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2016 (9) TMI 713 - HC - Indian LawsProcedure followed by the bank in accordance with the statutory mandate of the SARFAESI Act and the Rules of 2002 - auction sale held by bank - Held that:- The 7th respondent/auction purchaser is put to loss owing to a lapse primarily attributable to the bank in following the mandatory procedure stipulated in the Rules of 2002. Be it noted that the judgment in MATHEW VARGHESE [2015 (1) TMI 461 - SUPREME COURT ] was delivered as long back as on 10.02.2014, but the bank chose to ignore the legal position as settled therein and resorted to its own procedure, nearly a year and a half later, in July, 2015. The 7th respondent/auction purchaser would therefore be entitled to be suitably compensated for the loss caused to it in this regard. We therefore direct refund of the amounts deposited by the 7th respondent with the bank along with interest thereon at the rate of 18% per annum from the date of each deposit. Significantly, this was the rate of interest awarded by the Supreme Court to the bidder in MATHEW VARGHESE1 who had also parted with his monies. The amount so determined shall be refunded by the bank to the 7th respondent within two weeks from the date of receipt of a copy of this order by way of a pay order/bankers cheque. The writ petition is accordingly allowed setting aside the order passed by the Debts Recovery Tribunal, Visakhapatnam. We further hold that the sale held by the Indian Overseas Bank on 15.07.2015 was illegal, being in utter violation of the statutory mandate of Rules 8 and 9 of the Rules of 2002. All steps taken by the bank pursuant to the said illegal sale are also set aside.
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