Technical Glitch Could Have Misled Bidder; Kerala High Court Directs Central Bank To Refund Auction Deposit

The Kerala High Court has upheld a direction requiring the Central Bank of India to refund money deposited by an auction participant after finding that an admitted technical glitch could have led her to believe that her bid had not been accepted.

A Division Bench of Chief Justice Soumen Sen and Justice Syam Kumar V.M. passed the order while partly allowing an appeal filed by the Bank against a Single Judge's decision directing a refund of the amount deposited by the auction participant and directing action against bank officials.

“Having regard to the fact that the technical glitch is admitted and the same could induce a belief in the mind of the writ petitioner that his bid had not been accepted as it was deposited beyond the time stipulated by the appellant, we do not find any infirmity in the order passed by the learned Single Judge.”, the court noted.

The writ petition had been filed by Shahana Venus seeking refund of 35% of the money deposited by her after she was not declared the successful bidder.

The bank opposed the refund and contended that the dispute fell within the domain of the Recovery of Debts and Bankruptcy Act, 1993. The judgment records that the Bank admitted the existence of a technical glitch but refused to refund the amount on the ground that the petitioner's account had been debited before the deposit was accepted by the Bank.

The Division Bench noted that it was an admitted fact that the property had been sold to the successful bidder and that the entire amount had been released.

The Court accordingly upheld the direction to refund the amount to Shahana within one week.

However, it set aside the Single Judge's direction to take action against bank officials.

“However the direction to take appropriate action against the officials, as contained in the paragraph 11 of the impunged judgment, is set aside for the reasons recorded above. The amount should be refunded within one week from today.”, the court noted.

For Appellants: Advocate K.M Aneesh, Standing Counsel

For Respondent: Advocate S Sachithanantha Pai