A person aggrieved by an auction, must oppose it in time. Delay in challenging an auction is fatal to complainant.

An auction can result in interests of a number of persons being effected. They could be unsuccessful bidders, the secured creditors, occupiers of the property, employees, other claimants, and, last but not the least owners of the properties. A person aggrieved by an auction must oppose it at the earliest possible instant. Challenging an auction after considerable delay would only be an after thought and would lead to multiplicity of litigations as by that time third party interests might have been created.

A some what similar situation came up before the Mumbai High Court (Goa Bench).

The public auction of a property was conducted on 14.3.2003 and a sale certificate was issued on 19.4.2003 to the successful bidder. The owner of the property filed an appeal before the Registrar of cooperative societies seeking to annul the auction. As the appeal was not maintainable the same was rejected. In the mean while the property was further sold to another person.

The owner filed a petition before the High Court on 17.6.2006 seeking to annual the auction.

It was seen that the representative of the petitioner was present at the time of auction but did not raise any objection to the auction sale. Further, the petitioners wrote letters to the Administrator without making any complaint on the auction but seeking settlement of the dues under the One Time Settlement (OTS) Scheme, and payment of balance of amount to them.

It was also seen that the Rules provide a detailed procedure for challenging the auction, but instead of adopting that procedure, the petitioners preferred an appeal to the Registrar, which was not maintainable. Inference deduced was that the petitioners wanted to avoid payment of amounts had they followed the prescribed procedures. However, even in this appeal the auction procedure was not disputed. Settlement of dues under the OTS scheme was sought.

The court observed that there was extreme delay on the part of the owners in challenging the auction procedures. Even third party rights have since been created and it would not be possible to disturb the settled events and thus dismissed the appeal.

[Read full text of the hon’ble Mumbai High Court (Goa Bench) judgment M/s. Tarcar Real Estate Pvt. Ltd. V/s The Mapusa Urban Co-op. Bank of Goa Ltd. & Ors.]