Patna High Court
Vishal Kumar vs The State Of Bihar on 15 October, 2025
Author: P. B. Bajanthri
Bench: Alok Kumar Sinha, P. B. Bajanthri
IN THE HIGH COURT OF JUDICATURE AT PATNA
Letters Patent Appeal No.615 of 2025
In
Civil Writ Jurisdiction Case No.16777 of 2024
======================================================
Vishal Kumar son of Krishna Nandan Prasad, resident of 102, Om Complex,
S.P. Verma Road, Patna G.P.O., Patna, Bihar-800001, P.O. G.P.O., P.S.
Kotwali, Patna, Bihar.
... ... Appellant/s
Versus
1. The State of Bihar through the District Magistrate, Patna, Bihar.
2. The District Magistrate, Patna, Bihar.
3. The Bank of Baroda through its Chairman having its registered office at
Baroda Bhawan, 7th Floor, R.C. Dutt Road, Vadodara.
4. The Chairman, Bank of Baroda having its registered office at Baroda
Bhawan, 7th Floor, R.C. Dutt Road, Vadodara.
5. The Branch Manager, Bank of Baroda, Branch Office Exhibition Road,
Patna, Bihar-800001.
6. The Branch Manager, Bank of Baroda ROSARB Branch, 1st Floor, Saryug
Complex, Nehru Nagar, Patliputra, Bihar-800013.
7. White House Apartment Owners Association a Society registered under the
Societies Registration Act, 1960 having its office at White House Apartment,
Behind Bhumi Vikas Bank, Buddha Marg, Patna-800 001, through its
Secretary, Sri Awadh Kishore Rajgarhia, son of Late Champa Lal, aged
about 65 years, resident of Flat No. B-702, White House Apartment, Near
Bhumi Vikas Bank, Buddha Marg, Patna-800 001.
... ... Respondent/s
======================================================
Appearance :
For the Appellant/s : Mr. Sanjeev Kumar Mishra, Sr. Advocate
Ms. Manini Jaiswal, Advocate
Mr. Manas Rajdeep, Advocate
Mr. Shubham Kumar Upadhayay, Advocate
Ms. Adya Pandey, Advocate
Mr. Kumar Ravish, Advocate
For the State : Mr. Sanjay Kumar Ghosarvey AC to AAG-3
For the BOB : Mr. Mrigank Mauli, Sr. Advocate
Mr. Santosh Kumar Singh, Advocate
Mr. Anubhav Verma, Advocate
======================================================
CORAM: HONOURABLE THE CHIEF JUSTICE
and
HONOURABLE MR. JUSTICE ALOK KUMAR SINHA
CAV JUDGMENT
(Per: HONOURABLE MR. JUSTICE ALOK KUMAR SINHA)
Date: 15-10-2025
Heard the parties.
Patna High Court L.P.A No.615 of 2025 dt.15-10-2025
2/11
2. The appellant in the L.P.A. has prayed for following
relief:
"(i) For directing the respondents, particularly
the bank to pay interest on the principal
amount of ₹1,87,75,000/- (Rupees One Crore
Eighty-Seven Lakhs Seventy-Five Thousand
only) deposited by the appellant till the date of
handing over the possession i.e., 19.06.2024 to
11.02.2025
."
3. The brief facts leading to the filing of the present
Letters Patent Appeal are that the appellant herein, who was the
writ petitioner before the Learned Single Judge, had participated in
an e-auction conducted by the respondent Bank for sale of a
mortgaged property. The appellant emerged as the highest bidder
and accordingly deposited the entire sale consideration amounting
to ₹1,87,75,000/- (Rupees One Crore Eighty-Seven Lakhs
Seventy-Five Thousand only) on 19.06.2024 in favour of the
respondent Bank. The learned counsel for the appellant submits
that despite payment of the entire sale consideration, the
respondent Bank failed to hand over the physical possession of the
property or execute the sale deed in favour of the appellant within
a reasonable period of time, thereby depriving him of both
possession and ownership rights for several months.
4. It is submitted by the learned counsel for the
appellant that only pursuant to the interim order dated 05.02.2025
Patna High Court L.P.A No.615 of 2025 dt.15-10-2025
passed by this Hon'ble Court in CWJC No. 16777 of 2024, the
Bank ultimately handed over the physical possession of the flat in
question to the appellant on 11.02.2025. Thus, from 19.06.2024 till
11.02.2025, for a period of nearly eight months, the appellant was
deprived of possession of the property despite having paid the
entire sale amount. It is further contended that during this entire
period, the respondent Bank continued to hold and utilize the
substantial sum of ₹1,87,75,000/- belonging to the appellant,
without paying any interest thereon, which is wholly unjustified
and arbitrary.
5. The learned counsel for the appellant submits that the
Hon'ble Single Judge, while disposing of the writ petition, was
pleased to direct the respondent Bank to execute the sale deed in
favour of the appellant, which direction has since been complied
with. However, the Learned Single Judge erred in rejecting the
appellant's legitimate claim for interest on the amount deposited,
which had remained with the Bank for an unduly long period. The
appellant's grievance is confined solely to this part of the
impugned order dated 29.04.2025 passed in CWJC No. 16777 of
2024.
6. It is contended by the learned counsel for the
appellant that the Hon'ble Single Judge failed to properly
Patna High Court L.P.A No.615 of 2025 dt.15-10-2025
appreciate that the Bank, after receiving the full bid amount, was
under a legal and equitable obligation to hand over the possession
and execute the sale deed without unnecessary delay. The failure to
do so amounts to arbitrary and unreasonable conduct, causing
financial loss and mental distress to the appellant. The counsel
further submits that the appellant, having acted in good faith and
deposited the full consideration under the bona fide belief that he
would be handed over peaceful possession along with title transfer,
has been wrongfully deprived of the use and enjoyment of both the
property and his own funds for a considerable time.
7. It is further urged that the rejection of the claim for
interest on the ground that the appellant had participated in the
auction process is misconceived and contrary to settled principles
of equity and justice. The learned counsel emphasizes that the
Bank had enjoyed the benefit of the appellant's funds for several
months without any corresponding benefit being extended to the
appellant, and therefore, it is incumbent upon the Bank to pay
reasonable interest for the said period.
8. The learned counsel for the appellant, therefore, prays
that the impugned order dated 29.04.2025 passed by the Learned
Single Judge be set aside to the extent it rejects the claim of
interest, and this Hon'ble Court be pleased to hold that the
Patna High Court L.P.A No.615 of 2025 dt.15-10-2025
appellant is legally entitled to interest on the deposited amount of
₹1,87,75,000/- from 19.06.2024 till 11.02.2025, when the
possession was finally delivered.
9. In response to the present Letters Patent Appeal, the
learned counsel for the respondents no. 3 to 6 respectfully submits
that the appeal filed by the appellant is wholly misconceived,
devoid of merit, and amounts to a clear abuse of the process of
law. It is urged that the part of the impugned order dated
29.04.2025 passed by the Learned Single Judge in CWJC No.
16777 of 2024, whereby the claim for payment of interest was
rejected, is well-reasoned, legally justified, and based on sound
appreciation of facts and law.
10. It is submitted that the appellant's participation in
the e-auction held on 06.06.2024 was with full and conscious
knowledge that the confirmation of sale was expressly made
subject to further orders of the Hon'ble Debts Recovery Tribunal
(DRT), Patna, in S.A. No. 66 of 2024 filed by the original
borrower. The appellant was subsequently impleaded as a party to
the said proceeding. The learned counsel for the respondents
submits that having knowingly participated in a conditional
auction and having accepted the risk of delay contingent upon the
outcome of the DRT proceedings, the appellant is estopped, both
Patna High Court L.P.A No.615 of 2025 dt.15-10-2025
in law and in equity, from now turning around and seeking interest
or compensation on account of that very delay. The appellant
voluntarily entered into the transaction despite being aware of the
litigation.
11. The learned counsel further submits that the
allegations of arbitrariness or inaction on the part of the Bank are
baseless and contrary to the record. The delay in handing over
possession was neither deliberate nor unjustified. It was directly
attributable to two uncontrollable factors: first, the pendency of
S.A. No. 66 of 2024 before the DRT, which rendered the sale
conditional; and second, the original borrower's continued illegal
occupation and refusal to vacate or remove their household articles
from the secured asset. The Bank could not have lawfully
delivered vacant possession until these impediments were cleared.
The respondents' actions were entirely in conformity with law, and
any delay was an inevitable consequence of the pending litigation
and physical encumbrance of the property.
12. It is further urged by the learned counsel for the
respondents that the appellant's assertion that the Bank had
"enjoyed" the auction money for several months is a gross
mischaracterization of the legal and factual position. The learned
counsel clarifies that the auction proceeds deposited by the
Patna High Court L.P.A No.615 of 2025 dt.15-10-2025
appellant were not placed in any profit-bearing account for the
Bank's benefit but were adjusted against the outstanding dues of a
non-performing asset (NPA). The primary objective of the
SARFAESI Act, 2002 is recovery of public money and reduction
of NPAs, not profit-making by banks. The funds were applied
towards the recovery of defaulted loan amounts, and hence, the
allegation of unjust enrichment is wholly unfounded.
13. The learned counsel for the respondents further
submits that the SARFAESI auction is a statutory process
governed by the principles of caveat emptor--"let the buyer
beware"--and is conducted on "As is where is", "As is what is",
and "Whatever there is" basis. The appellant, being a participant in
such a sale, had a corresponding obligation to undertake due
diligence regarding the property's status, title, and possession. The
Bank, as a secured creditor, is not a real estate vendor guaranteeing
a clear title or immediate possession; its role is confined to
enforcing the security interest to recover its dues. Therefore, the
appellant cannot claim to have been misled or to have suffered any
legally compensable injury due to delay arising from
circumstances explicitly mentioned in the auction terms and public
notice.
Patna High Court L.P.A No.615 of 2025 dt.15-10-2025
14. The learned counsel for the respondents therefore
submits that the appeal is devoid of any substance and is liable to
be dismissed in limine. The appellant, having consciously
participated in a conditional auction, cannot seek to rewrite the
terms of sale or demand compensation for a foreseeable delay
arising out of judicial proceedings. The impugned order dated
29.04.2025 does not suffer from any infirmity warranting
interference. Accordingly, it is humbly prayed that this Hon'ble
Court may be pleased to dismiss the present Letters Patent Appeal,
upholding the reasoned findings of the Learned Single Judge and
affirming the rejection of the appellant's claim for payment of
interest.
15. Upon perusal of the pleadings, documents, and
submissions advanced on behalf of the parties, the principal issue
that arises for consideration before this Hon'ble Court is whether,
in the facts and circumstances of the present case, the appellant,
having deposited the entire sale consideration of ₹1,87,75,000/-
pursuant to the e-auction conducted under the provisions of the
SARFAESI Act, 2002, and having been subsequently delivered
possession of the property after certain delay occasioned by
pending litigation and judicial orders, is entitled in law or in equity
Patna High Court L.P.A No.615 of 2025 dt.15-10-2025
to claim any interest on the said deposited amount for the
intervening period during which possession remained undelivered.
16. It is not in dispute that the appellant had deposited
the entire sale consideration on 19.06.2024 and that the physical
possession of the property was handed over to him only on
11.02.2025, pursuant to the interim order of the Learned Single
Judge dated 05.02.2025. Thus, for a period of nearly eight months,
the appellant's substantial amount remained with the respondent
Bank without the corresponding benefit of possession or
enjoyment of the property. The record reveals that the delay in
handing over possession was not attributable to any default or
omission on the part of the appellant, who had duly complied with
all the obligations stipulated in the auction notice and terms of
sale.
17. This Court finds merit in the submission of the
learned counsel for the appellant that the Bank, having accepted
the entire consideration amount, was under an obligation--both
legal and equitable--to deliver possession within a reasonable
time. The plea of the Bank that the delay was due to pendency of
litigation or the conduct of the borrower cannot absolve it of the
responsibility to safeguard the interests of the bona fide auction
purchaser. Once the sale was confirmed and the amount was
Patna High Court L.P.A No.615 of 2025 dt.15-10-2025
accepted, the Bank became a trustee of the deposited funds to the
extent that it could not unjustly retain or utilize the same without
extending possession to the purchaser. The conduct of the Bank in
withholding possession for nearly eight months, despite receiving
full payment, has caused demonstrable financial prejudice to the
appellant, who was deprived of the use of both his funds and the
property.
18. The Learned Single Judge, while passing the
impugned order dated 29.04.2025, failed to appreciate that the
appellant's claim for interest was not based on any commercial
bargain but on principles of equity, fairness, and accountability.
Even if the SARFAESI Act, 2002 or the Security Interest
(Enforcement) Rules, 2002 do not expressly provide for payment
of interest in such circumstances, this Court is of the view that the
inherent jurisdiction of this Court under Article 226 of the
Constitution of India permits grant of just and equitable relief to
ensure that a party is not made to suffer for reasons not attributable
to them.
19. Accordingly, this Court holds that the appellant is
legally entitled to interest on the amount of ₹1,87,75,000/-, as the
retention of such a substantial sum by the Bank without
corresponding delivery of possession was wholly unjustified.
Patna High Court L.P.A No.615 of 2025 dt.15-10-2025
Appellant however cannot be granted interest from 19.06.2024 to
18.09.2024 as handling process time for the Bank would be around
ninety days from the date of deposit, which has to be taken into
account. The rejection of this claim by the Learned Single Judge in
the impugned order dated 29.04.2025, therefore, cannot be
sustained in the eyes of law and stands set aside to that extent.
20. Accordingly, the appeal is allowed. The respondents
are directed to pay to the appellant simple interest at the rate of 6%
per annum on the amount of ₹1,87,75,000/- for the aforesaid
period i.e, from 19.09.2024 (the date of deposit) till 11.02.2025
(the date of delivery of possession), within a period of four months
from the date of receipt of this judgment. All pending interlocutory
applications, if any, stand disposed of.
(P. B. Bajanthri, CJ)
( Alok Kumar Sinha, J)
Prakash Narayan
AFR/NAFR AFR
CAV DATE 13.10.2025
Uploading Date 15.10.2025
Transmission Date NA
