Forfeiture of Earnest Money Is a Statutory Consequence If Auction Purchaser Fails to Deposit Balance on Time: Karnataka High Court

In a significant ruling under the SARFAESI Act, the Supreme Court clarified the mandatory nature of Rule 9(5), which pertains to the forfeiture of earnest money deposits in the auction process for immovable property. This decision highlights the legal framework governing debt recovery and the obligations of auction purchasers. Case Background In the case of Authorized Officer, Central Bank of India v. Shanmugavelu, the respondent, Shanmugavelu, successfully bid for immovable…