HC Grants Refund to Auction Purchaser Over Non-Disclosure Under SARFAESI

  • News|Blog|FEMA & Banking|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 17 May, 2026

Latest from Taxmann

SARFAESI auction purchaser

Case Details: M. Kishore Akash vs. Branch Manager - [2026] 186 taxmann.com 144 (HC-Madras)

Judiciary and Counsel Details

  • Hemant Chandangoudar, J.
  • R.J. Karthick for the Petitioner.
  • C. Karthik, Standing Counsel for the Respondent.

Facts of the Case

In the instant case, the Borrower had defaulted in repayment of the loan, whereupon the respondent, secured creditor Bank, proceeded under the SARFAESI Act and auctioned the secured asset (vacant land). The petitioner–auction purchaser was declared successful, paid the entire sale consideration of about Rs. 31.47 lakhs, a sale certificate was issued in his favour, and he deposited about Rs. 2.74 lakhs towards registration expenses.

The petitioner asked the Bank to register the sale certificate, but registration could not be completed due to objections. On approaching the Sub-Registrar for registration, the petitioner was informed of a decree in a civil suit declaring that the plaintiff therein is the owner of the property and that the sale deed in favour of the borrower is null and void.

The petitioner immediately sought a refund of the entire amount from the Bank, which was not acceded to, leading to the present writ petition.

It was noted that though the Bank had entered an appearance in said suit, it did not disclose the pendency of the suit in the sale notice, nor did it inform the petitioner in any manner.

High Court Held

The High Court held that, since the Bank had failed to disclose the pendency of the suit and the decree passed therein, it had violated the provisions of the SARFAESI Act and the Rules. Consequently, the petitioner was entitled to a refund of the entire amount deposited, along with reasonable interest.

List of Cases Reviewed

List of Cases Referred to

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied

Leave a Reply

Your email address will not be published. Required fields are marked *

«
»

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied