Public Auction - The Legal Chamber

Supreme Court Sets Aside Mining Tender: “Previous Year” Means Year Before Bid

21Jan

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Supreme Court

Supreme Court Sets Aside Mining Tender: “Previous Year” Means Year Before Bid

The Supreme Court emphasized that judicial review in tender matters ensures fairness and non-arbitrariness under Article 14. It held that misinterpretation of a tender condition, which wrongly excludes the highest bidder and deprives the state of revenue, vitiates the decision-making process. The court underscored the state's duty to maximize public value in natural resource auctions. Facts Of The Case: The case involved a public auction for a five-year sand quarry lease in Odisha. The appellant, M/s Shanti Construction Pvt. Ltd., was the highest bidder but its bid was rejected by the Tender Committee for allegedly failing to comply with Rule 27(4)(iv) of the Odisha Minor Mineral Concession Rules, 2016. The rule required submission of an Income Tax Return for the "previous Financial Year...

Supreme Court Rules: Bank’s Illegal Mortgage Voids Multi-Crore Property Auction

The Supreme Court quashed the e-auction sale as the proclamation violated Rule 53 of the Income Tax Act's Second Schedule, applicable via the RDDB Act. It failed to disclose material encumbrances, specifically DDA's claim for unearned increase. The Court held the sale was void, applying principles of restitution to refund the auction purchaser with interest. Facts Of The Case: The Delhi Development Authority (DDA) allotted a plot to Sarita Vihar Club on a leasehold basis. The club mortgaged the plot to Corporation Bank without obtaining the mandatory prior written consent from the Lieutenant Governor, as required by the lease deed. When the club defaulted on its loan, the Bank initiated recovery proceedings. The Debt Recovery Tribunal (DRT) ordered the sale of the plot. Despite DDA's obj...

No Redemption After Auction Notice: Supreme Court Major Ruling on Bank Loan Recovery

This Supreme Court judgment clarifies that the right of redemption of a mortgagor under Section 13(8) of the SARFAESI Act is extinguished upon the publication of the notice of sale, as per the 2016 amendment. The Court held that this amended provision is retrospective in operation and overrides the general right of redemption under the Transfer of Property Act, 1882. The ruling emphasizes that only a single composite notice of sale is required under the SARFAESI Rules, irrespective of the mode of transfer adopted by the secured creditor. Facts Of The Case: The borrowers, M/s KPK Oils and Proteins India Pvt. Ltd. and its guarantors, availed credit facilities from the respondent Bank in January 2016, creating an equitable mortgage over various properties. After the loan account was classif...