Supreme Court Orders Refund of Forfeited Amount in Land Auction Case
In a significant ruling, the Supreme Court of India ordered the refund of a forfeited amount in a land auction case. The judgment, delivered by Justice Ajay Rastogi and Justice Bela M. Trivedi, addressed the appeal of Mohd. Shariq against Punjab National Bank and others.
The case revolved around an auction conducted by Punjab National Bank to recover a defaulted loan. Mohd. Shariq emerged as the highest bidder but failed to deposit the full amount within the specified timeframe. Shariq claimed that he was unaware of pending proceedings at the Debt Recovery Tribunal (DRT) when he participated in the auction.
The Supreme Court, taking note of Shariq’s bona fide defense and lack of knowledge about the pending proceedings, ruled that he was entitled to a refund of the forfeited amount. The Court emphasized that there was no dispute regarding the facts of the case and found no justification for Shariq to pursue alternative remedies for the recovery.
The judgment also addressed the application of Rule 9(5) of the Security Interest (Enforcement) Rules, 2002, stating that it was not applicable in this scenario. The Court held that the failure to inform Shariq about the pending proceedings constituted a breach of duty, justifying his failure to deposit the balance amount within the stipulated time.
Supreme Court directed Punjab National Bank to return the forfeited amount within two months, along with interest at a rate of 12% per annum for any delay in payment.
Date of Decision: April 11, 2023
MOHD. SHARIQ vs PUNJAB NATIONAL BANK AND OTHERS
