SC on Validity of Forfeiture of EMD After Default in Auction Balance Payment in stipulated period

Comments on the post of Hammurabi & Solomon Partners and the Judgment dated    of the Supreme Court in Civil Appeal No.13025 of 2025 of M/s ASJ Finsolutions Pvt Ltd  Vs.  Vikram Bajaj

The auction was conducted on 15.11.2021 and within 30 days i.e. by 14.12.2021 the balance was to be paid.  The appellant had given EMD.

There was also a provision to remit the balance within 90 days from the date of auction i.e. on or before 14.2.2022.

On 15.12.2021, the appellant sent email to the RP that it will pay the balance of Rs.19.17 crores within 14.2.2022 with interest at 12# per annum.

However, on 11.2.2022, the appellant filed application before the NCLT and sought prior deeds of the property.  This application was rejected on 31.3.2023.  The appeal was dismissed on 21.4.2023.

The appellant filed writ petition in the High Court.

In the meanwhile, fresh auction was held and the property was sold at Rs.31.10 crores i.e. Rs.5.54 in excess of the bid of the appellant.

The appellant again initiated proceedings against forfeiture of the EMD and its refund.  The NCLT allowed but it was reve In fact, the assertion made, specifically by an e-mail communication, also emphasized by the NCLAT, was long prior to the expiry of the 90 days, at which point, the appellant was aware of the cloud over the sale deeds. There was no query made as to the verification of sale deeds any time during the bid process which, in any event, was not possible at a later point of time, that too, just prior to the date of full depositrsed by the NCLAT.