Rockline Construction entitled to interest on auction bid deposit, says SC

07 May 2024 8:19 AM

By: Admin

On 24 April 2023 , The Supreme Court has issued a clarification regarding the interest rate on the refund of a disputed property sale in the case of Rockline Construction Company v. Doha Bank QSC & Ors. The applicant had sought clarification of the court’s earlier order upholding the setting aside of a property sale by the Debt Recovery Appellate Tribunal, Mumbai. The sale was confirmed in favour of Rockline Construction Company in May 2007, but later set aside. The applicant had requested the interest rate on the amount deposited in 2007 be fixed, along with any mesne profit to be deducted from the refunded amount.

The court clarified that the applicant was entitled to interest on the refunded amount, but left the rate and terms of interest to be determined by the appellate authority, as the appeal was still pending before the Debt Recovery Appellate Tribunal. The court stated that it would normally have decided the matter itself, but decided to allow the adjudicatory authority to decide the matter expeditiously and in accordance with the law. The court also rejected the plea of limitation on the grounds of the long-standing pending litigation between the parties.

The case has a chequered history, with multiple orders and long-standing litigation between the parties. The order of the Debt Recovery Appellate Tribunal, Mumbai, from 2014, had allowed Rockline Construction Company to withdraw the entire sale amount with accrued interest, after deducting mesne profits or losses. The Recovery Officer-I, Mumbai Debt Recovery Tribunal No.1, later held that Rockline Construction Company was entitled to simple interest of 9% per annum, rather than the interest rate claimed by the company, based on the market practice at which the rate of interest is charged for commercial transactions, which is 14.5% with monthly rests.

ROCKLINE CONSTRUCTION COMPANY

DOHA BANK QSC & ORS.