{"id":378554,"date":"2026-03-17T09:00:44","date_gmt":"2026-03-17T03:30:44","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=378554"},"modified":"2026-03-18T17:16:37","modified_gmt":"2026-03-18T11:46:37","slug":"sc-judicial-review-of-confirmed-auction-sale-permissible-valuation-doubtful","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2026\/03\/17\/sc-judicial-review-of-confirmed-auction-sale-permissible-valuation-doubtful\/","title":{"rendered":"Supreme Court| Confirmed auction sale open to Judicial Scrutiny; Revaluation permissible to ensure fair price fetched in recovery proceedings"},"content":{"rendered":"<div style=\"text-align: justify; line-height: 150%;\">\n<p style=\"margin-bottom: 3%;\"><span style=\"font-weight: bold;\">Supreme Court:<\/span> In a civil appeal arising from the Madras High Court&#8217;s judgment dated 06 February 2020, it upheld the validity of the auction sale conducted in recovery proceedings but remitted the matter to the Debts Recovery Tribunal (DRT) for reconsideration of the valuation of the mortgaged properties, a Division Bench of J.B. Pardiwala and <span style=\"font-weight: bold;\">R. Mahadevan,*<\/span> JJ., affirmed the impugned order of the High Court and held that finality of confirmed auction sale does not bar judicial examination of adequacy of valuation or fixation of reserve price, particularly, where it was necessary to ensure that secured asset had fetched best possible price.<\/p>\n<p style=\"margin-bottom: 3%;\">In the instant matter, the Indian Bank had granted an &#8220;at par facility&#8221; to the borrower subject to maintenance of a cushion fund. The borrower failed to maintain the required balance, resulting in shortfall. As security for the liability, the guarantors created an equitable mortgage by deposit of title deeds relating to Schedule A to E properties. When the borrower failed to repay the outstanding amount, the bank-initiated proceedings before the DRT for recovery of Rs. 45,66,923.83 with interest from the borrower company and its guarantors.<\/p>\n<p style=\"margin-bottom: 3%;\">By final order dated 12 January 2010, the DRT issued a recovery certificate and directed attachment of the mortgaged properties. The Recovery Officer issued a proclamation of sale, and the auction was conducted on 29 October 2010. The appellant emerged as the highest bidder for Rs. 2,10,98,765\/-, deposited the sale consideration, and the sale was confirmed. A sale certificate dated 01 February 2011 was issued and registered in favour of the appellant.<\/p>\n<p style=\"margin-bottom: 3%;\">The guarantors challenged the recovery proceedings before the Debts Recovery Appellate Tribunal (DRAT), which ultimately upheld the validity of the auction. The matter reached the Madras High Court in writ proceedings, where the High Court affirmed the recovery proceedings but directed the DRT to reconsider the valuation of the properties and observed that if the properties had been sold for a lesser value, the successful auction purchaser (appellant) might be directed to make good the difference. Aggrieved, the appellant filed the present appeal before the Supreme Court challenging only the direction of remand on the question of valuation, contending that once the auction sale had been confirmed, the issue ought not to have been reopened.<\/p>\n<p style=\"margin-bottom: 3%;\">The Court noted that the recovery proceedings were initiated pursuant to a valid recovery certificate and the auction was conducted after obtaining a valuation report and issuing proclamation of sale. The appellant was declared the highest bidder, deposited the entire consideration, and a sale certificate was issued after confirmation of sale. While upholding the legality of the auction and protected the rights of the appellant, the DRAT had directed for reconsideration of the valuation of the properties and remitted the matter to the DRT on that limited aspect.<\/p>\n<p style=\"margin-bottom: 3%;\">At the outset, the Court noted that the appellant did not challenge the entire judgment of the High Court but only the direction relating to reconsideration of valuation. It was noted that the High Court had not set aside the auction sale, it had merely directed the DRT to examine whether the valuation and fixation of reserve price were proper.<\/p>\n<p style=\"margin-bottom: 3%;\">The Court reiterated the settled principle that the rights of a bona fide auction purchaser deserve protection and confirmed sales should not ordinarily be interfered with. However, the Court asserted that such protection is not absolute. Where credible issues arise regarding adequacy of valuation or fairness of the process, the court may exercise supervisory jurisdiction to ensure that the secured asset fetches the best possible price.<\/p>\n<p style=\"margin-bottom: 3%;\">Referring to <span style=\"font-style: italic;\">Rajiv Kumar Jindal<\/span> v. <span style=\"font-style: italic;\">BCI Staff Welfare Assn.<\/span>, <a href=\"http:\/\/www.scconline.com\/DocumentLink\/19Vn282j\" target=\"_blank\">2023 SCC OnLine SC 507<\/a>, the Court emphasised that the object of an auction is to secure the most remunerative price through competitive bidding and to prevent under-valuation or unfair dealing. Therefore, if the valuation or reserve price is doubtful, limited remand for fresh consideration could not be said to be legally untenable.<\/p>\n<p style=\"margin-bottom: 3%;\">The Court held that the High Court had adopted a balanced approach by remitting the matter only on the question of valuation without disturbing the recovery already effected or declaring the sale void. Such a limited remand did not prejudice the auction purchaser but ensured fairness in the recovery process.<\/p>\n<p>Rejecting the appellant&#8217;s contention that confirmation of the sale renders the matter entirely immune from further scrutiny, the Court held that requirement of fairness and proper valuation must coexist with the principle of finality of auction sales. The Court stated that<\/p>\n<p style=\"margin-bottom: 3%; margin-left: 36pt; font-weight: bold;\">&#8220;principle of finality attached to court-confirmed auction sales cannot operate to shield the process from judicial examination where the question relates to the adequacy of valuation or fixation of reserve price, particularly when such examination is necessary to ensure that the secured asset has fetched the best possible price.&#8221;<\/p>\n<p style=\"margin-bottom: 3%;\">The Court held that no error was committed by the High Court in remitting the matter to the DRT for reconsideration of valuation of the properties as the direction was limited in scope and intended to ensure that the secured asset had fetched the best possible price.<\/p>\n<p style=\"margin-bottom: 3%;\">Accordingly, the Court dismissed the civil appeal and affirmed the impugned order of the High Court.<\/p>\n<p style=\"margin-bottom: 3%;\">[<span style=\"font-weight: bold; color: #632423;\">Om Sakthi Sekar v. V. Sukumar, <a href=\"http:\/\/www.scconline.com\/DocumentLink\/bioI55sV\" target=\"_blank\" rel=\"noopener\">2026 SCC OnLine SC 368<\/a>, decided on 13-3-2026<\/span>]<\/p>\n<p style=\"margin-bottom: 3%; text-indent: 18pt; border: 2px solid black; border-radius: 10px; text-align: center; width: 50%; margin-left: auto; margin-right: auto; background-color: #DCDCDC;\"><strong><span style=\"color: #000080;\">*Judgment by <a href=\"https:\/\/www.scconline.com\/blog\/post\/2025\/06\/10\/know-thy-supreme-court-judge-justice-r-mahadevan-scc-times-legal-news-legal-research\/\" target=\"_blank\">Justice R. Mahadevan<\/a><\/span><\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p style=\"font-style: italic;\">&#8220;The requirement that the recovery process be fair, transparent and based on a proper assessment of value must co-exist with the principle of finality governing confirmed sales.&#8221;<\/p>\n","protected":false},"author":67514,"featured_media":378562,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,9],"tags":[100662,100663,50904,100661,3528,49365,70880,100660,5363,100659],"class_list":["post-378554","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-supremecourt","tag-adequacy-of-valuation","tag-auction-purchaser-rights","tag-auction-sale","tag-bona-fide-auction-purchaser","tag-Judicial_Review","tag-justice-j-b-pardiwala","tag-justice-r-mahadevan","tag-recovery-proceedings-before-drt","tag-supreme-court","tag-valuation-of-property"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.4 (Yoast SEO v26.4) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>SC on scope of Judicial Review of confirmed auction sale | SCC Times<\/title>\n<meta name=\"description\" content=\"Supreme Court holds that Judicial Review of confirmed auction sale permissibile and revaluation can be done to ensure fair price fetched in recovery proceedings.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.scconline.com\/blog\/post\/2026\/03\/17\/sc-judicial-review-of-confirmed-auction-sale-permissible-valuation-doubtful\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Supreme Court| Confirmed auction sale open to Judicial Scrutiny; 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under Section 18 of SARFAESI Act: Supreme Court","author":"Prachi Bhardwaj","date":"January 7, 2023","format":false,"excerpt":"The Court was called upon to decide as to while calculating the amount to be deposited as predeposit under Section 18 of the SARFAESI Act, 50% of which amount the borrower is required to deposit as pre-deposit and whether while calculating the amount of \u201cdebt due\u201d, the amount deposited by\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/01\/Borrower-to-pre-deposit-50-of-the-debt-due-including-interest-under-Section-18-of-SARFAESI-Act.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":271311,"url":"https:\/\/www.scconline.com\/blog\/post\/2022\/08\/06\/can-secured-creditors-be-left-remediless-if-winding-up-proceedings-are-pending-before-the-court-rajasthan-high-court-elucidates\/","url_meta":{"origin":378554,"position":2},"title":"Whether proceedings be entertained for recovery of money realized by sale of assets of company against which winding up proceedings are pending? Rajasthan High Court analyses","author":"Editor","date":"August 6, 2022","format":false,"excerpt":"Rajasthan High Court: In a case where the secured creditors like Unit Trust of India (\u2018UTI') and a workman have preferred their petitions way back in the year 2000 and 2014 respectively, and are awaiting result of the winding up, Pushpendra Bhati, J. held that they cannot be allowed to\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Rajasthan High Court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/07\/rajasthan_high_court-1.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/07\/rajasthan_high_court-1.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/07\/rajasthan_high_court-1.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/07\/rajasthan_high_court-1.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/07\/rajasthan_high_court-1.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":244477,"url":"https:\/\/www.scconline.com\/blog\/post\/2021\/02\/27\/sale-confirmed-objections-of-judgment-debtor-overruled-can-consent-decree-be-set-aside-in-such-case-supreme-court-answers\/","url_meta":{"origin":378554,"position":3},"title":"Sale confirmed; objections of judgment debtor overruled. Can consent decree be set aside in such case? Supreme Court answers","author":"Editor","date":"February 27, 2021","format":false,"excerpt":"Supreme Court: The 3-Judge Bench comprising of R. Subhash Reddy, M. R. Shah* and Ashok Bhushan, JJ., set aside the order of High Court of judicature at Karnataka holding that the Court had exceeded its jurisdiction while quashing the order. The Bench expressed, \u201cWhen the mortgaged property was sold in\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/sc-3-3.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/sc-3-3.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/sc-3-3.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/sc-3-3.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/sc-3-3.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":277821,"url":"https:\/\/www.scconline.com\/blog\/post\/2022\/11\/21\/supreme-court-suit-for-damages-concerning-the-balance-land-cannot-be-barred-by-section-34-of-sarfaesi-act-legal-research-legal-news-updates\/","url_meta":{"origin":378554,"position":4},"title":"Supreme Court| Suit for damages concerning balance land cannot be barred by Section 34 of SARFAESI Act","author":"Editor","date":"November 21, 2022","format":false,"excerpt":"\u00a0 \u00a0 Supreme Court: In an appeal against the judgment passed by the Kerala High Court, wherein it has set aside the judgment passed by the Trial Court directing the Bank to pay the plaintiff a sum of Rs.58,10,000 with interest at the rate of 12% per annum from the\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/11\/MicrosoftTeams-image-319-3.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":271733,"url":"https:\/\/www.scconline.com\/blog\/post\/2022\/08\/17\/rule-60-second-schedule-income-tax-act-judgment-debtor-right-to-save-his-property-valuable-cannot-be-taken-away-due-to-technical-error-bonafide-mistake-supreme-court-legal-research-news\/","url_meta":{"origin":378554,"position":5},"title":"Judgment Debtor&#8217;s right under Rule 60 of Second Schedule of Income Tax Act a valuable right to save his property; cannot be taken away on technical ground or bona fide mistake for which he is not at fault: SC","author":"Prachi Bhardwaj","date":"August 17, 2022","format":false,"excerpt":"Supreme Court: The bench of MR Shah* and BV Nagarathna, JJ has held that the right available to the judgment debtor under Rule 60 of the Second Schedule of the Income Tax Act, 1961 is a valuable right and the last resort\/opportunity to the judgment debtor to save his property\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/08\/MicrosoftTeams-image-49.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/08\/MicrosoftTeams-image-49.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/08\/MicrosoftTeams-image-49.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/08\/MicrosoftTeams-image-49.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/08\/MicrosoftTeams-image-49.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]}],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/378554","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/users\/67514"}],"replies":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/comments?post=378554"}],"version-history":[{"count":0,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/378554\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media\/378562"}],"wp:attachment":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media?parent=378554"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/categories?post=378554"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/tags?post=378554"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}