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PRAKASH SHRIVASTAVA, RAJARSHI BHARADWAJ
Chief Manager, UCO Bank – Appellant
Versus
Amitava Ghosh – Respondent
JUDGMENT :
PRAKASH SHRIVASTAVA, J.
1. This intra-court appeal is at the instance of the bank (respondent in writ petition) challenge the order of the learned Single Judge dated 29th of June, 2022 whereby WPA 12168 of 2021 filed by the respondent herein (writ petitioner) has been allowed.
2. The facts in nutshell are that the respondent No. 1 is the auction purchaser in the e-auction held by the appellant bank on 8th of January, 2021 under the SARFAESI Act. Respondent no. 1 being the successful bidder had deposited Rs.6,27,500/- being 25% of the bid impugned on the day of auction and sale confirmation letter was issued on 9th of January, 2021 directing the respondent No. 1 to pay the remaining 75% of the balance amount within 15 days. The respondent No. 1 thereafter had deposited further amount. According to the petitioner, he had deposited Rs.17,88,500/- before 25th of January, 2021. On 6th of February, 2021, the bank had issued notice to the respondent No. 1 writ petitioner requesting him to deposit the balance amount of Rs.7,21,500/- within February 12, 2021. The stand of the petitioner is that on 12th of February, 2021, when he had gone to deposit the balance amount of Rs. 7,21,500
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....
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....
The SARFAESI Act mandates strict adherence to auction payment timelines, allowing forfeiture of deposits for non-compliance.
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.
Writ court declines jurisdiction over SARFAESI auction disputes with factual issues; directs to DRT under Section 17.
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 court reaffirmed that failure to pay the balance purchase price within the specified time results in automatic forfeiture of the deposit, as mandated by the applicable rules.
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