Banks Statutory Right to forfeit money under Rule 9(5) of SARFAESI Rules 2002: Central Bank of India Vs. Shanmugavelu – By Adv. Srishti Bansal
In the present case, the Hon’ble Supreme Court (Apex Court) adjudicated upon following issues:
i) whether the forfeiture of the earnest money deposit under Rule 9(5) of the SARFAESI Rules can be only to the extent of loss or damages incurred by the bank in accord with the underlying provisions of Section 73 and 74 of the Indian Contract Act 1872;
ii) whether the quantum of forfeiture under the SARFAESI rules is limited to the extent of debt owed; and
iii) whether a case of exceptionable circumstances could be said to have been made out by the respondent to set aside the order of forfeiture of the earnest money deposit?