Gujarat HC orders SBI to refund auction deposit with interest after 18 years

In a significant judgment, the Gujarat High Court has ordered the State Bank of India (SBI) to refund the full auction amount to a purchaser who has been waiting for nearly two decades to finalise a property sale.

The court further noted that since the bank had kept the petitioner's funds for several years, it was "just and appropriate" to award interest. Consequently, the SBI has been directed to refund the principal amount of ₹9,79,084 along with 6% interest per annum, calculated from December 24, 2008, until the date of actual payment.

The division bench ruled in favour of the petitioner. The petitioner had emerged as the highest bidder in a public auction conducted on December 10, 2008, following recovery proceedings initiated by the bank against defaulting borrowers.

Despite the petitioner depositing the full bid amount of ₹9,79,084 by late 2008, the sale remained in limbo. The court noted that the sale was never confirmed, no sale certificate was issued, and the petitioner was never granted possession of the property.

In a case where the auction was conducted in 2008 and the sale is not concluded even as of now, the auction purchaser... would definitely have acquired a right to seek for recovery, the amount which he has deposited with DRT,” the court observed.

The Debt Recovery Tribunal (DRT), Ahmedabad, has been authorised to re-auction the property to recover the outstanding debts.