The forfeiture of amount deposited under Rules 9(4) and 9(5) of Security Interest (Enforcement) Rules, 2002 follows irrespective of whether a subsequent sale takes place at the higher price or not, and this is not subject to any recovery already made to the extent of the debt owed – Bank of Baroda Vs. Mohammedarif Mohammedumar Qureshi and Anr. – DRAT Mumbai
Hon’ble DRAT Mumbai held that the forfeiture of the amount deposited under Rules 9(4) and 9(5) of the Security Interest (Enforcement) Rules, 2002 is a legal consequence that has been statutorily provided in the event of default in payment of the balance amount. The consequence envisaged under Rule 9(5) follows irrespective of whether a subsequent sale takes place at the higher price or not, and this forfeiture is not subject to any recovery already made to the extent of the debt owed. In such cases, no extent of equity can either substitute or dilute the statutory consequence of forfeiture of 25% deposited under Rule 9(5) of the Rules. The reasons supplied for the delay in the deposit cannot be entertained as the time fixed for payment is a statutory mandate which needs strict compliance.
