"Entire Auction & Bidding Process Was Rigged": Bombay High Court Quashes Sale Of Property, Orders Forfeiture Of Deposit By Bidders

The Bombay High Court has ordered a fresh 'revaluation' of a prime property at Mumbai's Vile Parle area after finding that the initial process of auction of the plot was 'rigged' with bidders coming a 'syndicate' and 'under-bidding' for the property.

Single-judge Justice Madhav Jamdar therefore while ordering fresh auction, ordered forfeiture of the Rs 10 lakh each Earnest Money Deposit (EMD) by five bidders, till further orders. 

The bench dealt with a report of the Deputy Sheriff of Mumbai, which stated that the terms and conditions of the sale of the subject property have been settled in the meeting held on January 14, 2026 and thereafter, Auction Sale Notice was published in “Free Press Journal” and “Nav Shakti” newspapers on January 22, 2026. The inspection of the suit land was given to the Bidders on January 28 2026 in response to which, five bidders submitted their bids along with EMD of Rs 10 lakhs each. 

As per the court order, the five bidders, were:

Pinakin Chitalia - Rs 1 Crore

Rushi Ajmera - Rs 90 lakhs

Anay Nayan Shah - Rs 1 Crore

Kushal Shah - Rs 85 lakhs, and

M/s. Swarnim Gems & Jewelers Pvt. Ltd. - Rs 6.03 crores.

The judge, noted that three of these bidders (Pinakin, Rushi and Kaushal )did not wanted to change their bids, however, Anay and the MD of Swarnim Gems hiked their bids thrice. While Anay enhanced his bid from Rs 1 crore to Rs 8.25 crores, Rs 8.75 crores and finally submitted a bid of Rs 9.50 crores, Swarnim Gems enhanced the bid amount from Rs 6.03 crores to Rs 8.50 crores, Rs 9 crores and finally to Rs 9.75 crores. 

This enhancement of the bid, was done after stepping out of the court and that too without taking permission of the court. 

"This is a Court Auction and therefore, sanctity of the process of the Court Auction has to be maintained. The manner in which Mahesh Soni, Director of M/s. Swarnim Gems & Jewelers Pvt. Ltd. (Bidder No.5) and Anay Nayan Shah (Bidder No.3) have conducted themselves and participated in this Court Auction, clearly shows that sanctity of the Court Auction is completely lost. The same clearly shows that this Court Auction is affected by formation of syndicate and under-bidding," the judge held in the order passed on February 4. 

Further, the judge noted that the Neelam Arch, Architect, Consulting Engineer, Surveyor & Govt. Property Valuer, had given a Valuation Report on December 19, 2025 of Rs 64.47 lakhs for the plot in question which measured 852.50 sq. mtrs.

Taking note of the valuation and the prime location of the plot, Justice Jamdar held that the Valuer has grossly 'undervalued' the property.

"It is also required to be noted that the plot in question is at JVPD Scheme, Vile Parle, Mumbai - 400 056 which is a very prime residential area in Mumbai. Not only the Valuation Report valuing the property at Rs.64,47,300/- is grossly undervaluing the property, however, the bids submitted by some of the bidders show that there is high probability that they were knowing the Valuation Report. It is required to be noted that the initial offer of Bidder No.5 was Rs.6.03 Crores and the same was increased to Rs.9.75 Crores. Thus, it is obvious that the other Bidders have given very low offers compared to the market price. Thus, in the facts and circumstances, the possibility of the formation of syndicate just to make a show of competition, cannot be ruled out," the judge opined. 

In any case, it is very clear that few offers particularly of Bidder Nos.1 to 4 are very low compared to the market price. Only Bidder No.3-Anay Nayan Shah increased the same to Rs.9.50 Crores, the judge said. 

Further, the bench noted that Bidder No 1 - Pinakin Chitalia, was intending to give an offer of Rs.15 Crores, but he was asked to 'keep quiet'

"Thus, the conduct of all the Bidders noted herein, shows that the entire bidding process has been rigged," Justice Jamdar remarked. 

Therefore, Justice Jamdar ordered, "This is a Court Auction. The properties are to be sold by the Court Auction to ensure that maximum price is fetched. The conduct of all the Bidders noted herein, clearly show that the entire auction process is rigged. Accordingly, in the facts and circumstances, EMD of Rs 10 lakhs, which has been offered by each of the Bidders is forfeited. The same be at present invested in a Nationalised Bank for a period of 6 months. After the subject property is sold in Court Auction conducted in accordance with law, further direction regarding said forfeited amount can be given."

With these observations, the bench quashed and set aside the entire process of sale of subject property by Court Auction. The Deputy Sheriff of Mumbai is therefore, ordered to give a fresh Report after receiving fresh valuation.

Appearance:

Advocates Rohit Bamne, Isha Vyas and Nivit Srivastava appeared for the Applicant.

Advocate Arun Panickar represented Manohar Properties Pvt. Ltd.

Advocate Mrinali Dave instructed by Keystone Partners represented Vallabhnagar Society which is located on the Plot.

Advocate A Ramakrishna represented Bidder No.1 -  Pinakin Chitalia.

Deputy Sheriff of Mumbai DS Choudhari was also present in the hearing. 

Case Title: Anuradha Nayan Shah vs Jayantilal Vallabhdas Patni (Execution Application 163 of 2005)

Citation: 2026 LiveLaw (Bom) 53

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