Authority: High Court of Odisha at Cuttack
Order Date: 21 September 2026
Case Overview
- Appellants: Union Bank of India, Mumbai; Respondent: Neelamadhav Sahu.
- The dispute arose from the refund of an Earnest Money Deposit (EMD) of Rs 40,00,000 deposited by the respondent on 22 September 2021 for an auction where he was the second‑highest bidder; the auction was awarded to the highest bidder and the respondent’s EMD was to be refunded.
- The Single Judge in W.P.(C) No.7930 of 2025 ordered the bank to refund the EMD on 12 March 2024 and directed interest at 12% per annum from the date of deposit until refund, with a higher rate of 15% if the bank failed to refund within one month of the order.
- The bank appealed, arguing it was not at fault because the auction was stayed by the Debt Recovery Tribunal (DRT) and that the applicable interest rate should be the prevailing Fixed Deposit rate for nationalised banks (6‑8%).
- The respondent relied on Govinda Kumar Sharma & Ors. v. Bank of Baroda (2024) where the Supreme Court had ordered 12% interest in a similar context.
Final Outcome
- The Division Bench (Justices B.P. Routray and Savitri Ratho) held that the DRT stay did not justify retaining the EMD, as the DRT had not directed any interference with the EMD refund.
- While affirming the principle that interest is payable for the period the amount remained with the bank, the Court modified the interest rate, fixing it at 7% per annum, reflecting the prevailing Fixed Deposit rates (6‑8%) at the relevant time.
- The order of the learned Single Judge regarding interest at 12% (and 15% thereafter) was therefore altered to 7% per annum.
- The writ appeal was disposed of.
Topics: Court Judgment, Banking Interest, EMD Refund