Auction Purchaser Cannot Seek Interest Through Writ After NCDRC Rejects Claim: Karnataka High Court
The Karnataka High Court on 29 September held that an auction purchaser cannot claim interest from a bank for delayed delivery of possession when the National Consumer Disputes Redressal Commission (NCDRC) has already ruled that the delay did not result from any wilful default or deficiency in service by the bank.
A Single Judge Bench of Justice Sachin Shankar Magadum dismissed a writ petition filed by G. Mahimaiah seeking interest at 12% per annum from the State Bank of India, formerly State Bank of Mysore, for the delay in handing over possession of an auctioned property. He held:
“Once the National Commission has recorded a finding that the Bank was not at fault in not being able to deliver possession during the period when proceedings were pending and interim orders were operating, the petitioner cannot seek, by way of a writ of mandamus, substantially the same relief in the guise of a claim for interest. Such a direction would, in effect, amount to granting compensation for an alleged deficiency which has already been negatived by the competent forum.”
Mahimaiah purchased the property at a State Bank of Mysore auction in 2006 and subsequently approached the District Consumer Forum, alleging that the bank had failed to deliver possession.
The District Forum ruled in his favour, but the NCDRC set aside its order, finding that pending litigation and interim orders had prevented the bank from handing over possession. The bank ultimately delivered possession on 7 March 2011, and the NCDRC found no wilful default or deficiency in service on the bank's part.
Subsequently, Mahimaiah approached the High Court seeking interest at 12% per annum on Rs. 10,15,000 for the period from 22 August 2006 to 7 March 2011, claiming a total of Rs. 65,68,250.
The Bench observed that the NCDRC had examined the merits of Mahimaiah's grievance and concluded that the delay was not attributable to the bank. It held that he could not revive the same grievance in writ proceedings merely by presenting it as a claim for interest.
Further, it noted that Mahimaiah had failed to establish an independent legal or contractual right to interest for the period in question. In the absence of an enforceable legal obligation on the bank, it could not direct the bank to pay interest.
Accordingly, the High Court dismissed the writ petition.
For Petitioner: Advocate Kiran M.M
For Respondents: Advocate T.P. Muthanna