The appellate court held that since the borrowed funds were kept in an interest-bearing scheme, the auction purchaser is entitled to a refund of the auction proceeds along with interest. The appeal allowing the refund with interest was permitted.
Refund of auction sale amount along with interest @ 8% per annum simple within 30 days.
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Regular Appeal No. 164/2018 Date: 02.02.2023
Pawan Kumar Baranwal Vs. Central Bank of India & Ors.
Present : Shri V. K. Shukla, counsel for the appellant, Shri Himanshu Tiwari, counsel for the respondent-Bank,
Heard the learned counsels for the parties.
Learned counsel for the appellant submits that the appellant is the auction purchaser of the mortgaged property in an auction held on 11.07.2016, but the Tribunal below has set aside the auction sale notice and directed the Bank only to refund the auction amount of Rs. 36.00 lacs without any interest, which was deposited by the appellant in the year 2016, whereas the amount deposited by the borrower was kept by the Bank in the interest bearing scheme, therefore, the appellant deserves the interest on the auction amount. As such the order impugned passed by the Tribunal below directing the Bank to refund the auction amount without interest is not sustainable in the eye of law.
Learned counsel for the respondent-bank submits that in the year 2018, the appellant was asked to take back the auction money, but he had not taken the same. Further, there was no direction for payment of interest, therefore, the amount, which was deposited by the appellant, was being refunded without interest, which has not been accepted by the appellant.
Considering the fact that the amount of the borrower was deposited by the Bank in interest bearing scheme and the loan account has been settled with him and the reason best known to the Bank, as to why the amount deposited by the
auction purchaser was not kept in the interest bearing scheme, for which the appellant cannot be made to suffer.
In view of the above, the appeal is allowed to the extent that the auction sale amount along with interest @ 8% per annum simple is directed to be refunded by the Bank to the appellant within 30 days from the date of this order.
Justice R. D. Khare Chairperson
VN Giri
1 issue framed by the court
Whether the auction purchaser is entitled to interest on the refund of the auction amount deposited in the year 2016.
Pawan Kumar Baranwal
Central Bank of India
R. D. Khare
VN Giri
As recorded by the court registry
4 orders share this CNR
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