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Forfeiting Deposit Made By Auction Purchaser Can Be Challenged Before DRT

The Supreme Court, in Agarwal Tracom Pvt Ltd Vs Punjab National Bank, has held that an action of secured creditor in forfeiting the deposit made by the auction purchaser is a part of the measures taken by the secured creditor under Section 13(4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

The bench comprising of Justice RK Agrawal and Justice AM Sapre upheld a Delhi High Court judgment which had dismissed the Writ petition filed by an auction purchaser on the ground of alternate remedy. The Bench held that the Auction purchaser is entitled to challenge the action of the secured creditor before the DRT by filing an application under Section 17(1) of the SARFAESI Act.

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