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of <h1>Indian Supreme Court Affirms Earnest Money Forfeiture Under SARFAESI Rule 9(5), Limits Judicial Intervention in Debt Recovery.</h1> The Supreme Court of India upheld the forfeiture of an earnest-money deposit under Rule 9(5) of the SARFAESI Rules, rejecting the applicability of Sections 73 and 74 of the Indian Contract Act, 1872, which pertain to compensation for breach of contract. The court ruled that the forfeiture is a legal consequence of the auction terms, not subject to unjust enrichment claims, even if the secured creditor recovers dues from a subsequent sale. It emphasized that only exceptional circumstances, like those in a previous COVID-19-related case, might justify refunding deposits. The decision underscores minimal judicial intervention in SARFAESI-related forfeitures to ensure efficient debt recovery.
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