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Issues: Whether the period for payment of the balance 75% of the auction price under Rule 9 of the Security Interest (Enforcement) Rules, 2002 runs from the date of auction or from the date of confirmation of sale by the secured creditor.
Analysis: Rule 9(2) contemplates confirmation of sale in favour of the highest bidder, subject to confirmation by the secured creditor. Rule 9(3) requires immediate deposit of 25% of the sale price on the day of sale, while Rule 9(4) fixes the balance payment as payable on or before the fifteenth day of confirmation of sale. Reading Rules 9(4) and 9(5) together, forfeiture can follow only on default after confirmation. Rule 9(6) likewise links issuance of the sale certificate to confirmation of sale and compliance with the terms of payment. The scheme of the rules therefore supports reckoning the fifteen-day period from the date of confirmation of sale, not from the auction date.
Conclusion: The balance amount was payable within fifteen days from confirmation of sale, and the auction purchaser having complied with that requirement, the sale could not be set aside.
Ratio Decidendi: Under Rule 9 of the Security Interest (Enforcement) Rules, 2002, the statutory period for payment of the balance purchase price begins on confirmation of sale by the secured creditor, and forfeiture can arise only on default after such confirmation.
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