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Orissa High Court
Sumit Mohanty vs Punjab National Bank on 18 March, 2026
Author: Chittaranjan Dash
Bench: Chittaranjan Dash
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C). No. 22488 of 2024
Sumit Mohanty .... Petitioner
Mr. Ramakant Mohanty, Sr. Advocate
-Versus-
Punjab National Bank, Bhubaneswar .... Opp. Parties
and Others
Mr. Anjan Kumar Biswal, Advocate
for OPs-1 & 2
Mr. Samir Kumar Behera, Advocate
For OP No.3
CORAM:
JUSTICE KRISHNA SHRIPAD DIXIT
JUSTICE CHITTARANJAN DASH
ORDER
Order No. 18.03.2026
06. The security property was put to public auction on
15.03.2016 and the Petitioner happened to be the highest bidder
in a sum of Rs.60.25 lakh of which he paid Rs.30.25 lakh as on
30.04.2016. The Bank sent letter dated 04.05.2016 to the
Petitioner to the effect that 50 decimals of land were acquired
for the State Sewerage Board and, therefore, he should take
back his money by furnishing Bank account details.
2. Petitioner's wife letter dated 05.05.2016 told the Bank to
confine the auction to the remainder of the property by
proportionately reducing the bid amount. The Bank, we are told,
did not respond to this and, therefore, Petitioner filed SA
No.4/2018 before the DRT, Cuttack seeking an order for
delivering remainder of the property, i.e., 170 decimals. The
DRT granted status quo order on 06.02.2018 that was
eventually continued from time to time. In the meanwhile,
second auction was notified to be held on 22.02.2018 and third
auction on 23.05.2018, which did not materialize.
3. The 4th auction took place on 24.03.2023 in respect of
170 decimals of secured property, 50 having been already
acquired for the benefit of the Sewerage Board. Petitioner's
wife Smt. Ramya Rani, being the highest bidder, secured the
property in the said auction by remitting the bid amount. With
this development, Petitioner unconditionally withdrew his S.A.
on 31.07.2023 on the ground that the same has become
infructuous. He tells that at least interest should be directed to
be paid to his client for the agony which he was put to.
4. Having heard learned counsel for the parties and having
perused the petition papers, we grant marginal interference in
the matter as under and for the following reasons:
4.1. The Bank had put the entire security property
admeasuring 220 decimals on 15.03.2016 without disclosing
that 50 decimals of the same were acquired by the State for the
Sewerage Board. The version of the Bank that it did not have
any knowledge of acquisition is irrelevant when fact remains
that the Petitioner was made to participate in the said Auction.
The contention of Panel Counsel appearing for the Bank that the
subject property belonged to the father-in-law of the Petitioner,
also would not come to his rescue. In law, in-laws have
independent personalities. Father-in-law is a person, his son-in-
law is a person and son-in-law's wife is also a person
independent of each other. Merely because father-in-law is the
owner of property, which his daughter has bought in auction, no
attribution can be made to the Petitioner unless a clandestine
arrangement is demonstrated. That is not the case of anyone.
For ignorance of the Bank, a citizen participating in the auction
cannot suffer.
4.2 The above view gains support from the text of Rule 9(7)
of The Security Interest (Enforcement) Rules, 2002, which
reads as under:
"9(7) Where the immovable property sold is subject to any
encumbrances, the authorized officer may, if he thinks fit,
allow the purchaser to deposit with him the money
required to discharge the encumbrances and any interest
due thereon together with such additional amount that may
be sufficient to meet the contingencies or further cost,
expenses and interest as may be determined by him."
Ordinarily, it is the duty of the Bank to make all reasonable
inquiries relating to the possession of the secured asset before it
is put to public auction, so that, the participant in the auction
would not be put to prejudice. We hasten to add that the
doctrine of caveat emptor also plays a role and, therefore, the
responsibility of the intending auction buyer cannot be
completely lost sight off. Especially when the property
belonged to his father-in-law and later is retained in a public
auction by Petitioner's wife, who is none other than his father-
in-law's daughter herself. What reasonable enquiries were made
before participating in the bid, the petition averments militantly
lack. Be that as it may, justice of the case warrants that no
interest be directed to be paid; some solatium be paid to the
Petitioner who was made to participate in the public auction that
was held on 15.03.2016 for a sum of Rs.60.25 lakh of which a
sum of Rs.30.25 lakh was deposited by him as on 30.04.2016.
In the above circumstances, this petition marginally
succeeds. A direction issues to the Bank to pay to the Petitioner
a lump sum of Rs.50,000/- (Rupees Fifty Thousand only) within
four weeks reckoned from this day, failing which an additional
sum of Rs.250/- shall be payable per day of delay for the first
month and Rs.500/- for the days next following. Cost is made
easy.
(Krishna Shripad Dixit)
Judge
(Chittaranjan Dash)
Judge
AKPradhan/Priyanka
Signed by: ANANTA KUMAR PRADHAN
Designation: Senior Stenographer
Reason: Authentication
Location: HIGH COURT OF ORISSA
Date: 19-Mar-2026 16:05:56
