Kotak Mahindra Bank Limited Vs MD Developers (DART Kolkata)
The appeal before the Debts Recovery Appellate Tribunal, Kolkata, arose from a judgment dated 12 March 2025 passed by the Debts Recovery Tribunal, Visakhapatnam in S.A. No. 450 of 2023. By that judgment, the DRT had allowed the securitisation application, set aside the e-auction sale notice dated 24 July 2023 along with the auction conducted by the Bank, and directed the Bank to refund the auction amount to the auction purchaser with interest at the rate of 9% per annum from the date of payment until repayment, to be made within 30 days.
At the outset of the appeal, counsel for the appellant Bank clarified that the challenge was confined solely to the issue of award of interest at 9% per annum. It was noted that the amounts of ₹2,12,57,000 and ₹25,44,500 had already been transmitted by the Bank to the auction purchaser on 5 May 2025, and the auction purchaser had received the amounts without prejudice to his rights. Accordingly, the only issue for consideration in the appeal was the correctness of the rate of interest awarded by the DRT.
The appellant contended that the DRT had erred in granting interest at 9% per annum. Reliance was placed on a clause in the tender notice which stipulated that tenderers would not be entitled to claim any interest of whatsoever nature. It was argued that the auction purchaser, having accepted the terms and conditions of the tender documents, was bound by this clause and therefore not entitled to any interest.
