ELAKAYEM AUTO ANCILLARIES (P) LTD., vs THE UNION BANK OF INDIA,

W.P.No.48158 of 2025
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 08.10.2026
PRONOUNCED ON : 27.10.2026
THE HONOURABLE Ms. JUSTICE P.T. ASHA
W.P.No.48158 of 2025
Elakayem Auto Ancillaries (P) Ltd.,
Represented By Executive Director,
Arvind Adhi, No.159-b, Sipcot Industrial Complex,
Hosur-635 126 … Petitioner
Vs.
1. The Union Bank of India,
Managing Director and DEO,
Union Bank Bhawan,
239, Vidhan Bhavan Marg,
Nariman Point,
Mumbai - 400 021
2. The Union Bank of India
Stressed Assets Management Branch,
Represented By its Authorised Officer,
No.38 & 39 Whites Road,
Royapettah,
Chennai-600 014 ... Respondents
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W.P.No.48158 of 2025
Prayer: Writ Petition is filed under Article 226 of the Constitution of
India to issue writ of mandamus, directing the respondents herein to
compensate the petitioner herein by way of payment of interest @ 15
percentage per annum i.e. Rs.4,14,00,169.19/- (Rupees Four Crores
Fourteen Lakhs One Hundred and Sixty Nine Only) on the respective
payments made by the petitioner herein towards remittance of entire
Bid Amount, Stamp Duty, Registration Fee from the date of such
payments till 30.05.2025.
For Petitioner : Mr. V.P.Sengottuvel
Senior Counsel
For Mr. K.R.Nishanth
For Respondents : Mr. L.Sriram
For M/s. Chennai Law Firm
ORDER
This writ petition is filed seeking a mandamus directing the
respondents to compensate the petitioner by paying interest at 15% p.a.
on the respective payments made by the petitioner towards remittance
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W.P.No.48158 of 2025
of the entire bid amount, stamp duty, registration fees etc,. from the
date of the payment till 30.05.2025, within a time frame. The amount
was quantified at Rs.4,14,00,169.19/-.
2. It is the case of the petitioner that the subject property
belonged to one D.P.Sadhu, Director of Devas Engineering Systems
Private Limited. The company had availed credit facility from the
respondent by mortgaging its movable and immovable properties.
Thereafter, as soon as the company had committed default in the
payments, the bank had invoked the provisions of the Securitisation
and Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002, herein after called the Act. The bank had issued
notice under Section 13 (2) of the Act to the borrower company as well
as the guarantors and after following procedure had brought the
property to sale after issuing necessary notice as contemplated under
Rule 8 & 9 (1) of the Rules therein.
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W.P.No.48158 of 2025
3. The sale of the secured assets was done through MSTC limited
by holding a public e-auction on 23.02.2023 and the petitioner was
declared the successful bidder (H1 bidder). The total bid amount was a
sum of Rs.10,21,89,000/- and 10% EMD of Rs.1,02,08,900/- was
deposited on 21.02.2023.
4. The property for which the petitioner had bid was shown as
Item No.3 in the Auction Notice. On 23.02.2023, the petitioner was
directed to deposit a sum of Rs.2,55,47,250/- which constituted 25% of
the bid amount on or before 24.02.2023 and the balance amount within
15 days i.e., by 10.03.2023. The petitioner had deposited a sum of
Rs.1,53,13,350/- towards 25% of the bid amount after adjusting the
nd
10% EMD of Rs.1,02,08,900/-. On receipt of the aforesaid sum, the 2
respondent bank had issued confirmation of sale dated 24.02.2023.
5. On 04.03.2023 and 06.03.2023 the petitioner had remitted the
entire balance amount of Rs.7,66,41,750/- which includes TDS thereby
complying with the conditions of the auction and confirmation of sale.
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W.P.No.48158 of 2025
On 13.03.2023, the sale certificate was issued in favour of the
petitioner. Thereafter, the petitioner had got the sale certificate
registered after remitting a sum of Rs.1,12,41,860/- towards stamp duty
and registration fees, on 24.03.2023.
6. It is the case of the petitioner that after making the entire
payment and having the sale certificate registered when they had
approached the respondents to handover vacant physical possession of
nd
the property they were informed that the 2 respondent had taken steps
to take possession and hand over the same to the petitioner. The
petitioner would submit that despite receiving the entire bid amount the
respondent bank had not taken any steps to deliver vacant physical
possession to the petitioner. On 27.05.2023 and 12.06.2023, the
nd
petitioner had made representations to the 2 respondent and on
st
12.04.2023 and 12.06.2023 representations were also made to the 1
respondent demanding that vacant physical possession of the property
be granted to them.
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W.P.No.48158 of 2025
7. It is the further case of the petitioner that since no steps were
nd
taken by the 2 respondent bank to obtain vacant possession, the
petitioner had filed WP.No.7235 of 2024, seeking mandamus directing
the respondents to make an application under Section 14 of the Act
before the Chief Judicial Magistrate, for obtaining physical possession.
On 12.04.2024, when the matter had come up, the learned counsel for
nd
the 2 respondent bank had submitted that the application under
Section 14 of the Act had been filed as early as in May 2023 and the
same has been returned on account of certain defects and that after
correcting defects the same had been re-presented on 03.04.2024.
Therefore, this Court had issued a direction that the Chief Judicial
Magistrate, Krishnagiri to expeditiously decide the application on
merits not later than 4 months.
8. Thereafter, on 11.06.2024, the petitioner had once again issued
a legal notice to the respondents to handover vacant possession and
compensate the petitioner by paying the interest at 15% per annum for
the entire amount paid by them including the stamp duty and
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W.P.No.48158 of 2025
nd
registration charges. The 2 respondent bank had sent a reply stating
that the application under Section 14 had been numbered as
Crl.MP.No.4805 of 2024 on the file of the Chief Judicial Magistrate,
Krishnagiri and that they would take physical possession of the
property and handover the same to the petitioner.
9. The petitioner would submit that even after the Chief Judicial
Magistrate, Krishnagiri had passed final orders on 16.08.2024, the
respondent had not taken steps to take possession of the property from
the borrower. On enquiry, the petitioner learned that one M/s. Belvik
Infratech Systems, claiming to be a tenant of the subject property under
an unregistered lease deed dated 10.08.2024 had challenged the order
of the Chief Judicial Magistrate, Krishnagiri before the DRT II,
Chennai in SA.No.421 of 2024. The said petition was dismissed as not
maintainable on 06.09.2024.
10. Thereafter, one more entity claiming to be an unregistered
tenant had challenged the order dated 16.08.2024 made by the Chief
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W.P.No.48158 of 2025
Judicial Magistrate, Krishnagiri before the DRT II Chennai in
NDN(SA)/2735/2024. This application was also dismissed on
28.10.2024.
11. Ultimately, the petitioner was put in possession of the
property only on 31.05.2025 nearly 26 months from the date of
remittance of the entire sale price of the plot and registration charges.
The contention of the petitioner is that despite investing such a huge
amounts toward the purchase of the property, the petitioner was unable
to expand its business owing to the delay. The petitioner had
participated in the bid only with the intent of expanding their industry.
Further, the respondent bank retains the entire amount and failed to
handover the vacant physical possession of the property. After issuance
of legal notices dated 18.07.2025 and 22.07.2025 calling upon the
respondents to pay a sum of Rs.4,14,00,169.19/- towards interest at
15%, the petitioner has come forward with the present writ petition.
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W.P.No.48158 of 2025
12. The respondents have filed a counter affidavit inter alia
contending that the bank had taken effective steps to get vacant
possession of the property as soon as the petitioner had been declared
as H1 bidder. The respondents would further submit that the auction
sale had been conducted on “As is where is basis” and further several
factors / proceedings had cropped up as a result of which possession
could not be taken under Section 14 of the Act immediately. These
were beyond the control of the respondents and therefore they cannot
be called upon to pay interest on the amount which has been paid
particularly when the petitioner had participated in the bid after
knowing fully well that the auction sale was on “as is where is” basis.
They therefore sought dismissal of the writ petition.
13. Mr. V.P. Sengottuvel, learned Senior Counsel appearing on
behalf of the petitioner submits that the bank had not taken any steps
whatsoever to ensure that the vacant possession was taken immediately.
He would submit that though the sale certificate had been issued on
13.03.2023, the respondents have not moved a little finger to have the
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W.P.No.48158 of 2025
vacant physical possession handed over to the petitioner. The petitioner
had to make several representations and they had to move the Court to
set in motion the proceedings under Section 14 of the Act. Even
thereafter, the respondent bank has not immediately obtain orders of
possession.
14. The learned Senior Counsel would rely upon the judgement
of the Patna High Court in Vishal Kumar Vs. The State of Bihar and
others – Letters Patent Appeal No.615 of 2025 , in support of his case,
where, according to him, the first Bench of the Patna High Court has in
a similar set of facts directed the bank to compensate the petitioner
therein. The Bench observed that the conduct of the bank in
withholding possession for over 8 months after receiving full payment
was a case of financial prejudice to the petitioner therein. Therefore,
they awarded 6 % interest p.a on the amount for the period from
19.09.2024. With reference to the rate of interest he would rely upon
the judgements of the Hon’ble Supreme Court reported in 2007 (3)
SCC 545 – Alok Shanker Pandey Vs. Union of India and others and
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W.P.No.48158 of 2025
2025 (SCC) Online SC 419 – Dr.Poornima Advani and another Vs.
Government of NCT and another.
15. Per contra, Mr.L.Sriram appearing on behalf of M/s.Chennai
Law Firm for the respondent bank would submit that the bank had
diligently taken steps as soon as the bid was finalised. They had moved
an application under Section 14 in May 2023 which was however
returned on certain defects.
16. He would submit that after the Chief Judicial Magistrate,
Krishnagiri had allowed the petition on 16.08.2024 and appointed an
Advocate Commissioner to take physical possession of the property
immediately, the two applications came to be filed as if the petitioners
therein had entered into an unregistered lease deed with the borrower,
thereby, claiming protection. These application came to be dismissed
on the ground of maintainability itself.
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W.P.No.48158 of 2025
17. Thereafter, one of the guarantors of the applicant company
had filed a Securitisation Application in SA.No.604/2024 before the
DRT II, Chennai against the order of the Chief Judicial Magistrate,
Krishnagiri along with IA.No.268 of 2024. This application came to be
dismissed on 20.02.2025. Ultimately, on 31.05.2025 the possession of
the property was handed over to the petitioner. Therefore, he would
submit that the respondent bank cannot be called upon to pay the
compensation as demanded.
18. Heard the learned counsels on the either side and perused the
records.
19. The following dates would have bearing on the discussion:
S.No Dates Events
1 23.02.2023 Sale confirmation letter.
2 13.03.2023 Sale certificate registered.
3 12.04.2023 The petitioner requests
possession to be handed over.
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W.P.No.48158 of 2025
4 May 2023 The respondent bank makes an
application under Section 14 of
the Act before the Chief
Judicial Magistrate, Krishnagiri
for handing over the possession
which was returned for
complying with certain defects.
5 June 2023 till September
Representations were being
2023
made by the petitioner for
handing over possession.
6 11.03.2024 The petitioner filed
WP.No.7235 of 2024 for a
direction to the respondents to
make an application under
Section 14 of the Act and to
effect delivery.
7 03.04.2024 The respondents re-present the
application and the same was
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W.P.No.48158 of 2025
numbered as Crl.MP.No.4805
of 2024
8 16.08.2024 The criminal MP was allowed
and the petitioner was
permitted to take physical
possession of the property.
However, two Securitisation
applications came to be filed
by persons claiming to be an
unregistered lessee under the
borrower and the same were
dismissed on 06.09.2024 and
20.02.2025.
9 31.05.2025 The petitioner was put in
possession.
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W.P.No.48158 of 2025
20. The dates and events stated supra would clearly show that the
bank has taken steps to take possession of the property and it was
owing to certain intervening circumstances beyond the control of the
respondent bank that they were unable to handover possession of the
property, immediately.
21. A reading of the terms and conditions would throw light on
the agreement between the parties. Clause No.10 clearly states that the
intending bidders, after taking prior appointment from the authorised
officer, could inspect the immovable / movable secured assets to be
sold before the date of E - auction. This clause makes it clear that it is
the sole responsibility of the bidders to inspect and satisfy themselves
about secured assets and specifications.
22. Clause No.19 would read as follows:
The Authorized Officer will deliver the property on
the basis of Symbolic possession taken on as is where is
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W.P.No.48158 of 2025
basis, (after deducting legal charges for conveyance,
stamp duty, registration charges, other incidental charges
and taxes as applicable) to the purchaser free from
encumbrances, known to the Secured Creditor on deposit
of money by the purchaser towards the discharge of such
encumbrances.
23. Likewise, Clause No.26 would read as follows:
“The above movable / immovable secured assets will
be sold in “As is where is”, As is what is” and “whatever
there is” condition.
24. Therefore, from the very terms and conditions of the auction
it is clear that the bank had apprised the purchasers that they were
purchasing the property in “As is where is”, As is what is” and
“whatever there is” condition. The bank has only taken symbolic
possession of the property. Therefore, while submitting their bid the
petitioner was very much aware of the fact that possession of the
property was not with the bank and that the bank would not
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W.P.No.48158 of 2025
immediately hand over possession to the petitioner.
25. It is also seen that in May 2023, within two months of the
petitioner being issued with sale certificate, application under Section
14 of the Act had been filed by the bank before the Chief Judicial
Magistrate, Krishnagiri. Further, in the sale certificate dated
13.03.2023, it has been stated that constructive possession had been
taken by the bank. The said clause reads as follows:
“AND WHEREAS the possession notice
issued an 13.07.2016 and 06.10.2016 and constructive
possession of the below mentioned property has been
taken by the Authorised Officer of the Corporation Bank
and the Authorised Officer had issued auction notice
dated 01.02.2023. As such the Union Bank of India
(Erstwhile Corporation Bank) the secured mortgagee has
become entitled to sell the aforesaid property to any
purchaser.”
26. Further, in their letter dated 26.09.2023, the bank had brought
to the notice of the petitioner that the borrower was referred to NCLT
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W.P.No.48158 of 2025
on 19.09.2022 by orders in CP (IB) 52 (CHE) 2022. As no resolution
plan had been received the corporate debtor had been referred to
liquidation and liquidation proceedings were filed by the Resolution
Professional on 24.07.2023. The letter would further state that the bank
had given necessary instructions to the Revolution Professional to
proceed for the sale of plant and machinery. Therefore, the petitioner
had been put on notice about all these third party proceedings. Since
these proceedings were pending, the respondent bank was not in a
position to hand over possession of the property to the petitioner. All of
these were beyond the control of the respondent bank.
27. The Judgement of the Patna High Court may not apply to the
facts of this case as in the case before the Patna High Court, the delay
was purely attributable to the bank. However, in the instant case the
bank has taken sincere efforts to take possession of the property and it
is only on account of intervening circumstances that they were not in a
position to hand over possession to the petitioner.
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W.P.No.48158 of 2025
28. Therefore, the claim of the petitioner cannot be sustained and
accordingly this writ petition is dismissed. No costs.
27.10.2026
kan
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W.P.No.48158 of 2025
To
1. The Union Bank of India,
Managing Director and DEO,
Union Bank Bhawan,
239, Vidhan Bhavan Marg,
Nariman Point,
Mumbai - 400 021
2. The Union Bank of India
Stressed Assets Management Branch,
Represented By its Authorised Officer,
No.38 & 39 Whites Road,
Royapettah,
Chennai-600 014
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W.P.No.48158 of 2025
P.T.ASHA, J.,
kan
W.P.No.48158 of 2025
27.10.2026
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