Tag Archives: Auction

No Right Accrues – To Highest Bidder

In Laxmikant v. Satyawan, (1996) 4 SCC 208, it was held as under:
“The person making the highest bid shall have no right to take back his bid. The decision of the Chairman of the Board of Trustees regarding acceptance or rejection of the bid shall be binding on the said person. The acceptance of the highest bid shall depend on the Board of Trustees. The trust shall reserve to itself the right to reject the highest or any bid.”
In State of U.P. v. Vijay Bahadur Singh, (1982) 2 SCC 365 it was laid down that there is no obligation to accept the highest bid. The Government is entitled even to change its policy from time to time according to the demands of the time.
Thus, it is apparent and explicit that even if the public auction had been completed and the respondent was the highest bidder, no right had accrued to him till the confirmation letter had been issued to him. HUDA v. Orchid Infrastructure Developers (P) Ltd., (2017) 4 SCC 243.

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Securitisation Act – Deposit under Section 18

Though no principle of law has been laid by the Hon’ble Supreme Court in the Judgment of Persn Medicinal Plants Pvt. Ltd. v. Indian Bank, decided on 25.02.2011 but it clearly indicates that in a given situation where an amount more than the amount due from the borrower/guarantor had already been realized by auction sale, which stands confirmed and the possession of the property also had been handed over to the Bank which is utilizing the same or is utilizing the property having purchased the same in the said auction, insistence on the deposit referred to under proviso to Section 18 would be contrary to the legislative intent as also the express provision as is evident from the use of the words “50% of the amount of debt due from him”.
A similar view has been taken by a Division Bench of the Punjab and Haryana High Court in similar fact situation in the case of S.R. Forging Ltd. v. UCO Bank and another, 2013 (1) DRTC 734, which reads as under:
“At this stage, we find that out of total due amount of Rs. 18.24 crores, Rs. 17.75 crores have been received by the bank in a public auction. Therefore, the deposit of 50% of the amount due prior to sale from the petitioner would be wholly unjustified. The proviso to section 18 of the Act restricts the entertainment of the appeal unless the borrower deposits 50% of the amount of the debt claimed by the Secured Creditors. Once Rs. 17.75 crores have been received by the secured creditors, that is more than 50% of the debt due from the petitioners, the purpose of the proviso stands satisfied”. Akash Ganga Airlines Ltd. v. DRAT, 2015 (5) AWC 5186.

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Filed under Debt Recovery Law, Deposit under Section 18 of Securitisation Act