Action of secured creditor in forfeiting the deposit made by the auction purchaser is a part of the measures taken by the secured creditor under Section 13(4) of SARFAESI Act – Agarwal Tracom Pvt. Ltd. v. Punjab National Bank – Supreme Court
November 27, 2017
The Court held that so far as this case is concerned, sub-rule (5) of Rule 9 is relevant. It provides that, if the auction purchaser commits any default in payment of sale consideration within the time specified, the deposit made by auction purchaser shall be “forfeited” to the secured creditor and the auctioned property shall be resold and the defaulting purchaser shall “forfeit” all claims to the property or its part of the sum for which it may be sold subsequently. Reading of the aforementioned Sections and the Rules and, in particular, Section 17(2) and Rule 9(5) would clearly go to show that an action of secured creditor in forfeiting the deposit made by the auction purchaser is a part of the measures taken by the secured creditor under Section 13(4).