsuccessful bidder in an auction sale conducted by the respondent bank under the provisions of the SARFAESI Act. Pursuant to taking physical possession of the secured assets, the bank issued a public notice for sale of secured assets on "As is what is basis" and "Whatever there is basis". The petitioner deposited earnest money and participated in the said auction and after being declared the higher bidder, was called upon to deposit 25% of the sale amount in terms of the Clause 10 of the aforesaid public notice. The petitioner failed and neglected to do so and accordingly the respondent bank forfeited the earnest amount. Such action of the respondent bank has been challenged in this writ petition.

2. It is the contention of the writ petitioner that the petitioner did not deposit the earnest amount inasmuch as the bank was unable to furnish relevant documents relating to the secured assets which was put on sale.

3. Learned counsel appearing for the petitioner draws my attention to annexure "P-3" of the writ petition wherein the petitioner has sought for the following documents relating to the property namely, i) Municipal sanctioned building plan, ii) B.L. & L.R.O. Tax receipt and iii) Parcha which the bank failed to provide. It was also argued that it was the duty of the bank to satisfy the intending purchaser as to the title of the property notwithstanding the notice which referred to sale being "as is where is basis".

4. Reliance has been placed on Haryana Financial Corporation and another v. Rajesh Gupta reported in (2010) 1 SCC 655 and Mathew Varghese v. M. Amritha Kumar reported in (2014) 5 SCC 610, particularly paras 32 and 33 in support of such contention.

5. Learned counsel appearing for the petitioner resisted such prayer on the premise that the petitioner was fully aware as to the status of the property and thereafter entered into the bidding process. He further submitted that the documents were otherwise available to the intending purchaser and the said plea was only raised as a bogey when he failed to make the requisite deposit within the stipulated time frame notwithstanding repeated notices issued to him in that regard.

6. I have considered the submissions of the parties and the materials on record.

Clause 10 of the aforesaid sale notice reads as follows:

"(10) The purchase shall deposit 25% of the amount of sale price after adjusting the Earnest Money Deposit immediately after confirmation of sale by the Authorised Officer, failing which the earnest money deposit shall be forfeited. The highest bidder shall be declared to be the purchaser of the property mentioned herein provided always he is legally qualified to bid."

7. The aforesaid clause makes it amply clear that if the purchaser fails to deposit 25% of the sale price after adjusting the earnest deposit immediately after confirmation of sale, the earnest money shall stand forfeited. The petitioner participated in the auction being aware of the aforesaid clause. The petitioner had failed to deposit 25% of sale price within the time stipulated in spite of repeated notices given by the respondent bank vide letters dated 29.09.2014 and 20.10.2014. As a consequence, the bank forfeited his earnest deposit in terms of the aforesaid clause.

8. The contention of the petitioner that he declined to make further payments in the absence of the bank providing copy of the municipal sanctioned plan, tax receipt and record of rights relating to the property does not appear to be convincing inasmuch as it appears from record that earlier tax receipts relating to the property had been made available to him. That apart, the aforesaid documents could have been procured by exercise of ordinary diligence. Hence, I do not find much force in the submission of the learned counsel for the petitioner that failure of the bank to supply the aforesaid documents could have cast doubt in the mind of a reasonable person of ordin