Advocates appeared:
For the Appellant(s) : Mr. Dhruv Mehta, Sr. Adv. Mr. PBA Srinivasan, Adv. Mr. Keith Verghese, Adv. Mr. V. Aravind, Adv. Ms. Srishti Bansal, Adv. Mr. Sumit Swami, Adv. Mr. Amit K. Nain, AOR
For the Respondent(s): Dr. S. Muralidhar, Sr. Adv. Mr. S. Sethuraman, Adv. Ms. Aswathi M.k., AOR

What is the applicability of Sections 73 and 74 of the Indian Contract Act, 1872, to the forfeiture of earnest money deposit under Rule 9(5) of the SARFAESI Rules? What is the principle of 'reading down' a provision in the context of statutory interpretation? What constitutes unjust enrichment in the context of forfeiture of earnest money deposit under the SARFAESI Act?

Key Points: - The forfeiture of 25% of the earnest money deposit under Rule 9(5) of the SARFAESI Rules is a statutory consequence of default in payment of the balance amount, and equity cannot dilute this statutory consequence (!) (!) (!) (!) . - Damages can only be awarded for direct losses resulting from a breach of contract, not for remote or indirect losses (!) (!) . - The principle of 'reading-down' is a judicial tool used to uphold the constitutionality of a statute by giving a narrowed or restricted meaning to a provision (!) (!) . - The SARFAESI Act is a special enactment with an overriding effect, and its rules, when validly framed, become part of the statute, thus the general provisions of the Indian Contract Act, 1872 (Sections 73 and 74) do not apply to forfeiture under Rule 9(5) of the SARFAESI Rules (!) (!) (!) . - Forfeiture of earnest money under Rule 9(5) of the SARFAESI Rules is not a penalty and Section 74 of the Indian Contract Act, 1872, does not apply as it is a statutory provision for forfeiture in public auctions (!) (!) (!) . - The concept of 'unjust enrichment' is based on equity, and equity must follow the law; it cannot supplant a clear and unambiguous statutory provision (!) . - Forfeiture of 25% of the deposit under Rule 9(5) of the SARFAESI Rules does not constitute unjust enrichment as it is a statutory consequence of a public auction and not a result of private negotiation (!) (!) . - Harshness of a provision is not a reason to read down a statute if its plain meaning is unambiguous and valid; the forfeiture provision in Rule 9(5) is intended to ensure the timely resolution of bad debts and the conclusion of auction processes (!) (!) . - Exceptional circumstances, such as those caused by the COVID-19 pandemic, might warrant a refund of forfeited earnest money, but the respondent's reasons (demonetization, delay in document provision) were not considered exceptional (!) (!) (!) (!) . - The respondent willingly participated in the e-auction, aware of the reserve price and the consequences of failing to deposit the balance amount (!) .

What is the applicability of Sections 73 and 74 of the Indian Contract Act, 1872, to the forfeiture of earnest money deposit under Rule 9(5) of the SARFAESI Rules?

What is the principle of 'reading down' a provision in the context of statutory interpretation?

What constitutes unjust enrichment in the context of forfeiture of earnest money deposit under the SARFAESI Act?