Earnest money deposit

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one of my clients had a property which he had mortgaged for loan . he couldnt pay back the loan and that is why the bank had to sell of his property after giving him various notices. in the sale auction another person made the highest bid and paid the earnest money deposit . after paying the emd of 25% he couldnt pay the rest of the installments even after frequent reminders. .the bank had the policy that thay can fofeit the earnest money deposit. after forefeiting the same amount will the earnest money deposit be treated as profit of the bank or can it be adjusted for the value of the property when it is sold again .. or if my clients buys it back will he pay the full amount or the amount which comes up after adjusting the earnest money deposit. please give me a sought after reply and relevant case laws. as early as possible. 

The Bank would not adjust the amount of EMD against loan/outstanding.It would simply be forfeited.However if the bidder makes arrangement of balance amount then chances are there that bank may allow him to pay in instalments with interest.