Madras HC considers mandamus for interest on bid amount, stamp duty, and registration fees under SARFAESI Act

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Published 29 October 2026

Bottom Line Up Front (BLUF)

In Elakayem Auto Ancillaries (P) Ltd. v. The Union Bank Of India, decided on 2026-10-27, the Madras High Court considered a writ petition seeking mandamus to direct the respondent bank to pay 15% p.a. interest on the petitioner's payments for bid amount, stamp duty, and registration fees, totalling Rs. 4,14,00,169.19, under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

Ratio Decidendi · Legal Principle Established

The legal principle under consideration is whether a writ of mandamus can be issued to compel a bank to pay interest on amounts remitted by a bidder in a SARFAESI auction, specifically for bid amount, stamp duty, and registration fees, from the date of payment until a specified date.

Practice & Procedural Impact for Advocates

Advocates should assess whether the facts of a SARFAESI auction dispute warrant a writ petition for compensation in the form of interest. Litigants should meticulously document all payments made towards bid amounts, stamp duty, and registration fees in SARFAESI proceedings to support claims for interest.

Key Legal Takeaways

1A writ petition sought mandamus for interest on payments made in a SARFAESI auction.
2The petitioner claimed interest at 15% p.a. on the bid amount, stamp duty, and registration fees.
3The total amount claimed as interest was Rs. 4,14,00,169.19.
4The bank had invoked SARFAESI provisions after the borrower defaulted.
5Notices under Section 13(2) and Rules 8 & 9(1) of the SARFAESI Act were issued.

The Legal Issue Elakayem Auto Ancillaries (P) Ltd. filed a writ petition before the Madras High Court seeking a mandamus to direct the Union Bank of India to compensate them by paying interest at 15% per annum. This interest was sought on payments made by the petitioner towards the entire bid amount, stamp duty, and registration fees, from the date of payment until May 30, 2025. The total amount quantified for this claim was Rs. 4,14,00,169.19.

Court's Reasoning The petitioner's case stemmed from a property auction conducted by the Union Bank of India under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The property originally belonged to D.P. Sadhu, Director of Devas Engineering Systems Private Limited, which had availed credit facilities from the respondent bank by mortgaging its properties. Upon default, the bank invoked the SARFAESI Act, issuing notices under Section 13(2) to the borrower and guarantors. Subsequently, the property was brought to sale after following the procedures outlined in Rules 8 and 9(1) of the relevant Rules under the Act.

What Follows The Madras High Court is considering whether to issue the requested mandamus. The outcome will determine if the Union Bank of India is directed to pay the claimed interest of Rs. 4,14,00,169.19 to Elakayem Auto Ancillaries (P) Ltd. The decision will clarify the extent of a bank's liability for interest on payments made by bidders in SARFAESI auctions under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.