Rs 65 crore auction winner lost the property — for being 3 months late

A company bid Rs 65 crore for a property, paid the full amount — and still lost it. The reason? Three months.

On an October morning in 2023, a Supreme Court bench told M/s Sunview Assets Pvt. Ltd. that its Rs 65.62 crore payment — tendered months after every single deadline had passed — could not buy what the law had already taken away. The courtroom fell silent as Justice Bela M. Trivedi and Justice Aniruddha Bose read out the order: the law cannot be bent even for a pandemic.

The question was simple. Could the Supreme Court use its extraordinary constitutional powers to save a buyer who had paid the full auction price — but paid it late? The answer was a flat no.

When the hammer fell in Indore

November 2019. The e-auction screen flashed open on 11.11.2019 as Union Bank of India put a property in Indore on the block. The land had been mortgaged by Rajat Infrastructure Pvt. Ltd. to secure loans for two other companies — Zoom Developers and Zoom Vallabh Steel. One serious bidder emerged: M/s Sunview Assets Pvt. Ltd., which offered Rs 65.62 crores and won. The virtual hammer had fallen.

Under Rule 9(4) of the Security Interest (Enforcement) Rules, 2002 — the rule that governs how quickly an auction buyer must pay the balance amount — Sunview had to deposit the remaining purchase price within fifteen days of the sale being confirmed. The bank could extend that period, but only up to a maximum of three months. The clock started ticking.

Sunview paid roughly Rs 31 crores upfront. Then it stopped.

The first extension, and the second

By March 2020, the balance was unpaid. Sunview approached the Supreme Court, which on 20.03.2020 granted an extension until 30.04.2020. The Court was clear: no further extensions.

Then the pandemic hit. India went into lockdown. On 12.05.2020, Sunview came back. The bench — acknowledging the extraordinary circumstances — granted another extension. The company could pay within two months after the lockdown was lifted, with interest at the bank's lending rate.

That should have been the end. It was not.

Why the deadline kept slipping

Sunview filed repeated applications. The Supreme Court, showing remarkable patience, kept granting more time. The final deadline — taking into account all extensions, including those under the Court's suo motu (on its own motion) order in Writ Petition No. 3 of 2020, the landmark case that extended all limitation periods during the pandemic — was 30.04.2022.

Sunview did not pay by that date. Instead, it made staggered partial payments. By July and August 2022 — more than three months past the final deadline — the company claimed it had paid the full amount, including interest. Then it filed yet another application: this time asking the Court to direct the bank to issue the sale certificate (the legal document that transfers ownership of the property to the auction buyer).

The statutory wall

The bank refused. The law was on its side.

Rule 9(4) is brutally specific: the balance must be paid within fifteen days of sale confirmation, or within an extended period that cannot exceed three months. Rule 9(5) says that if the buyer defaults, the deposit is forfeited and the property can be resold. Rule 9(6) says the sale certificate is issued only upon "compliance of the above provisions" — meaning full and timely payment.

Sunview had not complied. Not with the rules, and not with the Court's own orders.

The company's argument was simple: we paid the full amount, with interest. What difference does a few months make?

The Court's answer: all the difference in the world.

When inherent power meets statutory command

Sunview's lawyers made a creative plea. They asked the Court to invoke Article 142 of the Constitution (the Supreme Court's inherent power to pass any order necessary for "complete justice") and Section 148 of the Code of Civil Procedure, 1908 (which allows courts to enlarge time limits). If the Court could do complete justice, why could it not simply deem the belated payment as compliant?

The bench was not persuaded. It cited a line of precedents — from Taylor v. Taylor to Supreme Court Bar Association v. Union of India to Supertech Limited v. Emerald Court Owner Resident Welfare Association — all standing for a single proposition: inherent powers cannot override express statutory provisions.

"The plenary powers of the Supreme Court under Article 142 of the Constitution, though wide in amplitude, cannot be exercised to supplant substantive statutory law applicable to the case," the Court held. Article 142, it said, cannot be used to "build a new edifice where none existed earlier by ignoring express statutory provisions dealing with a subject, thereby achieving indirectly what cannot be achieved directly."

The principle was older than the Constitution itself. When a statute requires a particular thing to be done in a particular manner, it must be done in that manner — or not at all.

The procedural trap

There was a second, equally fatal problem. Sunview had filed its application as a "miscellaneous application" in a civil appeal that had already been disposed of — meaning the main case was over. The Court held that a miscellaneous application seeking substantive relief (like a direction to issue a sale certificate) in a disposed-of appeal is simply not maintainable. The practice of filing repeated applications without legal foundation, the bench observed, "must be firmly discouraged."

The application was dismissed. The Court gave Sunview one small mercy: liberty to file a separate proceeding seeking a refund of the money it had deposited. But the property? Gone.

THE PLAY: If you buy a property at a SARFAESI auction, pay the balance within fifteen days — or within the maximum three-month extension the bank agrees to. No court will save you after that, not even the Supreme Court.

The procedural journey that led here

The case had wound through multiple forums before reaching the Supreme Court. Sunview had first approached the Debt Recovery Tribunal, Mumbai, filing a Securitization Application that sought ad interim relief — but the DRT refused. The company then moved the Bombay High Court by way of a Writ Petition on 25.11.2019, which relegated the matter to the Debt Recovery Appellate Tribunal, observing that no pre-deposit was required. A Review Petition before the High Court on 16.12.2019 was dismissed. Civil Appeals before the Supreme Court on 02.03.2020 were allowed, setting aside the High Court's orders on the pre-deposit issue.

Then came the extensions. M.A. No. 894/2020 on 20.03.2020 granted time till 30.04.2020 with no further extensions. M.A. No. 922/2020 on 12.05.2020 extended the deadline to two months after the lifting of the lockdown, with interest at the lending rate. M.A. No. 1126/2022 and related applications on 10.08.2022 were not pressed and disposed of. Finally, M.A. No. 1735/2022 — the present application — was dismissed on 04.10.2023 as not maintainable.

What the silence means

The Court left one question deliberately unanswered. It did not decide whether the bank could keep the entire Rs 65.62 crores or had to refund the amount minus forfeiture. That question, it said, would be decided in appropriate proceedings. But on the core issue — whether a late payment can be regularised by judicial fiat — the answer was unequivocal.

The pandemic stretched many deadlines. It did not erase them.

The deeper principle: why three months is a wall, not a suggestion

The ratio in Union Bank of India v. Rajat Infrastructure Pvt. Ltd. & Ors. rests on a foundation that goes far beyond auction law. The Court reaffirmed that Rule 9(4) of the Security Interest (Enforcement) Rules, 2002 — requiring balance payment within fifteen days or an extended period not exceeding three months — is mandatory. When a statute requires a particular thing to be done in a particular manner, it must be done in that manner or not at all. This principle, drawn from Rao Shiv Bahadur Singh v. State of Vindhya Pradesh and Babu Verghese v. Bar Council of Kerala, is the bedrock of statutory interpretation.

The Court also clarified the limits of its own power. Article 142 of the Constitution, which gives the Supreme Court the power to pass any order necessary for complete justice, is not a magic wand. It cannot be used to override express statutory provisions. The bench cited Supreme Court Bar Association v. Union of India and Supertech Limited v. Emerald Court Owner Resident Welfare Association to drive home the point: inherent powers cannot supplant substantive law. To do so would allow the Court to achieve indirectly what the law forbids directly — a dangerous precedent the bench refused to set.

Section 148 of the Code of Civil Procedure, 1908 — which permits courts to enlarge time limits — was similarly distinguished. Even if the Court had the power to extend time, it could not do so in a manner that would rewrite the statutory scheme of the SARFAESI Act and its Rules. The three-month outer limit under Rule 9(4) is not a guideline; it is a boundary.

The Covid-19 context: extensions with limits

The Supreme Court's suo motu order in Writ Petition (C) No. 3 of 2020 had extended limitation periods across the board during the pandemic. Sunview argued that this should cover its payment deadline as well. The Court disagreed. The suo motu order extended procedural timelines for filing cases and appeals — it did not rewrite the substantive conditions of an auction contract. The final deadline of 30.04.2022, arrived at after multiple extensions granted specifically by the Court, was the outer limit. Sunview's failure to meet it was a failure of compliance, not a victim of circumstance.

The Court's patience had been remarkable. Between M.A. No. 894/2020 on 20.03.2020 and M.A. No. 1126/2022 on 10.08.2022, Sunview had been given every possible accommodation. Yet it continued to make staggered partial payments rather than the full balance. By the time it claimed to have paid everything — with interest — in July-August 2022, the statutory and court-ordered deadlines had long expired.

The practical lesson for auction buyers

The case is a stark warning. In SARFAESI auctions, time is not elastic. The fifteen-day window under Rule 9(4) is short, and the maximum three-month extension is the absolute outer limit. Even the Supreme Court will not use its extraordinary powers to salvage a buyer who misses that window. The pandemic was an extraordinary circumstance — but even extraordinary circumstances have limits.

For banks, the judgment is a reassurance. The statutory framework protecting auction sales is robust. A buyer who fails to pay on time cannot later claim ownership by tendering the amount after the deadline. The sale certificate — the document that transfers title — is issued only upon strict compliance with the rules. Non-compliance means forfeiture and resale.

The company bid Rs 65 crore, paid the full amount, and still lost the property. The law, the Court said, cannot be bent even for a pandemic.