In a major relief for property buyers who purchased assets through distress auctions during the Covid-19 lockdown, the Bombay High Court has ruled that delays caused by the pandemic cannot be used to void auction sales.

The judgment applies to multiple connected petitions where buyers had deposited the initial 15% auction amount but could not deposit the remaining 85% within the prescribed time due to the lockdown.

The Case: Auction Held Just Before Lockdown

A public auction was conducted on 17 March 2020, just days before India entered a nationwide lockdown.
The petitioners—successful bidders—immediately deposited 15% of the bid amount, as mandated under Rule 107(11)(g) of the Maharashtra Cooperative Societies Rules, 1961.

However, due to the sudden lockdown and financial disruption, they were unable to deposit the remaining 85% amount within the time limit required under Rule 107(11)(h).

They requested an extension, which was granted by the Special Recovery Officer. The remaining auction amount was paid on 15 May 2020 and 20 May 2020, both dates falling within the harsh Covid period.

Revisional Authority Voided the Sale—High Court Intervenes

Despite full payment, the Revisional Authority later set aside the auction confirmation, claiming non-compliance with the strict timelines under Rule 107.

The High Court disagreed.

Justice Amit Borkar held that the Supreme Court’s order in Suo Motu Writ Petition No. 3 of 2020, which extended limitation for all legal proceedings and excluded the period between 15 March 2020 and 14 March 2021, fully applied to auction-sale timelines.

Not Just a Money Transaction—A Legal Proceeding

The Court clarified that:

• depositing the balance auction amount is not a mere financial act,
• it is a mandatory legal step in the execution process,
• and therefore falls within the meaning of “proceedings” covered by the Supreme Court’s protective order.

Since the buyers deposited the balance during the excluded Covid period, their compliance was considered valid.

A Precedent That Will Impact Many Real Estate Buyers

The judgment protects bona fide buyers who were caught in unavoidable lockdown delays.
It also brings clarity to distressed property auctions conducted during the pandemic — a period when many financial institutions, societies, and recovery officers struggled to follow statutory timelines.

By restoring the auction sale and declaring the buyers’ deposits valid, the Court has given a significant boost to investor confidence in Maharashtra’s property auction ecosystem.

Also Read: Bombay High Court Rules BMC Permission Not Required for Tenantable Repairs

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