1. The prescribed time limit for deposit of the balance 75% of the purchase price under Rule 9(4) of the Security Interest (Enforcement) Rules, 2002 is fifteen days, extendable in writing by the secured creditor but strictly capped at a maximum period of three months from the date of confirmation of sale. It is a matter of settled law, as reiterated by the Hon'ble Supreme Court in M.R. Vasumathi, that no authority can extend this period beyond the statutory limit of three months, regardless of conduct or delay by the borrower or auction purchaser.
2. Where the auction purchaser fails to deposit the balance consideration within the stipulated or extended period (up to three months), Rule 9(5) squarely applies, mandating the forfeiture of the deposited amount to the secured creditor and the right to resell the property. The process of forfeiture is valid if the purchaser defaults within the permissible statutory window.
3. The obligation to disclose encumbrances or pending litigations under Rules 8(7)(a), 9(9), and 9(10) pertains to the issuance of the sale certificate after full payment. These provisions are not triggered during the auction phase if the pending litigation did not exist at the time the auction notice was issued. A late revival of such proceedings after the notice date does not create a retrospective liability to amend the auction notice to disclose the encumbrance.
4. Mere delay in completing payment does not, in isolation, invalidate proceedings that were otherwise in compliance with the statutory framework. The object of the SARFAESI Act is the lawful realization of the secured asset through a fair and transparent process compliant with prescribed rules, rather than the mechanical culmination of a sale at any cost.
