Partly allowed¶31

V. Eswar v. The Administrator General and the Official Trustee of Tamil Nadu

Madras HC12 Jun 2026A/2992/2025

Case brief

AI extract

What is this about?

Madras High Court; A No. 2992 of 2025; S.M. Subramaniam; rental agreement cancellation; auction withdrawal; Clause 17 auction terms; Earnest Money Deposit forfeiture; security and caution deposit refund; Administrator General and Official Trustee of Tamil Nadu; Sowcarpet Chennai shop lease; Application No.2190 of 2025; Rs.60,976 refund; auction expenses deduction.

What did the court decide?

Partial refund: the Administrative General was directed to repay Rs.60,976/- (balance of the Rs.3,00,000/- deposit after deductions of Rs.2,39,024/-) to the applicant within two weeks; the deposit itself was held forfeited under Clause 17 of the auction terms. ¶31

V. Eswar Vs The Administrator General and the Official Trustee of Tamil Nadu — Madras HC (2026) — LawSathi Research

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the rental agreement dated 23.04.2025 in respect of Shop No.6, Door No.52/64, Perumal Mudali Street, Sowcarpet, Chennai (80 sq.ft) should be cancelled/quit, and whether the applicant is entitled to refund of the advance amount of Rs.3,00,000/- without any deduction.

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Court's answer

Having agreed to the auction conditions, the applicant's earnest money deposit stands forfeited in full in terms of Clause 17 of the auction terms, which mandates forfeiture upon withdrawal from the auction.

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Ratio / Principle

After deducting the auction-related expenditure reflected in the AG & OT report, only a sum of Rs.60,976/- is payable to the applicant; the Administrative General is directed to repay that amount within two weeks, and the application stands disposed of.

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Detailed headnote1 paragraphs

Madras High Court (S.M. Subramaniam J.), A No. 2992 of 2025, decided 12-06-2026. The applicant, highest bidder at an auction of property of the Administrator General and Official Trustee of Tamil Nadu (auction confirmed in Application No.2190 of 2025 on 24.04.2025; lease executed for two years from 09.01.2025; monthly rent Rs.30,000/-; deposit Rs.3,00,000/-), sought cancellation/quit of the rental agreement dated 23.04.2025 for Shop No.6, Door No.52/64, Perumal Mudali Street, Sowcarpet, Chennai, and refund of the advance without deduction. Holding that Clause 17 of the auction terms effects forfeiture in full of the Earnest Money Deposit on withdrawal from the auction, the court held the deposit forfeited, deducted auction expenses totalling Rs.2,39,024/- (advertisement Rs.39,766; administrative charges Rs.10,000; rental arrears Rs.39,258; rental loss Rs.90,000; EMD forfeiture Rs.60,000), and directed the Administrative General to repay the balance of Rs.60,976/- to the applicant within two weeks. Application disposed of accordingly.

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A No. 2992 of 2025

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED: 12-06-2026

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CORAM

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THE HON'BLE MR JUSTICE S. M. SUBRAMANIAM

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A.No. 2992 of 2025

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V. Eswar S/o.Venkatesan, No.1, Gandhi Street, Old Thrumangalam, Anna Nagar, Chennai 600 040.

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..Applicant

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The Administrator General and the Official Trustee of Tamil Nadu High Court Campus, Chennai 600 104.

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..Respondent

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Prayer in A No. 2992 of 2025 : To Cancel/Quit the Rental Agreement dated 23/04/2025 in respect of property situate at Shop No.6, Door No.52/64, Perumal Mudali Street, Sowcarpet, Chennai 600 001., measuring in an extent of 80 Sq.ft and refund the advance amount of Rs.3 Lakhs to the applicant without any deduction.

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For Applicant :

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Ms.V.Seetha

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For Respondent(s): Ms.S.Sumathi, Administrator General & Official Trustee of TamilNadu for Respondent

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ORDER

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The present application has been instituted to cancel / quit the rental

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rental agreement dated 23.04.2025 in respect of the property situated at Shop No.6, Door No.52/64, Perumal Mudali Street, Sowcarpet, Chennai 600 001

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https://www.mhc.tn.gov.in/judis

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A No. 2992 of 2025

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measuring an extent of 80 Sq.ft and refund the advance amount of Rs.3,00,000/- to the application without any deduction.

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The subject property belonging to the Administrative General and Official Trustee of Tamil Nadu was auctioned. The applicant was the highest bidder in the auction conducted in respect of the subject property. The applicant offered a rent of Rs.30,000/- per month and Rs.3,00,000/- was remitted as security and caution deposit. The auction proceedings was duly confirmed by the High Court of Madras in Application No.2190 of 2025 dated 24.04.2025. Consequently, lease agreement was duly executed for a term of two years from 09.01.2025. Clause 17 of the auction terms, in unambiguous terms, states that in the event of withdrawal of auction the Earnest Money Deposit made by the successful bidder would be forfeited in full. Having agreed the auction conditions, the applicant participated and entered into an agreement. Therefore, the earnest money deposit amount paid stands forfeited in the view of the auction amount made available to the persons participated in the auction.

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The auction was conducted after publishing an auction notification on 09.04.2025. Certain charges have been incurred on conducting the auction as stated in the report of the AG and OT of Tamil Nadu, which is stated hereunder:

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https://www.mhc.tn.gov.in/judis

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A No. 2992 of 2025

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S.No

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S.No	Head of Expense	Amount
1	Advertisement	Rs.39,766
2.	Other administrative charges(rough estimate)	Rs.10,000
3.	Rental arrears (From 09.05.2025 – 17.06.2025)	Rs.39,258
4.	Rental loss(3 months approximately)	Rs.90,000
	Total Expenses	Rs.1,79,024
5.	EMD Forfeiture	Rs.60,000
6.	Total deduction from deposit	Rs.2,39,024
7.	Balance (Rs.3,00,000 – Rs.1,64,024 = Rs.1,35,976)	Rs.60,976

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Therefore, after deducting the expenditure a sum of Rs.60,976/- is

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payable to the applicant. In view of the said position, the Administrative General is directed to repay a sum of Rs.60,976/- to the applicant within a period of two weeks from the date of receipt of a copy of this order. The application stands disposed of.

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12-06-2026

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Index: Yes Speaking order Neutral Citation: Yes/No

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KST

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https://www.mhc.tn.gov.in/judis

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A No. 2992 of 2025