Alerts & Updates 28th Oct 2024

Bank Auction Woes: Supreme Court Upholds Rights of Auction Purchasers in the Face of Unilateral Cancellations

Authors

Mukesh Chand Senior Counsel | Mumbai

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The Supreme Court’s decision in IDBI Bank Ltd. v. Ramswaroop Daliya and Ors. addresses key issues regarding auction sales under the SARFAESI Act, 2002. The case focused on an auction purchaser’s failure to pay the balance sale consideration and the Bank’s cancellation of the sale. The Court interpreted Rule 9(4) of the Security Interest (Enforcement) Rules, 2002, highlighting that the 15-day deadline for payment is flexible and can be extended if both parties agree in writing. Importantly, the Court ruled that only a default in payment justifies the Bank’s cancellation of the auction sale.

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