Delhi High Court seeks bank reply on plea against earnest money forfeiture

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New Delhi | Published: August 14, 2017 4:26:53 PM

The Delhi High Court has sought a state-run bank's response on a plea against its decision to forfeit earnest money of Rs 23.85 lakh deposited by a bidder for buying a property in Haryana, which was put up for auction.

forfeit earnest money, Delhi High Court, illegal forfeiture, state bank forfeit earnest money, bank refund plea, property buyer, earnest money, e-auction of the property, gurugramThe Delhi High Court has sought a state-run bank’s response on a plea against its decision to forfeit earnest money of Rs 23.85 lakh deposited by a bidder for buying a property in Haryana, which was put up for auction. (Reuters)

The Delhi High Court has sought a state-run bank’s response on a plea against its decision to forfeit earnest money of Rs 23.85 lakh deposited by a bidder for buying a property in Haryana, which was put up for auction. Justice Indermeet Kaur directed the bank to indicate its stand on affidavit, regarding the bidder’s petition seeking refund of the money deposited by him. 66-year-old Haryana resident, Krishan Chander Gulia, has submitted in his plea that he took part in the e-auction of the property at Gurugram in Haryana on June 14 this year and was declared the highest bidder. He also submitted that he had deposited the earnest money in accordance with the terms of the auction. Advocate Pankaj Gupta, representing the petitioner, told the court that his client had written to the bank to allow him inspect the documents of the property but the request was not granted.

“The illegal forfeiture of his Rs 23.85 lakh, the earnest money, is liable to be set aside,” the counsel said, adding that this was 10 per cent of the total bid amount of over Rs 2.3 crore. Advocate Kush Sharma, appearing for the bank, opposed the petition and said it was “not maintainable” and that Gulia was allowed to inspect the records of the property. The lawyer, on being asked by the court whether the bank has any record in this regard, said it did not have the complete records. Sharma said he will take instruction on this aspect and produce the record relating to this case on the next date of hearing on September 12.

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The bank informed the court that there was an instruction from the buyer to stop payment on the 25 per cent amount which had to be deposited against the auction bid. “Only 10 per cent of the amount has been deposited which was the earnest money. For the balance, there was instruction to the bank to stop payment,” the bank’s lawyer said. Gupta, who was assisted by advocate Milind Garg, said their client was still willing to pay the balance amount and buy the property as he was the successful bidder in the e- auction. He has sought quashing of the forfeiture letter issued by the bank.

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