In a recent legal case, the High Court reversed its decision on the confirmation of an auction sale, sparking debates over legal intricacies. The court’s analysis delves into the implications of the property value escalation and the Corporation’s duty in auction proceedings. Learn more about this significant ruling and its impact on similar cases.
Facts
- The Borrower filed a Writ Petition seeking waiver of penal interest and reduction in the rate of interest.
- During the proceedings, the Corporation carried out an auction where the Auction Purchaser emerged as the sole bidder.
- The High Court temporarily stayed the auction proceedings following an interim order.
- After instructions from the Industries Minister, the Corporation agreed to give another opportunity to the Borrower.
- Despite the Corporation’s offer to waive 50% of penal interest, the Borrower refused and failed to repay the loan.
- Subsequently, the Corporation took possession of the resort on 19.10.2012.
- The High Court found no merit in the Writ Petition filed by the Borrower.
- The Borrower sought extension of time for repayment of outstanding dues and waiver of penal interest in a Writ Appeal.
- The Division Bench granted time till 31.03.2009 for repayment subject to conditions.
- The Auction Purchaser challenged the High Court’s decision to set aside the auction and conduct a fresh one.
- The Auction Purchaser argued against paying interest for the period between 2013 to 2018 due to an interim court order.
Also Read: Interest Compensation Dispute in Property Demolition Case
Analysis
- The Division Bench of the High Court set aside the confirmation of sale due to the Corporation not considering the escalation of property prices from 14.06.2013 to 15.01.2018.
- No other faults were found with the auction proceedings or finalization of the sale in favor of the Auction Purchaser.
- The Borrower is not entitled to further opportunities to bring a prospective buyer for the property.
- The Auction Purchaser cannot avoid paying more than the amount offered for the property on 14.06.2013 as the property value increased during the said period.
- The Corporation failed in its duty by not accounting for the lapse of five years from the date of auction while handing over possession of the property to the Auction Purchaser.
- The sale in favor of the Auction Purchaser should not have been set aside by the Division Bench of the High Court based on the grounds provided.
- The Corporation should have considered imposing interest on the bid amount from 2013 to 2018.
Also Read: Legal Interpretation of Extension of Judicial Member’s Term
Decision
- In the present case, the judgement of the High Court setting aside the confirmation of the sale and auction proceedings in favor of the Auction Purchaser has been reversed.
- The Appeals have been disposed of accordingly.
- The Auction Purchaser is directed to pay interest at the rate of 12% per annum on Rs. 11 crores for the period from 14.06.2013 to 15.01.2018.
Also Read: Legal Analysis of Allegations of Illegal Mining
Case Title: RAJASTHAN FINANCIAL CORPORATION JAIPUR Vs. M/S JAIN BANDHU SNEH RESORTS PRIVATE LIMITED (2022 INSC 485)
Case Number: C.A. No.-003460-003460 / 2022
