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of <h1>Supreme Court sets aside auction sale, orders fair compensation, and directs amicable settlement</h1> <h3>STATE BANK OF INDIA Versus AJIT JAIN & OTHERS</h3> The Supreme Court allowed the appeal by the bank, setting aside the auction sale due to inadequacy of price and prolonged litigation. The Court directed ... - Issues:- Validity of auction sale and objections raised by the decree holder- High Court's decision to set aside the objections- Appeal filed by the bank challenging the High Court's decision- Compromise settlement between parties regarding the auction saleAnalysis:The Supreme Court heard appeals by the decree holder, a statutory bank, regarding a suit for recovery filed in 1975. The property was auctioned in 1979 for a sum lower than the reserved price, leading to objections from the bank and the judgment debtor. The Executing Court initially dismissed the objections, but the High Court set aside this decision due to lack of opportunity to present evidence. The Trial Court then dismissed both objections and directed a sale certificate to be issued in favor of the auction purchasers. However, a Division Bench overturned this decision based on the auction purchasers' claim of the sale being void. The bank subsequently appealed to the Supreme Court.During the hearing in 1994, the Supreme Court noted the prolonged litigation since 1976 and the possession of the property by one of the auction purchasers. Considering the delay and in the interest of justice, the Court suggested an amicable settlement between the parties. The Court directed the parties to negotiate and report a compromise, emphasizing the need for adequate compensation for both the bank and the auction purchasers.The Supreme Court highlighted the inadequacy of the auction sale price compared to the property's value and the increased decree amount over the years. It noted that four auction purchasers had withdrawn from the auction, supporting the bank's plea for setting aside the sale. The Court invoked Article 142 of the Constitution to ensure substantial justice, directing the auction purchaser to pay a substantial amount to the bank and the judgment debtor to settle the outstanding dues.As part of the settlement, the auction purchaser was ordered to pay a significant sum to the bank and the judgment debtor within three months. Failure to comply would result in the set aside of all court orders, including the auction sale. The Court disposed of the appeals accordingly, with each party bearing its own costs.
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