TaxTMI Login
AI Drafter - (New and Powerful) ✕
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Just a moment...
AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether the auction sale was liable to be set aside on the ground of fraud, collusion, or material irregularity under the Code of Civil Procedure, 1908. (ii) Whether the successful bidder was entitled to extension of time to deposit the balance 15% of the bid amount.
Issue (i): Whether the auction sale was liable to be set aside on the ground of fraud, collusion, or material irregularity under the Code of Civil Procedure, 1908.
Analysis: The objections rested on alleged collusion among bidders, alleged participation by connected persons, alleged irregularity in the sequence of bidding, and alleged default in timely deposit. The Court found no material to show that the bidders were one and the same merely because some directors overlapped in another company. It also held that the bid-sheet did not support the asserted sequence of bids, that the sale conditions did not prohibit a bidder from making further bids, and that no prejudice to the objecting party was shown. Applying the settled rule that a sale cannot be set aside merely on proof of fraud or irregularity unless substantial injury is also established, the Court found the allegations unsubstantiated.
Conclusion: The objections to the auction sale were rejected and the sale was not set aside.
Issue (ii): Whether the successful bidder was entitled to extension of time to deposit the balance 15% of the bid amount.
Analysis: The bidder's default in depositing the amount within time was attributed to the subsisting stay order passed by the appellate court, during which the auctioneer had not accepted the amount. Once the stay stood vacated, the Court found sufficient cause to extend time and permitted immediate deposit of the amount, with the remaining sale consideration to be paid within the stipulated period under the auction terms.
Conclusion: The bidder was granted extension of time to deposit the balance 15% of the bid amount.
Final Conclusion: The challenge to the auction sale failed, while the successful bidder obtained limited relief by way of extension of time to complete the deposit obligations arising from the auction.
Ratio Decidendi: A court sale under Order XXI Rule 90 of the Code of Civil Procedure, 1908 cannot be set aside unless fraud or material irregularity is specifically proved and it is further shown that such defect caused substantial injury; separate corporate existence cannot be disregarded on conjecture alone.
TaxTMI 
