Secured asset auction default bars enforceable rights; sale cancellation, forfeiture, and fresh auction notice were upheld.

A highest bidder in a secured-asset auction acquires no enforceable right unless the bid conditions are fully complied with. Where the bidder failed to deposit the remaining 75% of the bid amount within the stipulated time, despite reminders and extension, the bank was entitled to cancel the sale and forfeit the deposit. The RBI circular relied on was inapplicable because it concerned borrowers, not successful bidders. As the asset remained with the secured creditor under the SARFAESI framework and no completed sale had arisen, the bank could also issue a fresh auction notice. The writ petition was dismissed and no interference was made with the auction-related actions.

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Issues: (i) Whether the communication cancelling the auction sale and forfeiting the amount deposited by the highest bidder was liable to be quashed. (ii) Whether the fresh auction notice issued in respect of the secured asset was liable to be quashed.

Issue (i): Whether the communication cancelling the auction sale and forfeiting the amount deposited by the highest bidder was liable to be quashed.

Analysis: The petitioner did not deposit the remaining 75% of the bid amount within the time stipulated in the auction notice, despite repeated reminders and extension of time during the Covid-19 period. The cancellation followed the bidder's own failure to comply with the accepted terms and conditions. The RBI circular relied upon was held to be inapplicable, as it related to borrowers and not to the successful bidder in the auction process.

Conclusion: The cancellation communication was held to be valid and was not liable to be quashed.

Issue (ii): Whether the fresh auction notice issued in respect of the secured asset was liable to be quashed.

Analysis: The property was treated as a secured asset of the bank in the account of a non-performing asset, and the bank acted as a secured creditor under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Since the petitioner had not acquired any enforceable right in the property by failing to complete payment, the bank was entitled to proceed with a fresh auction.

Conclusion: The fresh auction notice was held to be valid and was not liable to be quashed.

Final Conclusion: The writ petition failed in entirety and was dismissed, with no interference made in the bank's auction-related actions.

Ratio Decidendi: A highest bidder in a secured-asset auction acquires no enforceable right unless the bid conditions are fully complied with, and the secured creditor may cancel the sale and proceed to re-auction upon the bidder's default.

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