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2026 Supreme(Online)(DRAT) 159
IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT CHENNAI
G. Chandrasekharan, Chairperson
Mrs.R.Mythili – Appellant
Versus
State Bank of India & anr – Respondent
MA 67/2018 | MA 43/2019 | MA 18/2016 | SR No.8367/2015 | DRC No.118/2012 | OA 126/2011
For the Appellants/Petitioners: R. Kumararaja
For the Respondents: S. Pandurangan, Anuradha Balaji
Forfeiture of the earnest money deposit is justified when a successful bidder fails to pay the balance sale consideration within the stipulated time and fails to submit a written request for extension within the prescribed period as per the sale notice conditions.
Headnote:The matter involves a challenge against the order of forfeiture of the earnest money deposit (EMD) by the Recovery Officer after the successful bidder failed to pay the balance 75% of the sale consideration within the stipulated 15-day period. The appellant sought condonation of a 378-day delay in filing the appeal before the Debt Recovery Tribunal (DRT), which was dismissed. The appellant further contended that the sale notice allowed for extensions of time for payment. The primary issue was whether the Recovery Officer acted within jurisdiction in forfeiting the amount and whether the appellant was entitled to an extension of time. The court observed that while the sale notice provided for extensions, such requests must be made in writing within the 15-day window, which the appellant failed to do. The court distinguished the cited precedent regarding the Recovery Officer's powers, noting that the current sale notice explicitly provided for extensions, yet no timely request was made. this Tribunal finds no merits in these Appeals and confirms the orders passed by Learned Presiding Officer, DRT-III, Chennai and dismisses the Appeals in M.A:67/2018 and M.A:43/2019.
| Table of Content |
|---|
| 1. procedural history of the auction sale, failure to pay balance consideration, and subsequent forfeiture of emd. (Para 1 , 2 , 3 , 5 , 7 , 9) |
| 2. appellant's contention regarding the recovery officer's power to extend the payment timeline. (Para 4 , 6) |
| 3. requirement of a written request for extension of time as per the terms of the sale notice. (Para 10 , 11) |
| 4. distinction between cases where sale notices provide for extensions versus those that do not. (Para 12) |
| 5. dismissal of appeal due to unexplained delay and lack of merit on the grounds of forfeiture. (Para 13 , 14) |
Common Order
1. MA 67/2018 is filed against the order passed in MA 18/2016 in Appeal SR No.8367/2015 in OA 126/2011 by Learned Presiding Officer, DRT-III, Chennai.
MA 43/2019 is filed to set aside the order passed by Learned Presiding Officer, DRT-III, Chennai, in Appeal SR No.8367/2015 in DRC No.118/2012 in OA 126/2011.
2. MA 18/2016 was filed to condone the delay of 378 days in filing the Application challenging the order of forfeiture of Rs.34,40,987/- deposited by the Appellant. Learned Presiding Officer, on hearing Learned Counsel for Appellant and Respondents, found that the reasons stated for condoning the delay of 378 days in filing the Appeal against the order passed by Recovery Officer on 19.09.2014 is not supported by any reasons, and therefore, dismissed the Application in MA 18/2016. Consequently, the Appeal in SR No.8367/2015 was also dismissed.
3. The background on which the Recovery Officer passed the order of forfeiture on 19.09.2015 was that in the sale held on 01.09.2014, the Appellant was declared as the successful bidder. The Appellant was given 15 days from 01.09.2014 for paying the balance 75% plus 1% poundage fee plus Rs.10/-. It was made clear that failing to pay the balance amount would result in cancellation of the sale. Thereafter, at the request of the Appellant to adjust 10% of the EMD amount already deposited towards the sale consideration, the Recovery Officer passed an order on 10.09.2014, directing adjustment of 10% of EMD amount along with expenditure of Rs.9,013/- spent towards the paper publication charges, and thus, a sum of Rs.9,40,987/- was ordered to be adjusted towards 75% of the sale consideration for the sale held on 01.09.2014. Despite this concession given, the Appellant had not paid the balance sale consideration of Rs.61,59,013/- plus poundage till date. In the said circumstances, the Recovery Officer passed order of forfeiture of the amount. As already stated, against this order an Appeal was filed along with an Application to condone the delay of 378 days in filing the Appeal. On dismissal of the condone delay Application and the Appeal by Learned Presiding Officer, these Appeals are filed.
4. Learned Counsel for Appellant brought to my notice the terms and conditions of the auction sale notice dated 22.07.2014 wherein there is a clause provided that the balance sale consideration can be paid within such period as extended by the Recovery Officer. The Recovery Officer permitted the adjustment of EMD amount deposited during the earlier sale attempt. Thereafter, the Appellant filed MA 165/2014 on 28.10.2014 for staying the sale fixed on 12.11.2014 and with a prayer to receive the balance 75% of the sale price in two equal instalments on or before 01.12.2014 and 01.01.2015.
5. The Recovery Officer dismissed the MA 165/2014 on 05.11.2014. Against the said order, the Appellant filed an Appeal in Appeal No.10/2014 before DRT-III, Chennai and that was also dismissed giving liberty to all the three parties to prosecute their remedies. Thereafter, the Appellant filed an Appeal in AIR 674/2015 before this Tribunal against the order passed in Appeal No. 10/2014 and the said Appeal was dismissed for non-payment of court fee as ordered by the Tribunal.
6. He further pressed into service, the decision of Hon’ble High Court of Madras in WP No. 20225/2009 dated 12
