Supreme Court: Chembur Auction Invalidated Due to Payment Delays by Developer

In a recent court case, Adishakti Developers went up against the State of Maharashtra over a property auction in Chembur. The Supreme Court decided the auction was not valid because of mistakes in the process, leading to talks about auction rules.

The Property and Auction

A piece of land in Chembur was auctioned to get back money owed by a company, M/s. Borse Brothers, to the Mahanagar Co-operative Bank. The auction happened on January 29, 2005, and Adishakti Developers was the highest bidder, offering ₹1.51 crore.

Payment Delays and Legal Challenges

Adishakti Developers paid only part of the money on the auction day, with the rest not paid until March 17, 2005. This delay broke Rule 107 of the Maharashtra Co-operative Societies Rules, which requires full payment within 15 days. This led to family members of Panditrao Borse, a partner in the company that owed money, challenging the auction.

"The rest of the purchase money... shall be paid within fifteen days from the date of sale." - Rule 107

High Court's Initial Decision

The High Court rejected Adishakti Developers' request, stressing the importance of paying on time. It also noted that the family members had offered to pay off the debt, showing they wanted to solve the issue.

Supreme Court's Verdict

On February 25, 2026, the Supreme Court, led by Justice Manoj Misra, declared the auction and its approval invalid because of the payment delay. The court ordered that Adishakti Developers get their money back with 6% interest and called for a new auction.

"The auction sale held on 29.01.2005 is set aside... the confirmation of sale, dated 18.03.2005, is declared null and void."

Implications and Next Steps

The decision highlights the need to follow auction rules carefully. The property will be auctioned again, and the bank and family members might work out a deal. This case shows how complicated property auctions can be and the importance of following legal steps.

The Supreme Court's decision affects not only the people involved but also sets an example for future auctions, emphasizing the need to stick to the rules.

For more details, see the full judgment by Justice Manoj Misra in the case of M/S Adishakti Developers vs. The State of Maharashtra.