Case Note & Summary
The writ petition was filed by the petitioner, a successful bidder in an e-auction sale conducted by the respondent Bank under the SARFAESI Act, seeking to quash the confirmation of sale dated 04.04.2026 and to direct the refund of 25% of the sale amount paid. The petitioner participated in the auction for a property described as a vacant site, but after the auction, the Bank altered the description to indicate a community hall reservation, which had not been disclosed earlier. The petitioner protested this change, but the Bank did not respond. The court noted that the petitioner had complied with the requirement to deposit the full sale consideration, but the sale certificate was not issued due to non-remittance of TDS. The Bank contended that the writ petition was not maintainable as the petitioner should have approached the DRT, and argued that the omission was inadvertent. However, the court found that the alteration of the property description after the auction was a significant breach of the Bank's disclosure obligations. The court emphasized that the statutory requirements for disclosure were designed to protect bidders and that the petitioner had entered the auction in good faith. The court ultimately quashed the confirmation of sale and directed the Bank to refund the entire sale consideration with interest, highlighting the moral imperative of restitution in such cases. The decision underscored the importance of accurate disclosures in property transactions under the SARFAESI Act.
Headnote
A) Property Law - Disclosure Obligations - Alteration of Property Description - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Rule 8(6), Rule 8(7)(a) - The respondent Bank altered the description of the property post-auction, failing to disclose a community hall reservation, which breached mandatory disclosure obligations. The court held that such an omission vitiated the sale and entitled the petitioner to restitution. (Paras 5-14)
Issue of Consideration
Whether the alteration of property description after auction constitutes a breach of disclosure obligations under the SARFAESI Act.
Final Decision
The writ petition was allowed, quashing the confirmation of sale dated 04.04.2026 and directing the respondent Bank to refund the entire sale consideration with interest at 9% per annum, to be computed from the respective dates of deposit until repayment, within four weeks.
Law Points
- SARFAESI Act
- 2002
- Rule 8(6)
- Rule 8(7)(a)
- disclosure obligations
- auction purchaser rights
- restitution principles
