Stelco Ltd. vs Bank Of India And Ors

P.K. Bhasin, J

I have heard Counsel for the parties finally.

The only grievance raised by the appellant-auction purchaser, whose purchase of mortgaged property in question has been set aside by the learned DRT finding many faults in the conduct thereof by the Authorised Officer, is that while cancelling the auction and directing return of the auction money to the auction purchaser, the learned DRT has awarded only 7.5% per annum simple interest. The appellant had claimed interest @12% per annum with monthly rests.

During the course of hearing of this appeal, the learned Counsel for the appellant has cited the following judgments, all of which were dealing with the award of interest to the auction purchasers whose auctions were quashed by the Courts:-

(1) Surinder Nath Kapoor v. Union of India & Ors., AIR 1988 SC 1777.

(2) Hindi Pracharak Prakashan & Anr. v. M/s. D.K. Brothers & Ors., AIR 1990 SC 1221.

(3) Subhransu Sekhar Padhi v. Gunamani Swain & Ors. VII (2014) SLT 216 : AIR 2015 SC 542.

In many of these judgments, the interest awarded to the auction purchaser by the Hon'ble Supreme Court was 12% per annum, learned Counsel for the appellant today submits that the appellant will be satisfied in case simple interest @ 12% per annum is awarded to it as against 7.5% per annum awarded by the learned DRT.

The learned Counsel for the respondent Bank, on the other hand, submits that no fault can be found out in the discretion exercised by the DRT in the matter of awarding interest to the auction purchaser.

Going by the trend of rate of interest awarded by the superior Courts in aforementioned judgments relied upon by the Counsel for the appellant, this Tribunal is of the view that the interest awarded to the appellant-auction purchaser @ 7.5% per annum simple does appear to be unreasonable considering the fact that a huge amount of Rs. 4,75,50,000/- paid by the appellant-auction purchaser for the purchase of the property in question remained stuck for over six years. The prayer being confined by the appellant for awarding interest to it at simple rate of 12% per annum does appear to be justified and can be accepted especially when the Bank had also been awarded interest at the same rate by the DRT in its O.A. against the borrower. This appeal is accordingly disposed of by awarding interest to the appellant-auction purchaser @ 12% per annum (simple) from the date of payment of auction money to the Bank till the date of its refund. Since the Bank is stated to have refunded money with interest awarded by the DRT, the appellant shall now be entitled only to get the difference in the rate of interest awarded by the DRT and now by this Tribunal. The Bank shall make payment to the appellant within two weeks. In case this payment is not made, the appellant will be at liberty to approach this Tribunal with an application for appropriate direction for ensuring the compliance of this order of this Tribunal.

The record of the DRT be returned forthwith.