The Madurai Bench of the Madras High Court has directed Punjab National Bank, Tiruchi, to return ₹29.31 lakh along with interest deposited by a petitioner, who had participated in an e-auction conducted by the bank in respect of a property in Madurai.
The court was hearing a petition filed by PR Thangamashiri. The petitioner had participated in the e-auction conducted by the bank in February in respect of a property at Anayur, Madurai.
He deposited 25% of the total amount. Thereafter, the petitioner was asked to pay the balance 75%. Since there was a delay in raising funds, he sought an extension. Thereafter, he was given further extension to pay the balance amount.
In these circumstances, the petitioner found that there was an encumbrance on the property. He said the bank should put the property up for public auction free of any encumbrances.
When the petitioner demanded to clear it, the bank rejected it. The bank decided to re-auction the property and forfeited the amount on the ground that the petitioner did not pay the balance amount of the bid within the extended time.
Justice R. Mahadevan and J. Satya Narayan Prasad’s bench said that when there is no alleged loss to the bank, the seized funds can be returned. In any case, in the event of refund of the earnest money deposit, the bank will be able to compensate and suffer no loss, as they can recover the amount from subsequent re-auction, the court said and directed the bank to refund Directed that an amount of ` 29.31 lakh was deposited by the petitioner with interest at the rate of 6% per annum from the date of deposit till the date of reimbursement.