Misc. Application No. 74/2023 In Appeal Dy. No. 435/2022 Sanjai Singh Vs. Indian Bank & 3 Ors.

Present: Shri Alok Rai, counsel for the applicant, Shri A. K. Srivastava, counsel for the respondent-Bank, None for the other respondents, ORDER Date : 22.04.2025 Learned counsel for the appellant submitted that there is no provision in the SARFAESI Act, 2002 to charge the interest on the auction amount, therefore, the Bank may be directed to accept the remaining auction amount without any interest, otherwise refund the amount with interest.

Learned counsel for the respondent-Bank submitted that as per the circular of the Reserve Bank of India, the appellant is liable to pay the interest for the delayed period on the auction amount and 25% of the auction amount has already been forfeited on the ground that the remaining 75% of the bid amount was not deposited by the appellant. Accordingly, the order impugned was passed, which is under challenge in the present appeal. It was contended that the appeal has already been decided by this Appellate Tribunal vide order dated 17.05.2023 and the present application has been filed by the appellant under Rule of 22 of the Debts Recovery Appellate Tribunal (Procedure) Rules, 1994.

Having heard the learned counsels for the parties and considering the material available on record, admittedly, the property in question was auctioned on 25.11.2020, in which the appellant was found to be highest bidder and 25% of the sale amount was deposited, but the remaining 75% of the said amount was not deposited, therefore, 25% of the auction amount was forfeited by the respondent-Bank. Further, the appellant filed an application No. 12 of 2021 for impleadment, but the same was not allowed by the Tribunal below observing that there is nothing, for which opportunity of hearing to the auction purchaser is necessary and the S.A. filed by the borrower was dismissed. Against the forfeiture of 25% of the sale amount, the appellant had filed an Appeal Dy. 435/2022, which was disposed off vide order dated 17.05.2023 with the condition that the appellant could approach the Bank with revalidated Bank draft within two days and thereafter the respondent-Bank shall consider and decide the same within two weeks thereafter. Accordingly, the appellant approached with the Bank, but the Bank demanded the interest for the delayed period vide letter dated 15.06.2023, against which the present application has been filed praying that the respondent Nos.1 & 2 may be directed to refund the auction amount with interest or to issue sale certificate and hand over the possession of the auctioned property to the appellant.

The main controversy involved in the present case is, as to whether the respondent-Bank is entitled for the interest on the auction amount for the delayed period or not?

It transpires that the auction sale was held on 25.11.2020, in which the appellant was found to be highest bidder and as per the sale notice, he has deposited 25% of the auction amount as per Rule 9(3) of the Security Interest (Enforcement) Rules, 2002, but the remaining 75% of the auction amount was not deposited within 15 days from the date of confirmation of the auction sale as required under Rule 9(4) of the said Rules, 2002. As per order dated 20.05.2023 of this Appellate Tribunal, the appellant approached the respondent-Bank with a demand draft of Rs. 56,65,000/- on 20.05.2023. Thus, it is clear that the said amount has been attempted to be deposited after more than 2.5 years. If the said amount was deposited within time as per the said Rule, the same would have definitely earned interest. The admitted fact is that the said amount was lying with the appellant for the said period and has been used either for the purpose the earning of interest or otherwise. Suppose, the appellant had deposited the said amount in time with the Bank and the same is now being returned due to some reason, the appellant himself would have asked for the interest. In the present