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Union Bank of India vs Rajat Infrastructure Pvt. Ltd. & Ors

Civil Appeal · 2023 INSC 869Decided 4 Oct 2023
Civil Appeal No. 1902 of 2020
Aniruddha Bose · Bela M. Trivedi

Background

Union Bank of India had mortgaged property from Rajat Infrastructure securing loans to two borrower companies. When the loans went unpaid, the Bank auctioned the mortgaged property under the SARFAESI Act, and M/s Sunview Assets Pvt. Ltd. emerged as the highest bidder for Rs 65.62 crore. Litigation over the auction reached the Supreme Court multiple times, and the Court repeatedly granted Sunview extensions (citing the Covid-19 lockdown) to pay the balance sale price, with the last such order in May 2020 fixing payment within two months of the lockdown lifting, plus interest. Sunview eventually filed a fresh application asking the Court to direct the Bank to issue the sale certificate, claiming it had now paid the full amount.

Decision Breakdown

The Supreme Court found that Sunview had not actually complied with its own May 2020 order, even giving the benefit of an extended limitation period (up to February 2022 due to Covid), the balance amount with interest should have been paid by 30 April 2022, but the buyer instead trickled in payments over months without ever fully accounting for how the amounts matched the Court's directions. The Court held that Rule 9(4) of the Security Interest (Enforcement) Rules fixes a strict cap on how long payment of the balance sale price can be extended (not exceeding three months beyond the confirmation of sale), and that its own wide powers under Article 142 of the Constitution cannot be used to override this express statutory rule or effectively rewrite it. The Court also criticized the growing practice of filing repeated "miscellaneous applications" in an already-disposed appeal to reopen or work around a final judgment, calling it an abuse of process, and dismissed the application as not maintainable, while leaving Sunview free to pursue any other lawful remedy, including seeking a refund of what it had deposited.

Lesson Learnt

Statutory deadlines for paying an auction sale price (such as under the SARFAESI Rules) cannot be indefinitely stretched through repeated applications to the Supreme Court, and once a case is finally decided, parties cannot use "miscellaneous applications" as a backdoor to modify or escape compliance with the judgment.

Official source (sci.gov.in)View Judgment (PDF)

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