The Bombay High Court on Tuesday scrapped a court-conducted auction of a prime Mumbai land parcel after finding serious irregularities in the bidding process. The court went a step further and ordered forfeiture of the earnest money deposits (EMD) of all bidders, calling the entire auction “rigged” and lacking fairness.
Justice Madhav J. Jamdar passed the order while hearing an execution application linked to a long-pending property dispute.
Read also:- Humiliation Is Not Justice: Allahabad High Court Strikes Down Placard Punishment for Student
Background of the Case
The matter arose from Execution Application No. 163 of 2005, where the court had directed sale of a leasehold land parcel through a public auction conducted by the Sheriff of Mumbai.
The property under auction is a 852.50 sq. mtr. plot at JVPD Scheme, Vile Parle (West)-one of Mumbai’s most sought-after residential neighbourhoods. The Sheriff published auction notices in Free Press Journal and Navshakti, and allowed inspection of the land before bids were opened in open court.
Five bidders deposited an EMD of ₹10 lakh each and participated in the auction.
What Happened During the Auction
Initial bids ranged from ₹85 lakh to ₹1 crore, except for one bidder-Swarnim Gems & Jewelers Pvt. Ltd., which opened with a significantly higher offer of ₹6.03 crore.
As bidding progressed in court, only two participants actively raised their offers. One bidder exited the courtroom without permission, while another was allowed to step out to consult internally. Eventually, the highest bid reached ₹9.75 crore, after which the competing bidder declined to raise further.
The court noted these movements carefully and flagged them as deeply problematic.
Court’s Observations
Justice Jamdar made strong remarks about the conduct of bidders and the auction process itself.
“The sanctity of a court auction must be preserved,” the bench observed, stressing that auctions supervised by courts cannot resemble private negotiations or staged bidding.
The court relied on a Supreme Court ruling to underline that judicial auctions must prevent underbidding, cartelisation, and loss to litigants. “The purpose of an open auction is to fetch the best possible price,” the judge noted.
Serious Concerns Over Valuation
A key red flag for the court was the valuation report, which pegged the land’s value at just ₹64.47 lakh-a figure the court found shockingly low for a JVPD Scheme property.
“The valuation is grossly unrealistic,” the judge remarked, pointing out that even the initial bid of ₹6.03 crore contradicted the official valuation by a massive margin.
The court also noted that several bidders appeared to be aware of this low valuation, raising suspicion of a coordinated attempt to suppress prices.
One bidder later told the court that he intended to bid as high as ₹15 crore, but was allegedly discouraged from doing so.
Taking stock of all circumstances, Justice Jamdar concluded that the bidding showed signs of syndicate formation and artificial competition. “The entire bidding process has been rigged,” the court said in clear terms.
Court’s Final Decision
In a strict order, the Bombay High Court:
- Quashed and set aside the entire auction process
- Forfeited the ₹10 lakh EMD deposited by each bidder
- Directed that the forfeited amount be parked in a nationalised bank for six months
- Ordered the Deputy Sheriff to obtain a fresh valuation report
- Directed that the property be re-auctioned strictly in accordance with law
The Sheriff’s Report No. 6 of 2026 was disposed of accordingly.
Case Title: Anuradha Nayan Shah vs Jayantilal Vallabhdas Patni & Ors.
Case No.: Execution Application No. 163 of 2005
Decision Date: 4 February 2026
