M. R. Vasumathi vs The Authorised Officer & Ors. - Even upon a cursory perusal of Rule 9 of the SARFAESI Rules that existed at the time of the impugned sale, it is clear that these provisions are neither ornamental nor directory; they are couched in mandatory terms and go to the root of the validity of the sale. A conjoint reading of the relevant sub-rules of Rule 9 underscore the mandatory character of these provisions, particularly accentuating the requirement of balance deposit under sub-rule (4), which is integral to the sanctity and credibility of the auction mechanism. Any deviation therefrom, absent legally sustainable justification, would render the process vitiated.

 SCI (2026.06.09) in M. R. Vasumathi vs The Authorised Officer  & Ors. [2026 INSC 633, CIVIL APPEAL NO. 1606 OF 2026] held that;

• Even upon a cursory perusal of Rule 9 of the SARFAESI Rules that existed at the time of the impugned sale, it is clear that these provisions are neither ornamental nor directory; they are couched in mandatory terms and go to the root of the validity of the sale. A conjoint reading of the relevant sub-rules of Rule 9 underscore the mandatory character of these provisions, particularly accentuating the requirement of balance deposit under sub-rule (4), which is integral to the sanctity and credibility of the auction mechanism. Any deviation therefrom, absent legally sustainable justification, would render the process vitiated.

• It means that first there has to be a default on part of the auction purchaser to invite cancellation of the auction and second, that the period of deposit stipulated therein is not absolute rather extendable with the agreement of the parties.

• The record unmistakably discloses that the appellant, along with the other legal heirs, had instituted multiple miscellaneous applications before the DRT, inter alia, seeking permission to redeem the property upon the deposit of the required amount and to set aside the consequences of the sale. Such steps, taken in the teeth of adverse proceedings, cannot be disregarded as inconsequential or merely procedural. On the contrary, they evince a clear manifestation of intent, although implicit, that the appellant was desirous of redeeming the property upon being accorded with an opportunity to do so.

• Even otherwise, as a logical sequitur, the contention that the guarantor or his legal heirs did not evince adequate interest in repayment does not advance the case of the secured creditor, for a process vitiated by statutory non-compliance cannot otherwise be sanctified on such considerations.

Excerpts of the Order; 

# 1. This appeal is directed against the judgment and order dated 21.09.20201 passed by the High Court of Judicature at Madras2 in Writ Petition No. 29641 of 2019. Vide the impugned judgment, the High Court of Judicature at Madras dismissed the writ petitions filed by the appellant (daughter) as well as the son of the deceased guarantor3, thereby declining to interfere with the measures adopted by the first respondent being the authorised officer of the Indian Bank4 under the Securitisation impugned judgment 1 pant rashmi dhyani Date: 2026.06.10 Reason: 2 High Court 14:20:24 IST G. Ramanujam secured creditor  and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 20025, culminating in the auction sale of the secured asset.

# 2. Appellant questions the legality of the said proceedings, particularly the auction sale held on 11.03.2010, on the ground that the statutory procedure governing such sale was not complied with.

# 3. The first respondent is the authorised officer of the secured creditor. The second respondent is the auction purchaser, being the successful bidder in the auction sale of the secured asset. The remaining respondents are the other legal heirs/representatives who were parties to the proceedings before the High Court and have been arrayed as formal parties in the present proceedings.

GENESIS

# 4. Briefly, the facts triggering this appeal are these:

a. One S. Murugesan6, sole proprietor of M/s Shiv Shankar Agencies, had availed financial assistance from the secured creditor in the year 1984. To secure the said loan, G. Ramanujam stood as guarantor and mortgaged his immovable property in favour of the secured creditor.

b. On account of the default committed by the borrower, the secured creditor instituted a suit7 before the City Civil Court, Chennai against the borrower and the guarantor, seeking recovery of the SARFAESI Act borrower  outstanding dues. On 10.09.1997, the said court passed a preliminary decree in favour of the secured creditor for a sum of Rs. 1,87,004.23 [in effect, the total sum was Rs. 1,92,400.23p (inclusive of Court Fee of Rs. 5396/-)] along with interest @ of 18% per annum.

c. G. Ramanujam expired on 26.09.2001 leaving behind his heirs including the appellant. Several attempts were thereafter made by and between the secured creditor and the heirs of G. Ramanujam for an amicable settlement, but the same did not fructify.

d. On 08.09.2009, nearly (12) twelve years after the passing of the preliminary decree, the secured creditor issued a demand notice under Section 13(2) of the SARFAESI Act to the borrower and the heirs of G. Ramanujam. Subsequently, the secured creditor issued a possession notice dated 21.12.2009 and later a sale notice dated 03.02.2010 proposing to sell the secured asset by way of public auction under the Security Interest (Enforcement Rules), 20028.

e. The secured asset was ultimately put to auction on 11.03.2010, in which the respondent 2 herein emerged as the successful bidder9 with a bid amount of Rs. 2,11,00,500/-. Admittedly, 25% of the bid amount was paid by the auction purchaser on 10.03.2010/11.03.2010, and the remaining 75% of the sale SARFAESI Rules auction purchaser  consideration was paid on 31.03.2010. The sale certificate was issued by the secured creditor on 10.04.2010.

f. The heirs of G. Ramanujam challenged the aforesaid demand notice before the Debts Recovery Tribunal, Chennai10 by applying under Section 17 of the SARFAESI Act (S.A. No. 28 of 2010). On 28.09.2010, the heirs of G. Ramanujam, including the appellant, further filed S.A. No. (Sr.No.6473 of 2010) seeking to set aside the auction sale, which was held on 11.03.2010 and confirmed in favour of the auction purchaser. During the pendency of the proceedings in S.A. (Sr. No. 6473 of 2010), the legal heirs, including the appellant herein, filed M.A.6504 of 2010 seeking permission to redeem the property; M.A.6505 of 2010 to condone the delay in filing the application No. 6473 of 2010 and M.A. 6506 of 2010 seeking interim stay.

g. On 30.12.2010, the DRT dismissed S.A. No. 28 of 2010, primarily on the ground that since the sale schedule property was already sold, the said application challenging the notice of intended sale became infructuous. It also held that the secured creditor had adhered to the procedure under the SARFAESI Act. Followingly, on the same day, the DRT dismissed SA (Sr. No. 6473/2010) along with the MAs (Sr. Nos. 6504, 6505 & 6506/2010) on the ground that section 5 of the Limitation Act, 196311 would not be applicable DRT Limitation Act  to the application under section 17 of the SARFAESI Act.

h. Appeals, being M.A. (S.A. No. 107 of 2011) and R.A. (S.A. No. 91 of 2014), were carried before the Debts Recovery Appellate Tribunal, Chennai12 challenging the dismissal of M.A. Sr. No. 6505 of 2010, filed in S.A. Sr. No. 6473 of 2010 by the appellant and her brother.

i. The DRAT first dismissed the appeal, i.e., R.A. (S.A. No. 91 of 2014) filed by the brothers of the appellant, by an order dated 16.12.2016, affirming the reason assigned by the DRT. Consequently, the DRAT also dismissed the appeal of the daughter of G. Ramanujam and other heirs, being M.A. (S.A. No. 107 of 2011).

j. Aggrieved thereby, the appellant approached the High Court in W.P. No. 29641 of 2019, and her brother (son of G. Ramanujam) filed the connected W.P. No. 27770 of 2019. The High Court vide the impugned judgment dismissed both the writ petitions holding that the secured creditor had validly exercised its powers under the SARFAESI Act and that no interference was warranted. k. Still aggrieved, the present civil appeal has been preferred by the daughter of G. Ramanujam.

SUMMARY OF THE IMPUGNED JUDGMENT

# 5. The High Court, by the common impugned judgment, dismissed W.P. DRAT  No. 29641 of 2019 and W.P. No. 27770 of 2019. At the outset, the High Court noted that the foundational facts were largely not in question. The loan transaction dated back to 1984; a preliminary decree had been passed in 1997 on the basis of a mortgage created by G. Ramanujam; and the subsequent attempts at settlement having become nugatory, recourse was eventually taken by the secured creditor under the SARFAESI Act, culminating in the sale of the secured asset in 2010. The challenge mounted by the heirs of G. Ramanujam before the High Court was essentially directed against the recovery proceedings and the consequent auction.

# 6. The High Court found the challenge to be entirely untenable in light of the conduct of the appellant and her brother, being the writ petitioners. It was observed that the writ petitioners had remained indolent for an inordinate length of time, notably on the aspect of failing to take steps to set aside the ex parte decree for approximately over 4500 (forty five hundred) days. Such a prolonged inaction, in the Court’s view, disentitled them from challenging the subsequent recovery proceedings. The writ petitioners’ attempt to assail the actions of the secured creditor, having remained in a state of inertia, was characterised by the High Court as lacking in bona fides.

# 7. On the anvil of limitation, the High Court rejected the contention that the proceedings under the SARFAESI Act were barred merely because they were initiated several years after the decree. It went on to hold  that the secured creditor continuously pursued recovery, subsuming attempts at one-time settlement, and that the statutory framework introduced concomitantly permitted recourse to the SARFAESI Act as an efficacious remedy. The delay, therefore, was held not to be fatal so as to invalidate the proceedings.

# 8. Furthermore, the High Court held that the writ petitioners had fundamentally misconstrued the nature and object of the SARFAESI Act. It was observed that the legislation was enacted to provide an expeditious mechanism for recovery of secured debts, independent of the conventional civil court process. The mere existence of a prior decree or the availability of remedies under other enactments was held not to preclude the secured creditor from invoking the provisions of the SARFAESI Act.

# 9. Apropos the alleged procedural infirmities in the auction process, the High Court underscored that both the DRT and the DRAT had returned concurrent findings affirming due compliance with the statutory requirements and that no material irregularity or illegality was evinced, which demanded interference in the exercise of writ jurisdiction. On the contrary, the High Court noted that the auction purchaser had acquired rights consequent upon the completed sale and had been subjected to protracted litigation.

# 10. The sequitur was the dismissal of the writ petitions by the High Court, on the premise that the natural circulation of public money cannot be thwarted by frivolous personal litigation.

SUBMISSIONS ON BEHALF OF VASUMATHI (APPELLANT)

# 11. Learned senior counsel, Mr. Ratnakar Dash, appearing on behalf of the appellant contended before us that after 25 (twenty five) years of the preliminary decree, the secured creditor issued notice under Section 13(2) of the SARFAESI Act to the heirs of G. Ramanujam, who passed away after the preliminary decree was passed by the Civil Court, claiming Rs. 95,42,372.52p. The same was contended to be unjustifiable. Besides this, it was also urged that the secured creditor took the decision to sell the secured asset in haste sans adherence to the provisions of law.

# 12. It was submitted by Mr. Dash that the secured creditor instead of obtaining a valuation report from its officers, played fraud by obtaining valuation report through the original borrower, namely S. Murugesan, which was argued not to be in terms of Rule 8(5) of the SARFAESI Rules mandating that the report has to be obtained by the authorised officer of the secured creditor.

# 13. Mr. Dash contended that Rule 9(3) of the SARFAESI Rules provides for the mandate of depositing the 25% of the sale price immediately on the date of sale and that in default, the property will be resold. It was asserted that the auction purchaser had failed to pay the 25%  deposit "immediately" in the prescribed mode (DD/BPO) on the date of sale, i.e., 11.03.2010. Furthermore, the balance 75% was allegedly paid beyond the mandatory 15-day period on 31.03.2010 without a written agreement for extension, rendering the sale a complete nullity. It was argued that the secured creditor had waived the delay in the payment, and that the waiver could not have been a unilateral act.

# 14. Mr. Dash further urged the Court to believe that even if the market price of the property in question was Rs. 2.11 crore, for the satisfaction of the debt of Rs. 95 lakh+ as claimed, only a portion of the property ought to have been sold and not the entire property.

# 15. Mr. Dash next assailed the reliance placed by the secured creditor on the amended definition of “debt” under Section 2(ha) of the SARFAESI Act, as introduced by Act 44 of 2016. According to him, the proceedings in question must be governed by the unamended definition, as it stood at the time of institution of the original proceedings.

# 16. In sum and substance, it was urged by Mr. Dash that the proceedings initiated under the SARFAESI Act were illegal and without jurisdiction since the claim of the secured creditor once stood adjudicated by the competent civil court vide the passing of the preliminary decree and, therefore, the secured creditor ought to have proceeded for execution of the decree. He referred to Section 36 of the SARFAESI Act, which  mandates the measures to be taken under section 13(4) thereof to be within the limitation period stipulated under the Limitation Act and prayed that the appeal be allowed.

SUBMISSIONS ON BEHALF OF THE SECURED CREDITOR (RESPONDENT 1)

# 17. Mr. Brijesh Kumar Tamber, learned counsel, appearing on behalf of the secured creditor, maintained that the definition of “debt” under the SARFAESI Act and the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, expressly includes liabilities payable under a decree and accrued interest and that the proceedings under the SARFAESI Act were initiated only after the guarantor’s legal heirs defaulted on settlement attempts between 2001 and 2003.

# 18. It was further contended that the auction was conducted transparently, with the respondent no.2 (auction purchaser) emerging as the highest bidder at Rs. 2.11 crore, well above the reserve price of Rs. 1.58 crore. Mr. Tamber urged that the bid amount was deposited within the stipulated timelines and that any minor delay in payment was within the secured creditor’s power to waive or extend under the SARFAESI Rules.

# 19. Much emphasis was laid by Mr. Tamber on concurrent upholding of the validity of the sale by the DRT, the DRAT and the High Court, finding no irregularity in the interest calculation or the auction procedure. Dismissal of the appeal was, accordingly, prayed.  ‘

SUBMISSIONS OF THE AUCTION PURCHASER (RESPONDENT 2)

# 20. Mr. Soumya Chakraborty, learned senior counsel for the auction purchaser sought protection of his rights as a bona fide purchaser, who has been kept out of the property’s full enjoyment for over a decade. It was argued that the appellant is attempting to re-agitate settled factual issues, which is impermissible.

# 21. According to Mr. Chakraborty, the payment of Rs. 2.11 crore was made in 2010 (25% on 10.03.2010/11.03.2010 and the balance on 31.03.2010). He asserted that the sale was confirmed by the Bank and the certificate issued in April 2010, making the transaction final. It was also urged that cancelling an auction sale conducted 16 (sixteen) years ago would be catastrophic, as the auction purchaser has suffered immensely in the meantime – deprived of the opportunity to develop the property, costs, and inflation as a result of the prolonged litigation, initiated by the appellant. He, thus, prayed for dismissal of the appeal.

ISSUES INVOLVED

# 22. Two broad issues arise for consideration:

• a. Whether the proceedings under the SARFAESI Act initiated in the year 2009, nearly 12 (twelve) years after the passing of the preliminary decree, stand vitiated on the ground of limitation?

• b. Whether the sale of the secured asset pursuant to the impugned proceedings stands vitiated on account of alleged non-compliance with statutory requirements and procedural irregularities?

ANALYSIS

# 23. The rival submissions of the parties and perusal of the material on record bring to the fore the controversy at hand, which may be profitably narrowed down to the legality of the auction sale conducted under the framework of the SARFAESI Act and the SARFAESI Rules.

# 24. As a prefatory note, it is observed that the validity of an auction conducted under the statutory regime is not to be tested on equitable considerations but strictly on the ground whether the mandate of the statute and the rules has been breached or not. The SARFAESI Rules being subordinate legislation, bind the secured creditor as well as the auction purchaser with equal rigour.

I. COMPLIANCE WITH RULE 9: A STATUTORY SINE QUA NON

# 25. Rule 9 of the SARFAESI Rules squarely governs the confirmation of sale and the manner of payment of the sale consideration. Sub-Rules 3, 4 and 5 of the unamended 

SARFAESI Rules13 may profitably be noticed thus:

• (3) On every sale of immovable property, the purchaser shall immediately pay a deposit of twenty-five % of the amount of the sale unamended SARFAESI Rules, as it stood at the time of the impugned sale  price, to the authorised officer conducting the sale and in default of such deposit, the property shall forthwith be sold again. 

• (4) The balance amount of purchase price payable shall be paid by the purchaser to the authorised officer on or before the fifteenth day of confirmation of sale of the immovable property or such extended period as may be agreed upon in writing between the parties. 

• (5) In default of payment within the period mentioned in sub-rule (4), the deposit shall be forfeited and the property shall be resold and the defaulting purchaser shall forfeit all claim to the property or to any part of the sum for which it may be subsequently sold. (emphasis ours)

# 26. As a sequitur to the aforementioned legal provisions, the auction purchaser is mandated to immediately deposit 25% of the sale price (inclusive of earnest money) on the date of sale; and in default of such deposit, the property shall forthwith be resold. Further, the balance of purchase price is required to be paid within the fifteenth day of confirmation of sale or within such written agreed extended time, failing which the deposit shall stand forfeited. Also, in such a case, the purchaser would forfeit all his claims either to the property or to any part of the sum for which such property may subsequently be sold.

# 27. The aforesaid legal position finds lucid expression in Sri Siddeshwara Cooperative Bank Ltd. v. Ikbal14, as follows:

• *** 

• 13.3. Sub-rule (3) lays down that on every sale of immovable property, the purchaser shall immediately make the deposit of 25% of the amount of the sale price. In default of such deposit, the property shall forthwith be sold again.

• 13.4. Sub-rule (4) provides that the balance amount of purchase price payable shall be paid by the purchaser on or before the fifteenth day of confirmation of sale of the immovable property or such extended period as may be agreed upon in writing between the parties.

• 13.5. Sub-rule (5) makes a provision that if the balance amount of purchase price is not paid as required under sub-rule (4), then the deposit shall be forfeited and the property shall be resold and the defaulting purchaser shall forfeit all claim to the property or to any part of the sum for which it may be subsequently sold. 13.6. According to sub-rule (6), on confirmation of sale by the secured creditor and if the terms of payment have been complied with, the authorised officer exercising power of sale shall issue a certificate of sale of the immovable property in favour of the purchaser in the form given in Appendix V to the 2002 Rules.

• 14. A reading of sub-rule (1) of Rule 9 makes it manifest that the provision is mandatory. The plain language of Rule 9(1) suggests this. Similarly, Rule 9(3) which provides that the purchaser shall pay a deposit of 25% of the amount of the sale price on the sale of immovable property also indicates that the said provision is mandatory in nature. As regards balance amount of purchase price, sub-rule (4) provides that the said amount shall be paid by the purchaser on or before the fifteenth day of confirmation of sale of immovable property or such extended period as may be agreed upon in writing between the parties. The period of fifteen days in Rule 9(4) is not that sacrosanct and it is extendable if there is a written agreement between the parties for such extension. What is the meaning of the expression “written agreement between the parties” in Rule 9(4)? The 2002 Rules do not prescribe any particular form for such agreement except that it must be in writing. The use of the term “written agreement” means a mutual understanding or an arrangement about relative rights and duties by the parties. For the purposes of Rule 9(4), the expression “written agreement” means nothing more than a manifestation of mutual assent in writing. The word “parties” for the purposes of Rule 9(4) we think must mean the secured creditor, borrower and auction-purchaser. ***

• 19. There is no doubt that Rule 9(1) is mandatory but this provision is definitely for the benefit of the borrower. Similarly, Rule 9(3) and Rule 9(4) are for the benefit of the secured creditor (or in any case for the benefit of the borrower). It is settled position in law that even if a provision is mandatory, it can always be waived by a party (or parties) for whose benefit such provision has been made. The provision in Rule 9(1) being for the benefit of the borrower and the provisions contained in Rule 9(3) and Rule 9(4) being for the benefit of the secured creditor (or for that matter for the benefit of the borrower), the secured creditor and the borrower can lawfully waive their right. These provisions neither expressly nor contextually indicate otherwise. Obviously, the question whether there is waiver or not depends on the facts of each case and no hard-and-fast rule can be laid down in this regard. (emphasis ours)

#  28. Even upon a cursory perusal of Rule 9 of the SARFAESI Rules that existed at the time of the impugned sale, it is clear that these provisions are neither ornamental nor directory; they are couched in mandatory terms and go to the root of the validity of the sale. A conjoint reading of the relevant sub-rules of Rule 9 underscore the mandatory character of these provisions, particularly accentuating the requirement of balance deposit under sub-rule (4), which is integral to the sanctity and credibility of the auction mechanism. Any deviation therefrom, absent legally sustainable justification, would render the process vitiated.

# 29. The factual position, as is borne out from the extant record, is not in serious dispute – i) auction sale was conducted on 11.03.2010; ii) auction purchaser was declared successful on the said date; iii) 25% of the bid amount was deposited on 10.03.2010/11.03.2010 vide a demand draft of Rs. 9,00,000/-, prepared on 10.03.2010; and iv) two further demand drafts of Rs. 6,80,000/- and Rs. 36,95,125/- were furnished on 11.03.2010.

# 30. However, the balance 75% of the bid amount was admittedly paid only on 31.03.2010. The lingering lis is as to whether this subsequent deposit satisfies Rule 9(4). The outer time limit of fifteen days expired on 26.03.2010, as reflected in the communication issued by the secured creditor dated 11.03.2010, which may be reproduced here for the convenience of reference:

• ***

• 4. Please note that you have to pay the balance sale price within 15 days of Confirmation of Sale ie., today. In case of your failure to pay as said above, the entire bid amount paid by you shall be forfeited by the Authorised Officer without any notice and the sale will be cancelled.

# 31. The payment of the remaining 75%, on 31.03.2010 is, therefore, ex facie beyond the statutory period. In view of the above, the contention of the auction purchaser that the sale stood confirmed only on 11.03.2010 is untenable.

# 32. The following passage from IDBI Bank Ltd. v. Ramswaroop Daliya15 lends credence to the proposition:

• 13. Notwithstanding the above, the provisions of sub-Rules (4) and (5) of Rule 9 of the Rules, if read together in conjunction, would reveal that it is only for the default in payment of the balance auction amount within the period mentioned that the property could be resold and that the period of 15 days stipulated therein for the deposit of the balance sale amount may be extended, as may be agreed upon in writing. It means that first there has to be a default on part of the auction purchaser to invite cancellation of the auction and second, that the period of deposit stipulated therein is not absolute rather extendable with the agreement of the parties. (emphasis ours)

# 33. Furthermore, the contention advanced on behalf of the secured creditor by its learned counsel that any deviation in the timeline of payment stood regularised by a valid exercise of power of extension or waiver is equally unbacked by any demonstrable material. Nothing is borne out of the record to demonstrate that there was any prayer for extension of time made by the auction purchaser at any time prior 2024 SCC OnLine SC 2878  to 31.03.2010 or that any written agreement extending the time was entered into by and between the secured creditor and the auction purchaser.

# 34. The aforesaid legal position leads us to the examination of the consequence of non-compliance with the statutorily ordained timeline, in the absence of any record of written agreement between the secured creditor and the auction purchaser in the present factual matrix.

II. CONSEQUENCE OF NON-COMPLIANCE

# 35. The DRT, the DRAT and the High Court appear to have proceeded on a broader premise of consideration of delay, conduct of the borrower, and the perceived equities in favour of the auction purchaser. Equally, it is true that the record bears out that no concrete steps were ultimately taken by the appellant, who is the daughter of the deceased guarantor, to liquidate the outstanding dues and that earlier attempts at settlement did not come to fruition. However, in our considered opinion, the failure to repay without being informed of an extension being granted to the auction purchaser, by itself, cannot validate proceedings that are otherwise vitiated in law.

# 36. While it is trite that the rights of an auction purchaser and the sanctity of a confirmed sale ordinarily merit due protection, such protection is by no means absolute. It must yield where the very process engendering the sale is demonstrated to be legally infirm or to be incongruous with the statutory framework. The object of proceedings  under the SARFAESI Act is not the mere culmination of a sale in a mechanical manner, but the lawful realisation of the secured asset through a process that is fair, transparent and strictly compliant with the prescribed rules. In the present case, the non-adherence to the timeline that the SARFAESI Rules contemplate constitutes a material irregularity going to the root of the matter. The mere factum that the sale stood confirmed cannot, therefore, foreclose judicial scrutiny.

# 37. It is true that there is no express or formal articulation, in so many words, by the appellant evincing her readiness and willingness to tender the stipulated amount for redemption of the secured asset. However, the matter cannot be posited in such a narrow compass. The record unmistakably discloses that the appellant, along with the other legal heirs, had instituted multiple miscellaneous applications before the DRT, inter alia, seeking permission to redeem the property upon the deposit of the required amount and to set aside the consequences of the sale. Such steps, taken in the teeth of adverse proceedings, cannot be disregarded as inconsequential or merely procedural. On the contrary, they evince a clear manifestation of intent, although implicit, that the appellant was desirous of redeeming the property upon being accorded with an opportunity to do so. Viewed in this prism, the filing of the said application must be construed as sufficient indication of the appellant’s willingness to redeem.

# 38. Even otherwise, as a logical sequitur, the contention that the guarantor or his legal heirs did not evince adequate interest in repayment does not advance the case of the secured creditor, for a process vitiated by statutory non-compliance cannot otherwise be sanctified on such considerations.

# 39. The property in question belonged to G. Ramanujam, the deceased guarantor, and upon his demise, vested in his legal heirs. Such heirs cannot be divested of their lawful interest except in accordance with a procedure that is fair, just and in strict conformity with the governing statute, i.e., the SARFAESI Act and the SARFAESI Rules. CONCLUSION

# 40. In view of the foregoing discussion, the appeal deserves to be allowed in part and is, accordingly, allowed to the extent mentioned hereafter. The impugned judgment and order passed by the High Court is set aside, as are the orders passed by the DRAT and the DRT.

# 41. Consequently, the auction sale conducted in respect of the secured asset stands quashed and set aside.

# 42. However, having regard to the fact that the auction purchaser had participated in the process and deposited the bid amount pursuant thereto, interests of equity demand suitable restitution of interests of such purchaser. Although the sale is being set aside for reasons not attributable to him, he has remained deprived of the use of the monies deposited by him for a significant length of time. Accordingly,  the auction purchaser shall be entitled to refund of the entire amount deposited by him together with interest thereon @ 7% per annum from the respective dates of deposit until payment. Such refund shall be effected by the secured creditor within a period of 6 (six) weeks from date.

# 43. At the same time, the appellant being the legal heir of G. Ramanujam would now be entitled to an opportunity to redeem the mortgage and seek restoration of the secured asset in her favour till such time a notice for a fresh auction is issued on her failure to redeem. We grant her such opportunity. Appellant shall be at liberty to approach the secured creditor within two weeks from date with a copy of this judgment to ascertain the amount due and payable. Upon payment being made within the time to be stipulated by the secured creditor (which will not be less than a month from the date intimation is given to the appellant), legal consequences will follow.

# 44. In moulding the relief, we have borne in mind the peculiar fact situation of the case. The demand notice issued under Section 13(2) of the SARFAESI Act quantified the outstanding dues at Rs.95,42,372.52p. At the same time, the appellant cannot be permitted to secure restoration of the mortgaged property without satisfying the liability which constituted the fulcrum of the measures initiated by the secured creditor. Balancing the competing equities and in order to do complete justice between the parties, we deem it  appropriate to direct that the appellant shall be entitled to redeem the mortgage and obtain restoration of the secured asset upon payment to the secured creditor of a sum of Rs.95,42,372.52p together with 5% interest per annum thereon from the date the notice under Section 13(2) of the SARFAESI Act was issued until the date of such payment by the appellant. Upon payment being made within the period stipulated by the secured creditor in terms of paragraph 44 above, the secured asset shall stand restored to the appellant free from all encumbrances arising out of the subject loan transaction.

# 45. The secured asset may, however, be put up for auction once again 8 (eight) weeks hence should the appellant fail to pay the amount determined by the secured creditor in terms of this order; and during this period, the secured creditor will obtain a fresh valuation report from a government-empanelled valuer.

# 46. The directions contained in paragraphs 43 to 46 hereinabove are issued in exercise of the jurisdiction of this Court under Article 142 of the Constitution and shall constitute a one-time measure intended to balance the equities of the parties in the peculiar facts of the present case. It is clarified that in the event of failure on the part of the appellant to avail this one-time opportunity, she will forfeit all her rights to the secured asset.

# 47. In light of the conclusion arrived at by us on the second issue qua the validity of the auction sale and the consequential reliefs flowing therefrom, it is considered superfluous to render a conclusive determination on the first issue relating to limitation. The same is, accordingly, left open.

# 48. The appeal stands disposed of on the above terms. Connected applications, if any, stand disposed of.

# 49. Parties shall bear their own costs.

# 50. Registry is directed to send this judgment and order to the email address of the learned advocate-on-record for the appellant immediately.

-----------------------------------------------------------

Delhi Development Authority vs Skipper Construction Co.(P) Ltd. & Ors. - t is plain from the above provision that, in the absence of a contract to the contrary, the buyer will have a charge on the seller's interest in the property which is the subject matter of the sale agreement insofar as the purchase money and interest on such amount are concerned,

 SCI (1999.12.17) in Delhi Development Authority vs Skipper Construction Co.(P) Ltd. & Ors. [AIR 2000 SUPREME COURT 573,  2000 (10) SCC 130,  2000 AIR SCW 113] held that;

• It is plain from the above provision that, in the absence of a contract to the contrary, the buyer will have a charge on the seller's interest in the property which is the subject matter of the sale agreement insofar as the purchase money and interest on such amount are concerned,

• As pointed out in Mulla's Commentary on Transfer of Property Act, 8th Ed. (P.411), the charge on the property under Section 55(6)(b) is enforceable not only against the seller but against all persons claiming under him.

• When the property upon which the charge is created gets converted into another form, the buyer will be entitled to proceed against the substituted security. This is a general principle of law and Section 73 of the Transfer of Property Act is only an example of the said principle.

• The same principle which is applicable to mortgages applies to cases of statutory charge under Section 55(6)(b). If immovable property is charged and is converted into another property or money, then the charge will fasten on the property or money into which the subject matter of the agreement is converted.

• The above sub-section of Section 55 also makes it clear that the buyer is entitled to interest on the amount of purchase money paid. Interest is payable from the date of payment of the purchase money to the seller till date of delivery of property to the purchaser or till the execution of the sale deed, Article 62 of the Limitation Act, 1963 ( which corresponds to Article 132 of the Limitation Act 1908) provides a period of 12 years "to enforce payment of money secured by a mortgagee or otherwise charged upon immovable property". Time runs from the date "when money becomes due". From the above Article, it is clear that the period of limitation for enforcement of the statutory charge created under Section 55(6)(b) is 12 years from the date when becomes due and not 3 years. The period remains the same even for enforcement of the charge on the substituted security.

Excerpts of the Order; 

On May 6th, 1996 this Court delivered judgment in Delhi Development Authority Vs. Skipper Construction Co.(P) Ltd. ( 1996 (4) SCC 622). Thereafter, various other issues regarding the Skipper group of Companies continued to pose serious issues of law and fact. Sometimes, it looked like a maze which could baffle lawyers and courts alike. More claims with regard to Jhandevalan property -which was the subject matter of the above case, -of persons who claimed to be purchasers of space proposed to be built at Jhandevalan came before us. In addition, claims of similar purchasers of property at Barakhamba Road and also in regard to Technology Park, came before us. In this judgment, we propose to deal with certain issues concerning the Jhandevalan property which have remained undecided or not decided finally in the earlier orders of this Court.

In order to understand how these issues arise, it is necessary to go back (A) to the long history of events set out in the above said judgment and (B) to the subsequent events. In Part (C) we shall deal with four issues which have crystallised. In the rest of this judgment Delhi Development Authority is described as DDA and Skipper Construction Company (P) Ltd is described as Skipper, for convenience.

PART A In October, 1980, Skipper became the highest bidder for purchase of a plot of land at Jhandevalan in Delhi which was advertised for sale for Rs. 9.82 crores and deposited 25% of the price. The balance was to be deposited as per the tender schedule. Skipper defaulted in spite of seven extensions during January 1981 to April 1982. When proceedings for cancellation of the bid were in the offing, Skipper moved the Court and obtained a stay order on 29.5.82 and started making representations. DDA appointed a Committee to work out a formula and pursuant to the recommendations of the Committee, Skipper was asked to enter into a revised agreement incorporating fresh terms. Skipper raised objections to these proposals from 1984 till 1987 but finally the agreement was entered into on 11.8.87. Even before permission to enter was however granted under the revised agreement, Skipper started selling the space to be built in the proposed structure and started receiving monies. Though Skipper paid the 1st instalment much beyond the time, it did not pay the second instalment but furnished Bank guarantees which were found to be defective. It however made some token payments to DDA. Subsequently, CWP.2371/1989 was filed for a direction to DDA to sanction plans/permit construction at its risk. On 19.3.90, High Court of Delhi permitted construction in accordance with sanctioned plan subject to deposit of Rs. 20 lakhs in two instalments and 1.94 crores in one month. DDA filed SLP(C) 6338/90 and 6339/90. Meanwhile, the Delhi High Court passed an order in the WP.2371/89 on 21.12.90 directing payment of Rs.8.12 crores approx. in 30 days and stopped further construction w.e.f. 9.1.91 till payment and stated that in default, the revised agreement dated 11.8.87 would stand cancelled and DDA would be entitled to re-enter the plot. Reasons for the order were given on 14.1.91, Skipper defaulted but approached this Court on 29.1.91 in SLP(C) 186/91 when this Court passed an interim order for deposit of Rs.2.5 crores in one month and Rs.2.5 crores before 8.4.91 and Skipper was expressly prohibited from inducting any person in the building and from creating any rights in favour of third parties. In spite of it, Skipper issued advertisement on 4.2.91 and on latter dates in newspapers in Delhi and invited further purchasers to purchase the space in the proposed building. Sales agreements were entered into by certain purchasers inspite of DDA's warning dated 13.2.91 published in newspapers. SLP(C) 186/91 was dismissed on 25.1.93.

DDA re-entered the plot and took physical possession on 10.2.93 along with the building thereon "free from all encumbrances" in terms of the revised agreement/licence and as provided in the orders of the Delhi High Court dated 21.12.90 and 14.1.91. It also "forfeited" the amounts paid till then by Skipper in terms of the revised agreement dated 11.8.87 and the judgment of the Delhi High Court.

It is stated in DDA Vs. Skipper Construction Co.(P) Ltd. ( 1996(4) SCC 622) that before 29.1.91 Skipper collected about Rs.14 crores from various parties to sell space in the proposed building. Even after 29.1.91, Skipper collected various amounts, about Rs.11 crores. It appears that the same space was sold to more than one person and monies were collected.

Skipper filed suit No. 770/93 against DDA seeking injunction restraining DDA from interfering with its alleged title and possession over the plot and sought a declaration that the re-entry by DDA was illegal and sought a declaration that it had validly paid all amounts due to DDA. It obtained stay of re-auction. Against the order dated 9.12.93, DDA filed SLP.21000/93. This Court issued suo motu contempt proceedings against Tejwant Singh and his wife ( Surinder Kaur), Directors of Skipper. This Court held them guilty of contempt and under Article 129 and Article 142, sentenced them to imprisonment and fine of Rs.50,000 each. Attachment orders were passed on 8.2.95 as follows:

• Accounts standing in the names of the contemners and the Directors of M/s Skipper Construction Co.(P)Ltd. and their wives, sons and unmarried daughters shall stand attached."

Later on, the sentence was deferred subject to condition of their furnishing bank guarantee for Rs.11 crores by 31.3.95 and a deposit of Rs.11 crores by 30.3.95. It was also said:

• "List of properties given by the contemners to be taken on record. The contemners will also file a list of properties held by their sons and unmarried daughters within one week from today."

The Court also said:

• "The attachment of the properties and the bank accounts shall stand raised on the contemners furnishing the bank guarantee as aforesaid."

The contemners deposited Rs. 2 crores but failed to deposit the balance and also failed to furnish Bank guarantee. They were committed to prison and they served the sentence. DDA invited fresh tenders and sold the plot with the 14th floor structure (incomplete) to M/s Banganga Investments (Videocon) for Rs.70 crores. The sale was accepted with permission of Court and the purchaser deposited the consideration with DDA and the land and structure stood transferred to the purchaser.

This Court felt concerned about the buyers to whom space was sold before 29.1.91 and later. Claims of those who purchased before 29.1.91 were estimated to amount Rs.14 crores. DDA was therefore directed to deposit Rs.16.75 crores in this Court.

This Court appointed Justice R.C.Lahoti Commission to go into the claims of purchasers before 29.1.91 and a report dated 2.2.96 was submitted by that Committee. A sum of Rs. 13.27 crores approx. was paid to about 700 persons.

This Court appointed Justice O. Chinnappa Reddy to inquire into role of DDA officers and a Report was received on 7.7.95. This Court appointed Justice Saharya Commission to inquire into conduct of Bank officials. A Report was submitted in that connection. The issues arising from the said reports would be taken up later. Another order was passed on 6.5.96 appointing Justice O. Chinnappa Reddy to go into the post 29.1.91 sales and a Report was submitted. In respect of these purchasers, the principal amount of about Rs.6.50 crores held due to them has been paid from funds lying in deposit in this Court.

The judgment of this Court in DDA Vs. Skipper Construction Co. (P)Ltd. ( 1996 (4) SCC 622) shows that DDA filed a list of properties held by Tejwant Singh, his wife, Surinder Kaur and their sons and daughters which properties, according to them, belonged to these persons. Question arose whether the various companies of which they were directors were merely 'fronts' or "devices" to defraud and defeat the claims of purchasers. Then this Court held that

• (a) the contemners could not be allowed to enjoy or retain the fruits of contempt; 

• (b) the corporate veil could be lifted and that the Court was not precluded from treating the properties as "one entity belonging to Tejwant Singh and family" 

• (c) that the concept of resulting trust laid down in Attorney General for India Vs. Amratlal Prajivandas (1994 (5) SCC 54), could be applied, 

• (d) that Article 142 could be applied, in the absence of statutory provision, and that when: "someone has acquired property by defrauding the people and if it is from that the persons defrauded should be restored to the position in which they would have been but for the said fraud, the Court can make all necessary orders."

In the judgment, this Court held ( see para 34) (1) that pre 29.1.91 purchasers had to be re-imbursed in full, "which means that they should also be paid interest at the appropriate rate". (2) Secondly, the post 29.1.91 purchasers had also to be re-imbursed "in full". (3) Ignoring the corporate veil, the property under lease to Israel Embassy at No.3, Aurangjeb Road, could be sold. (4) For that purpose it would stand attached - ( if not already attached) and the said property would be sold if Tejwant Singh and wife were not able to deposit Rs.10 crores by 6.7.96 (5) attachment of all properties was to continue including the one on properties mentioned in IA.29/96 filed by DDA. (Skipper failed to make the payment as directed above).

The above is the long list of events and orders/directions issued in DDA Vs. Skipper Construction Co.(P)Ltd. ( 1996(4) SCC 622).

PART B It will be useful to summarise the events subsequent to May 6, 1996 briefly.

On 10.2.99, this Court directed Skipper to file a list of all immovable properties held or owned by them either in their own personal names or in the names of the companies of which they were on the Board of Directors or in which they were share-holders and similarly those in the names of their sons or unmarried daughters.

On 15.3.1991, this Court referred to an earlier order passed by this Court on 8.2.95 in SLP(C) 21000/93 attaching "the bank accounts in the names of contemners and the Directors of M/s Skipper Constructions Co.(P) Ltd. and their wives, sons and unmarried daughters". This Court held that by the judgment dated 6.5.96, properties of Technology Park Ltd. also stood attached as that property was one listed in IA.29/96 and therefore, the advertisement dated 22.1.99 for sale in regard to the said property issued by Prabjot Singh, son of Tejwant Singh was in violation of orders of this Court. Contempt notices were issued to Sri Prabjot Singh and his wife Harpreet Kaur.

On 5.4.99, Ms. Harpreet Kaur appeared but not her husband, Mr. Prabjot Singh. Directions were issued to the police to take steps for production of Prabjot Singh in this Court. On the same day, it was contended by purchasers of proposed construction at Barakhamba that the monies collected from them by Skipper Towers Ltd. and Skipper Sales Pvt. Ltd. were diverted for the construction of the building at Jhandevalan which structure had gone back to DDA and then got sold to the purchaser Banganga (Videocon).

On 3.5.99, Sri R.K. Jain, learned senior counsel appeared for Sri Prabjot Singh. His client was arrested by police. Counsel took time to come forward with a scheme. Counsel for Mr. Tejwant Singh and his wife were also directed to come forward with a scheme.

By affidavit dated 6.5.99, Mr. Prabjot Singh gave a list of properties held by him, list of 'Skipper' properties held by his father Tejwant Singh and by his brother Prabhjit Singh. On 10.5.99, all these properties were attached, without prejudice to any subsisting attachment orders passed earlier. Prabjot Singh's undertaking was also recorded.

On 19.7.99, this Court observed that issues relating to the further claims of Skipper against DDA would be decided taking into account the contention of DDA that the land and structure vested in DDA "free of all encumbrances" and also the contention that these matters were already concluded and became final on 6.5.96.

On 2.8.99, learned amicus curaie filed a list of issues which by then crystalised for decision. The disputes relate to (1) claims relating to Jhandevalan property (2) 22, Barakhamba, (3) Technology Park and (4) Symphony. This Court indicated that a fresh reference would be made to another Commission regarding the various claims of purchasers which were not adjudicated by Justice R.C. Lahoti and Justice O. Chinnappa Reddy Commissions. It was pointed out that in relation to Barakhamba property, suits were filed in the Delhi High Court for specific performance and decreed and appeals were filed by both sides before the Division Bench.

ON 2.8.99, this Court passed orders that a comprehensive list of properties be prepared. Details of winding up proceedings pending against Skipper Builders (P) Ltd. in the Delhi High Court who were concerned with Symphony were also to be furnished. Notice was given to Ghaziabad Development Authority with regard to land of Technology Park Ltd.It was made clear that claims rejected on merits (i.e. otherwise than on limitation) by Justice Lahoti and Justice Chinnappa Reddy would not be re-opened. On 13.9.99, counsel were requested to prepare a final list of issues presently arising and the matters were directed to be listed for hearing on these issues.

On 28.10.99, this Court attached certain Bank Accounts of Technology Park. On 2.11.99, a further list of Bank accounts of Prabjot Singh was filed and those accounts were also attached. Mr. Prabjot Singh was directed not to enter into any real estate transactions without informing the Court. This order was passed because of serious complaints that Mr. Prabjot Singh was making sales even after attachment orders. The Banks were directed to give a list of transactions in the last 5 years. In regard to attachment of Bank accounts of Sri Tejwant Singh, this Court held that they were already attached before 6.5.96. A contention was raised by Sri M.L. Verma, learned senior counsel appearing for Mr.Tejwant Singh that the attachment of Bank accounts was not specifically confirmed in the order of this Court dated 6.5.96 and must be deemed to have been vacated. This Court held that that attachment was not vacated by the final orders dated 6.5.96. This Court called upon Shri Tejwant Singh to give a list of Bank accounts in his name, sons and unmarried daughters and directed no withdrawals be made and further directed that no real estate transactions could be undertaken without permission of the Court.

On 4.11.99, this Court heard counsel on various issues (to which reference will be made in Part C) and reserved judgment. This Court also issued notice to the Banganga Company ( Videocon) which purchased Jhandevalan land and structure from DDA. This Court proposed transfer of appeals pending in Delhi High Court to this Court in relation to Barakhamba property.

PART C Having narrated the events which took place as above, we shall now refer to some of the issues which have crystallised. We have heard the submissions of the learned Amicus Curaie Sri Joseph Vellapally and Sri Dayan Krishnan, assisting the Amicus Curaie. We have heard Sri Mukul Rohatgi, learned Additional Solicitor General and Ms. Kamini Jaiswal for DDA, Sri M.L. Verma, Senior Advocate for Skipper, Sri R.K. Jain, Senior Advocate for Mr. Prabjot Singh, Lt. Col. Jaswant Singh (in person) and various others. A question has arisen whether in respect of the structure at Jhandevalan which vested in DDA and which DDA sold to Banganga ( Videocon), DDA should be directed to deposit something more in addition to Rs.16.75 crores deposited by it. DDA says that that issue has become final by judgment dated 6.5.96 and cannot be reopened. On the other hand, it has come to light that the purchasers were not co-nominee parties to the suit by Skipper against DDA which was transferred to this Court and was registered as SLP(C) No.21000/93. For the present, we do not propose to go into this question as to whether the judgment of this Court dated 6.5.96 has become final or is not binding on those who purchased from Skipper Construction Co. on the ground of their not being parties to the above suit and Special Leave petition. However, we shall take up this question at a later point of time. Learned counsel made submissions on the following issues:

• (1) Whether the purchasers under agreements in respect of Jhandevalan property have a statutory charge in view of Section 55(6)(b) of the Transfer of Property Act -against the vendor's interest in the property? Whether such charge can be enforced against any substituted security? 

• (2) Whether the purchasers are entitled to interest under Section 55(6)(b) of the Transfer of Property Act and also in view of the observations made in the judgment of this Court dated May 6, 1996? 

• (3) Whether the period of limitation for enforcing claims by the purchasers would be 12 years under the Limitation Act?

• (4) Whether in view of the words 'subject to a contract to the contrary' used in Section 55(6)(b) of the Transfer of Property Act and in view of the term in the agreement of sale that Skipper will not be liable for interest, the purchasers cannot claim interest?

• (5) Whether the purchasers can rely on the finding of 'fraud' given by this Court in its order dated 15.1.1995 to contend that the claim for interest is sustainable because of fraud by Skipper on the purchasers? 

POINS 1 and 2: These points depend upon the effect of the provisions in Sub-clause (6) of Section 55 of the Transfer of Property Act. That Section starts with the words "In the absence of a contract to the contrary", and reads thus (insofar as it is material for our purpose):

• "Section 55 (6)(b): The buyer is entitled 

• (a) .................

• (b) unless he has improperly declined to accept delivery of the property, to a charge on the property, as against the seller and all persons claiming under him, to the extent of the seller's interest in the property, for the amount of any purchase-money property paid by the buyer in anticipation of the delivery and for interest on such amount; and, when he properly declines to accept the delivery, also for the earnest (if any) and for the costs (if any) awarded to him of a suit to compel specific performance of the contract or to obtain a decree for its rescission".

It is plain from the above provision that, in the absence of a contract to the contrary, the buyer will have a charge on the seller's interest in the property which is the subject matter of the sale agreement insofar as the purchase money and interest on such amount are concerned, unless the buyer has improperly declined to accept delivery. The charge is available against the seller and all persons claiming under him. This charge in favour of the buyer is the converse of the seller's charge under Section 55(4)(b). The buyer's charge under this Section is a statutory charge and differs from a contractual charge which a buyer may be entitled to claim under a separate contract (Chettiar Firm Vs. Chettiar) ( AIR 1941 P.C. 47). No charge is available unless the agreement is genuine. ( T.N. Hardas Vs. Babulal) ( AIR 1973 SC 1363) As pointed out in Mulla's Commentary on Transfer of Property Act, 8th Ed. (P.411), the charge on the property under Section 55(6)(b) is enforceable not only against the seller but against all persons claiming under him. Before the amending Act of 1929, the words 'with notice of payment' occurred after the words "all the persons claiming under him". These words were omitted as they allowed a transferee without notice to escape. After the Amendment of 1929, notice to the purchaser has now become irrelevant. When the property upon which the charge is created gets converted into another form, the buyer will be entitled to proceed against the substituted security. This is a general principle of law and Section 73 of the Transfer of Property Act is only an example of the said principle. The above principle has been applied to enforce mortgage on substituted securities ( see Barham Deo Prasad Vs. Tara Chand ( 1913) 41 I.A. 45 (PC) and Muniappa Vs. Subbaiah ( AIR 1917 Mad.880)). The same principle which is applicable to mortgages applies to cases of statutory charge under Section 55(6)(b). If immovable property is charged and is converted into another property or money, then the charge will fasten on the property or money into which the subject matter of the agreement is converted.

The above sub-section of Section 55 also makes it clear that the buyer is entitled to interest on the amount of purchase money paid. Interest is payable from the date of payment of the purchase money to the seller till date of delivery of property to the purchaser or till the execution of the sale deed, whichever is earlier. Points 1 and 2 are decided accordingly in favour of the buyers.

POINT 3: Article 62 of the Limitation Act, 1963 ( which corresponds to Article 132 of the Limitation Act 1908) provides a period of 12 years "to enforce payment of money secured by a mortgagee or otherwise charged upon immovable property". Time runs from the date "when money becomes due". From the above Article, it is clear that the period of limitation for enforcement of the statutory charge created under Section 55(6)(b) is 12 years from the date when becomes due and not 3 years. The period remains the same even for enforcement of the charge on the substituted security. Point 3 is decided accordingly.

POINT 4 and 5: Learned senior counsel for Skipper, Sri M.L. Verma contended that there is a stipulation in the agreement of sale that interest will not be payable to the buyer in case the transaction fails for any reason. On the other hand, Sri Dayan Krishan for the learned Amicus Curiae submitted that in view of the earlier finding of this Court relating to 'fraud' on the part of Skipper, it is not permissible for Skipper to rely on the above clause in the agreement. In our view, learned Amicus Curiae is right in his submission that in the order of this Court dated 15.1.1995, there is a clear finding of 'fraud' against Skipper. This is because, when the available units of accommodation are said to be 870 or less, Skipper had given bookings in favour of 2700 buyers and collected huge sums.

This was obviously, fraudulent. In our view, builders are not in law supposed to enter into agreements with more number of buyers than there are flats, unless each of the buyers in excess of the number of available units of accommodation is put on notice that his purchase will depend upon the availability of units of accommodation. Accepting bookings from excess number of buyers without adequate notice to them about the contingent nature of their contracts cannot be said to be fair dealing. On top of that to say that these amounts paid by the buyer will not carry interest is wholly unconscionable. In this case, Skipper entered into a large number of bookings, nearly three times the available units of accommodation and collected monies. This was fraudulent, as per the earlier finding of this Court dated 15.1.95. Skipper, therefore, cannot be allowed to rely upon the term relating to 'contract to the contrary' and escape the payment of interest. Once there is fraud, the inducement for payment by the purchasers cannot be traced to the agreement. We may also point out that in the judgment of this Court dated May 6th, 1996, this Court has already observed, that interest is payable to both pre 29.1.91 and post 29.1.91 purchasers. This Court held in regard to pre 29.1.91 purchasers as follows: ( See p. 643 of SCC) .lm15 "On one hand, the position is that the pre-29.1.1991 purchasers have to be reimbursed in full which means that they should also be paid interest at the appropriate rate on the amounts advanced by them to skipper..."

In regard to post 29.1.1991 also, it has been stated(p.644 of SCC): .lm15 "Secondly, the post 29.1.1991 purchaser, have also to be reimbursed in full."

A point was raised on behalf of DDA that inasmuch as DDA had given paper publication after 29.1.1991 warning purchasers, it must be presumed that all the members of the public were put on notice and post 29.1.91 buyers should not be allowed to claim interest. We have given due consideration to this contention. As to what extent any of these buyers had notice of the paper publication, is a matter on which it is difficult to get evidence. We are, therefore, not inclined to reconsider the decision of this Court dated May 6th, 1996 in regard to the right of the post 29.1.1991 purchasers to get interest. Points 4 and 5 are decided against Skipper.

We disposed of points 1 to 5 accordingly.

----------------------------------------------