Under SARFAESI Act, an auction sale can be cancelled only if the purchaser has defaulted in payment of balance amount

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In IDBI Bank Ltd. v. Ramswaroop Daliya and Ors., SLP (C) Nos. 8159-8160/2023 the Supreme Court has held that an auctioneer cannot refuse to issue sale certificate if the auction purchaser has not defaulted in offering to deposit the balance auction amount.

The Court held that under Rules 9(4) and 9(5) of the Security Interest (Enforcement) Rules, 2002, there must be a default on the part of the purchaser in payment of balance auction amount to invite cancellation, and that the period of deposit (15 days) is not absolute. Rather, it is extendable with agreement of the parties.