Case:- DELHI DEVELOPMENT AUTHORITY vs. CORPORATION BANK & ORS.
Citation:- 2025 INSC 1161
Date:- 25.09.2025
Hon’ble Supreme Court Bench:- JUSTICE SANJAY KUMAR & JUSTICE ALOK ARADHE
The Hon’ble Supreme Court quashed the auction by the Corporation Bank of a prime property located in Delhi, as the Bank failed to disclose the liability attached to the property in the auction.
- A Delhi property allotted by Delhi Development Authority (DDA) to a private club was mortgaged with Corporation Bank without necessary consent from the Lieutenant Governor. In 2012, the Bank held an e-auction and sold the property for ₹13.15 crore. However, the auction notice did not disclose that DDA had an encumbrance which include payment of unearned increase of price to the DDA
- The Hon’ble Court held that this omission violated Rule 53 of the Second Schedule to the Income Tax Act, 1961 and Rule 16 of the 1962 Rules, which require that all liabilities and encumbrances must be disclosed in sale notices. Since the buyer was kept in the dark about the liability, the Hon’ble Supreme Court said the e-auction was “misleading and incomplete” and no sanctity could be attached to it.
- Earlier, the Hon’ble Delhi High Court had dismissed DDA’s plea against the auction. The Hon’ble Supreme Court overturned that decision. The Hon’ble Court ruled that the Bank must return the entire money paid by the purchaser, as “no one should be unjustly enriched at another’s expense.”
- The Hon’ble Court strongly observed that the Bank “auctioned what it never lawfully possessed” and must bear the consequences of its illegal act.
