She says she never took the loan and her signatures were forged, and the house was going to auction as a whole

Justice Jasmeet Singh excluded a senior citizen's one-third undivided share from the e-auction, holding that if the property sells as a whole she would be left chasing an auction purchaser or a money claim.

The property is a plot of 499 square yards at Gulmohar Park in New Delhi, with a basement, ground, first and second floors. The petitioner, a senior citizen who used to live in Mumbai and later relocated abroad, holds a one-third undivided share in it, acquired through an agreement to sell of 1982 and a deed of conveyance of 1995. The remaining two-thirds is held by her sister-in-law.

On 25 April 2026 an asset reconstruction company issued an e-auction notice for the property. On 13 October 2026 the Delhi High Court held that her one-third share cannot be sold in that auction until the veracity of the loan documents is adjudicated by a competent court.

How the shares came to be one-third and two-thirds

The property was originally held jointly by the petitioner, her sister-in-law and the wife of a third brother. The third co-owner sued for partition of her one-third share in 2005. The proceedings ended in a settlement under which the sister-in-law agreed to acquire that share, and a consent decree of 9 November 2005 directed payment of ₹2,33,33,333 to her. A release deed followed in February 2006, after which the petitioner and her sister-in-law were recorded in the municipal records as the exclusive co-owners, holding one-third and two-thirds respectively.

At the relevant time the petitioner was in Mumbai, while her sister-in-law and brother-in-law were living at the property and looking after it.

Five loans and a co-applicant

On the petitioner's case, her sister-in-law and brother-in-law obtained loan facilities from a bank by creating a mortgage over the property. The principal across five facilities was stated by the bank to be ₹14.96 crore. She was shown in the loan documents as a co-applicant.

She says she neither applied for nor availed any of it, and that her signatures on the documents were forged. She first learned of the loans in May 2021, when a representative of the bank's loan recovery department contacted her son at her former Mumbai address about the outstanding amounts. The representative gave him five loan account numbers.

On 31 May 2021 she emailed the bank denying having taken any such loan and asking for copies of the loan agreements, sanction letters, mortgage deed and title documents. The bank told her the five accounts had been availed by her brother-in-law and that she had been shown as a co-applicant, and that ₹12,35,54,534 was outstanding as at that date. She wrote again to the bank and to her brother-in-law repeating that she had executed nothing, and in June 2021 her representative obtained certain loan documents. She then had four of them privately examined by a forensic expert, and filed a civil suit challenging the validity of the mortgage and of the loan documents.

Three objections, and how each was met

The respondents raised delay and laches. The Court held against them on the facts: the petitioner became aware of the alleged fraud on 29 May 2021 and has continuously followed it up since, including by filing a civil suit, which persuaded the Judge that she is not someone who has been sleeping over her rights. The petition is therefore not barred by delay and laches.

They raised suppression, saying she had concealed that proceedings were pending before a Debts Recovery Tribunal. She answered that she was unaware of them and placed on record orders of the DRT showing she had not been served. From two of those orders it was evident that nobody was appearing on her behalf, so prima facie it seemed she was unaware of the proceedings, and the averment of suppression was held not borne out.

They raised duplication, saying the writ seeks the same relief as the civil suit. The Court distinguished them: in the suit she has challenged the validity of the mortgage and of the loan documents, while in this petition she seeks, among other prayers, a stay of the e-auction notice. The writ petition is based on infraction of her rights and does not seek the same relief as the suit.

A fourth objection, about a defective general power of attorney dated 20 April 2023, was dealt with shortly. The Judge was not in agreement with it — firstly because it is a hyper-technical plea, and secondly because paragraphs 5 to 7 of the power of attorney authorise the petitioner's son to take steps to file the petition, so the petition is validly instituted.

Why the share had to come out of the auction

The reasoning on relief is practical, and it turns on what an auction does that cannot be undone.

If the entire property is sold on an “as is where is” basis to the highest bidder, third-party equities arise. If the petitioner is right about the forgery, she would then be compelled to recover her property from an auction purchaser, or be left to a money claim. Against that the Court set Article 300A of the Constitution: no person shall be deprived of property save by authority of law.

The conclusion follows from putting those two together. The undivided one-third share cannot be permitted to be sold in the e-auction until the veracity of the loan documents is adjudicated by a competent court of jurisdiction. The Court has not decided whether the signatures were forged — that is for the suit — but it has refused to let the question become academic while it is pending.

The order

The writ petition was allowed. The petitioner's undivided one-third share in the property at Gulmohar Park is to be excluded from the auction. The Court imposed no restriction with regard to the two-thirds undivided share, which may proceed.

Mr Vaibhav Gaggar, senior advocate, with Mr Abhijeet Chauhan and Mr Mayank Singhal appeared for the petitioner; Mr Rajiv Nayar, senior advocate, with Mr Naveen Soni for the asset reconstruction company; and Mr Sidhant Kumar with Mr Om Batra and Ms Anwita for the third and fourth respondents. The judgment was reserved on 8 July 2026.