The main legal point established in the judgment is that a contract becomes void when it becomes impossible to perform, and the court emphasized the principle of frustration of contract due to impossibility of performance.

I.A. Ansari, J.

1. M/s. Pramila Hotel (hereinafter referred 'to as 'the borrower') had enjoyed credit facilities with the UCO Bank (hereinafter referred to as 'the respondent bank') against mortgage of their total building, situated at West Agartala. As the borrower had failed to repay its outstanding liability, the respondent bank took possession of the said hotel building as its secured assets. Having taken possession of the said hotel building in terms of the provisions of Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short, 'the Act'), the respondent bank published a notification, on 31-12-2006, informing intending bidders, in general, that the said hotel along with the plot of land, on which the said hotel building stood, would be sold by auction for the purpose of recovering the dues of the respondent bank, the date and time of the sale, so published, being 7-10-2007 at 3.00 p.m. This notification, which incorporated the terms and conditions of the auction sale, made it clear that the successful bidder would have to make a deposit of 25% (including earnest money) of the bid money, on the day of sale, in the shape of demand draft or by cash, and the balance amount of the bid money shall be deposited by the successful bidder within fifteen days or within such time as may be extended from the date of approval of the sale by the secured creditor or its authorized officer. The notification also made it clear that in case of failure to make payment of the entire bid money within the stipulated time, the deposit made by the bidder till then would be forfeited.

2. The auction sale, in terms of the said notification, took place on 7-2-2007. The present writ petitioner, which is a company registered under the Companies Act, participated in the said auction sale and, being the highest bidder, the writ petitioner, in fulfillment of the terms of the notification aforementioned, deposited a sum of Rs. 60.70 lakhs being 25% of the bid money (including the earnest money), the offered price being Rs. 2,43,11,990/-. The respondent bank, vide its letter, dated 12-2-2007, requested the petitioner to contact the main branch of the UCO Bank, at Kolkata, for making deposit of the balance amount in terms of the said notification and, thereafter, obtain Sale Certificate from the said office of the respondent bank at Kolkata. In effect, the respondent bank, vide its letter, dated 12-2-2007, duly intimated the writ petitioner that the offer, made by the petitioner, had been accepted by the respondent bank and that the balance amount be deposited accordingly.

3. Being, however, aggrieved by the process of auction sale, the borrower filed a writ petition, which gave rise to WP (C) No. 41/2007 and an interim order was passed therein, on 15-2-2007, restraining the respondent bank from taking any further steps on the basis of the notification, dated 30-12-2006. This interim direction was further extended by order, dated 21-2-2007, passed in the said writ petition. The respondent bank, then filed a miscellaneous application, which gave rise to Civil Misc. Application No. 78/2007, seeking to get the said interim direction vacated. Upon hearing, this Misc. Application was disposed, on 5-3-2007, by vacating the interim order. After the interim order was so vacated, the respondent bank, vide Its letter, dated 7-3-2007, requested the writ petition to make deposit of the balance amount of Rs. 1,82,36,999/- immediately. The writ petitioner, however, declined to make the deposit and demanded refund of the 25% of the bid money, which the writ petitioner had already deposited on 30-12-2006. As the respondent bank refused to refund the money and claimed that the amount deposited by the writ petitioner already stood forfeited in terms of the conditions stipulated in the notification aforementioned, the writ petitioner, with the help of this writ application, made under Article 226 of