MERELY BEING THE HIGHEST BIDDER DOES NOT CONFER THE LEGAL RIGHT TO CLAIM THE AUCTIONED PROPERTY - SC

The Apex Court recently said that the highest bidder in an auction does not have any legal right to claim the auctioned property unless the same is approved by the State government or any other authority. 

A Supreme Court bench was hearing an appeal against the order of the Punjab and Haryana High Court which had confirmed the respondent's claim on the auctioned property stating that he was the highest bidder.

In this instant case, the Municipal Committee (appellant) had passed a resolution to execute and register the auctioned property, however, the appellant failed to execute it. The appellant argued that the respondent's possession was an illegal possession as the same was not granted by the State Government. Merely being the highest bidder does not confer any equitable or legal rights, it shall be only confirmed after the confirmation of sale and the letter accepting the bid is issued. 

The respondent argued that once he is confirmed to be the highest bidder and the sale has been confirmed by the Deputy Commissioner, he can rightfully claim his title on the said property. The respondent further referred to instances wherein the Commissioner had sought the government's response to confirm the sale deed.

A Division Bench of Justices Hemant Gupta and V Ramasubramanian held that the instances referred by the respondent were inter-departmental communication with no acceptance of the copy of the said communication to the plaintiff. Therefore, the Court set aside the order of the High Court in the absence of any approval granted. And declared the respondent to be in illegal possession of the property.