Facts of the Case

This is a SARFAESI Act bank-auction dispute, not a GST case — GST is mentioned only as a component of the interest/charges payable by a rival bidder to complete an earlier sale. Kochar Sung-Up Acrylic Limited challenged a Sale Rejection Letter dated 22.12.2020, issued by Indian Overseas Bank, by which its bid for a property (earlier put up for re-auction after an initial buyer's default) had been rejected.

The bank explained that the property had originally been sold under the SARFAESI Act to M/s Regent Land Holdings Pvt. Ltd., whose EMD was forfeited and the plot ordered to be re-auctioned after Regent's default. Regent then filed its own writ petition (CWP No. 22114 of 2020) challenging that forfeiture and re-auction order, which was disposed of on 21.12.2020 with a direction that if Regent deposited the entire sale amount with 9% interest and GST, the bank would transfer the property to it and issue a sale certificate. Regent duly deposited the amount, the sale certificate was issued to it on 04.01.2021, and the re-auction (in which the present petitioner had participated) was consequently withdrawn, meaning there was no question of accepting the petitioner's bid.

Issues Involved

  1. Whether the bank's rejection of the petitioner's re-auction bid, after the earlier defaulting bidder was permitted to complete its purchase on payment of the full amount with interest and GST, was legally sustainable.

Petitioner's Arguments

  • The petitioner's writ sought to set aside the Sale Rejection Letter dated 22.12.2020 rejecting its bid for the property.

Respondent's Arguments

  • The bank explained that since the original bidder, Regent Land Holdings, had already been permitted by an earlier court order to complete the purchase (by depositing the amount with 9% interest and GST) and had received a sale certificate on 04.01.2021, the re-auction stood withdrawn as a natural consequence, leaving no basis to accept the petitioner's bid.

Court Order / Findings

  • On seeing that the sale certificate had already been issued to Regent Land Holdings Pvt. Ltd. pursuant to an earlier court-sanctioned arrangement, and that the re-auction had accordingly been withdrawn, the petitioner's counsel sought to withdraw the present writ petition.
  • The Court dismissed the writ petition as withdrawn.

Important Clarification

GST appears here only as part of the interest/charges the original defaulting bidder had to pay to complete its purchase under an earlier court order — this case does not decide any GST law question and should not be read as one.

Sections Involved

  • SARFAESI Act, 2002 (bank auction and sale certificate provisions)

Decision – In Favour of

Dismissed as withdrawn; no decision on the merits of the petitioner's challenge to the rejection of its bid.

Case Details

  • Court: High Court of Punjab and Haryana at Chandigarh
  • Case No.: CWP-1488-2021
  • Neutral Citation: 2023:PHHC:085300-DB
  • Coram: Hon'ble Mrs. Justice Lisa Gill and Hon'ble Mrs. Justice Ritu Tagore
  • Date of Order: July 06, 2023

Link to Download the Order

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