Failure to pay the required 25% bid amount justifies forfeiture of the earnest money deposit.

The petitioner was the successful bidder for two sites in the BDA’s e-auction.

He paid the required amounts for Site No. 763, which was subsequently conveyed to him, but did not pay the required 25% of the bid amount (excluding the initial deposit) for Site No. 799 within 72 hours.

He sought additional time, citing COVID-19-related financial difficulty, and later requested that his ₹4,00,000 EMD not be forfeited and instead be adjusted against a future auction.

The BDA rejected his request, relying on the auction terms and the absence of a provision permitting such adjustment.

The petitioner sought certiorari against that decision and relied on H. Srinivas v. The Site Auction Confirmation Committee, B.D.A. and Another, ILR 2015 Karnataka 4302.

1. Whether the petitioner was entitled to relief from forfeiture of the EMD after failing to deposit the required 25% of the bid amount for Site No. 799 within the prescribed time.

2. Whether the EMD could be directed to be adjusted against a future BDA e-auction in reliance on H. Srinivas.

3. Whether Rule 6(4) of the Bangalore Development Authority (Disposal of Corner Sites and Commercial Sites) Rules, 1984 entitled the petitioner to an extension of time in the circumstances.

Rule 6(4) of the Bangalore Development Authority (Disposal of Corner Sites and Commercial Sites) Rules, 1984 permits the Commissioner to extend the time for depositing the balance bid amount, subject to the prescribed limits, interest and penalty.

The auction terms required payment of 25% of the bid amount, excluding the initial deposit, within 72 hours and warned that failure to comply would result in forfeiture of the EMD.

The Court held that H. Srinivas did not establish a general obligation on the BDA to allow an EMD to be adjusted against future auctions, nor did it address the BDA’s power to forfeit EMD for breach of an essential auction term.

The petitioner did not pay the required 25% for Site No. 799 within 72 hours, despite notice of the payment deadline and the consequence of default.

The Court considered that the BDA had incurred public expense in bringing the site to auction and that the petitioner’s default deprived it of the opportunity to proceed with other willing purchasers.

It found that the petitioner’s inability to arrange funds, even if connected to COVID-19, did not entitle him to relief.

Rule 6(4) did not assist him on these facts, and H. Srinivas did not support a right to EMD adjustment or displace the consequence of failing to meet an essential auction condition.

It did not grant the requested relief against forfeiture or direct that the EMD be adjusted against a future auction.