The executive brief
The decision in front of the business.
01The result is grounded in the express auction clause and the bidder’s default on the record of this case.
02A rule limiting the size of earnest money does not, by itself, determine the treatment of a separate part-payment accepted under the auction terms.
03Diligence and financing should inform the decision to bid; a later intention to pay is not a substitute for timely performance or supporting evidence.
- Underlying event
Industry, model and participation details
Real Estate, Housing & LandFinancial Services, Capital Markets & InsuranceGovernance & AdminInfrastructure & Urban DevelopmentSupreme Court of India · Institution named in source recordDevelopment context
The facts that shape the opportunity.
The decision and amounts
In M/s ASJ Finsolutions Pvt. Ltd. v. Vikram Bajaj, Civil Appeal 13023/2025, 2026 INSC 1062, the Supreme Court dismissed the appeal on 28 September. The bidder had paid ₹6.39 crore, comprising ₹2.55 crore EMD and ₹3.84 crore part-consideration, but did not pay the ₹19.17-crore balance within the stipulated period.
Supreme Court of India / Indian Kanoon ↗The decisive contractual basis
Paragraphs 20–23 distinguish earnest money from the additional payment and apply an auction term covering forfeiture of the entire amount deposited when the successful bidder fails to pay the balance. The Court declined to order refund. The holding is not a rule that every liquidation-auction dispute has the same outcome.
Supreme Court of India / Indian Kanoon ↗Supreme Court of India / LexStreak ↗TLGS assessment
Commercial and operating implications.
Build a deposit-at-risk schedule
Before authorising participation, list each required payment, due date, refund condition and event of forfeiture. Separate application money, earnest money, part-consideration and any other amount by its actual contractual treatment. The investment committee should see the maximum exposure under the terms it will accept, together with the conditions under which that exposure can increase. This is more useful than a generic statement that only an EMD is at risk.
Match financing to the payment clock
Prepare evidence of available funds, executable lender commitments, internal approvals and the time needed for drawdown and transfer. Stress-test the schedule against holidays, documentation, collateral and conditions precedent. A transaction whose funding becomes available only after the contractual deadline is not financeable on those terms without an effective permitted change. Legal and treasury teams should approve the same payment calendar before the bid is submitted.
Complete material diligence before price commitment
Review the rights offered, title and possession record, disclosed disputes, permitted use and transfer conditions with the appropriate professionals. Convert findings into price, conditions or a decision not to participate. A bidder should not assume that a question raised after selection automatically suspends the payment obligation. Where a material uncertainty remains, identify the contractual or judicial mechanism that could address it rather than rely on unilateral withholding.
Preserve the record needed for a real dispute
Maintain the exact notice and amendments, communications, proof of payments, financing evidence and orders affecting performance. Counsel should examine the particular clause, default, disclosures and remedies before assessing forfeiture or refund. Board reporting should distinguish an argument the business wishes to advance from the evidence supporting it. Settlement and recovery analysis should use that legally reviewed record, not a headline from another auction case.
From insight to action
Priorities for leadership.
Investors and boards
Approve the full deposit exposure, diligence findings and a funded completion plan before bidding.
Treasury and transaction teams
Align cash availability and documentary conditions with the binding payment timetable.
Legal and insolvency teams
Review the actual forfeiture clause and preserve the contractual, financial and procedural record for any dispute.
Project and policy milestones
What changes the next decision.
The terms and applicable legal framework of each proposed auction, documentary financing readiness and any orders that actually affect contractual performance. Apply the judgment through the facts and accepted conditions, not as a universal forfeiture formula.
Reference documents
Sources and further reading.
- Judgment text reproductionM/s ASJ Finsolutions Pvt. Ltd. v. Vikram Bajaj — 2026 INSC 1062 ↗Supreme Court of India / Indian Kanoon · 28 September 2026
Civil Appeal 13023/2025; paragraphs 20–23 address deposit components, the express forfeiture term and dismissal. Case-specific treatment, not a universal rule for every auction.
- Judgment text reproductionASJ Finsolutions: reproduced judgment and paragraph references ↗Supreme Court of India / LexStreak · 28 September 2026
Full judgment section corroborates the operative auction clause and disposition in paragraphs 21–24. Editorial headnotes are separate from the court text.