The Bombay High Court has set aside the auction of a 4.42-acre parcel of land belonging to the Aura City housing project in Shikrapur, Pune district, citing multiple procedural irregularities in the auction process. The land had been auctioned on April 29, 2026, to recover dues arising from a MahaRERA recovery warrant issued against the project’s developer.
A division bench comprising Justice A.S. Gadkari and Justice Kamal Khata, in its July 15 order, directed the developer, Bhagvati Infra (formerly M/s Jalan Maple Shelters), to refund approximately Rs 3.15 crore, including applicable interest, to 13 homebuyers who had booked flats in the project in 2012. The court directed that the payment be made within two weeks. Once the payments are completed, the concerned authorities have been instructed to remove the encumbrances on the property, reverse the mutation entries, and notify the developer within one week.
The High Court also ordered the Maharashtra government to initiate disciplinary action, including possible suspension, against the Shirur tehsildar. The court observed that the auction process was marked by multiple irregularities and alleged collusion that favoured the successful bidder.
Among the procedural lapses identified by the court were failure to provide the mandatory 30-day notice period before conducting the auction, non-obtaining of an independent valuation report from a government-approved valuer, reliance solely on the ready reckoner value, refusal to accept the developer’s demand draft towards partial payment of dues before the auction, and incorrect property details in the auction notice. The court further noted that the successful bidder failed to submit mandatory GST documents and financial statements required under the auction terms.
The bench remarked that these deficiencies indicated that the auction had been conducted in a manner that benefited the auction purchaser rather than ensuring a transparent recovery process.
The court also expressed strong displeasure over the conduct of the Pune district collector, who appeared virtually before the court while travelling in a vehicle. The judges observed that such conduct reflected a lack of respect for judicial proceedings and was not expected from a senior government official.
The dispute dates back to 2018 when the affected homebuyers approached MahaRERA seeking refunds. Following the regulatory authority’s recovery warrant issued in 2021, the property was attached for recovery proceedings. An earlier attempt to auction the property in 2023 was postponed after the State Bank of India, a secured creditor, declined to issue a no-objection certificate due to pending recovery proceedings under the SARFAESI Act.
The High Court also suggested that the Chairperson of the State Bank of India consider conducting an inquiry into the prolonged delay in selling the property. The court observed that the delay had adversely affected homebuyers, who have been waiting since 2012 to recover their investments, while interest liabilities continued to accumulate over the years.
