WP/8701/2026 of YERUVA PRABHAKAR REDDY Vs UNION OF INDIA on 14 October 2026

1. Union of lndia, Represented by its Secretary, Ministry of Finance, New Delhi.

2. CANARA BANK, Chennamma Circle Branch, TJ Shopping Complex, 3rd Floor, Near SBI Circle, Regional Office, Kurnool. ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate Writ, Order or Direction more particularly one in the nature of writ of Mandamus declaring the action of the Respondent No. 2 in issuing unilateral cancellation letter bearing Ref No. 8366/Prithvi/Eauctionl2026-01 dated 09.02.2026 in respect of the Flat No. 904, gth Floor, Tower 6LH, admeasuring 2489 Sq. Ft. together with parking space each admeasuring 134.55 Sft for 3 cars in the basement along with undivided share of land of 38.79 Sq. Yds., situated in Sy. No.201 of Mainkonda Jaigir Village, Rajendra Nagar Mandal, Ranga Reddy District as illegal, arbitrary, high-handed, violative of Article 14 and 300A of the Constitution of lndia, against the principle of natural justice and consequently set aside the letter bearing Ref No. 8366/Prithvi/Eauction/2026-01 dated 09.02.2026 and ciirect the Respondent to issue sale certificate in favour of the petitioner. l.A. NO: 1 OF 2026 Petition under Section i 51 cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to drrect the Respondents to maintain the status quo with respect to Flat No. g04, gth Floor, Tower 6LH, admeasuring 2489 Sq. Ft, together with parking space each admeasuring 134.55 sft for 3 cars in the basement along with undivided share of land of 38.79 sq. Yds , situated in sy No. 201 of Mainkondalaigir Viilage, Rajendra \agar Mandal, Ranga Reddy District and take any steps in furtherance of their letter :earing Ref No 8366/PrithvilEauciionl2026-ol dated og.oz.2026, pending disposal ,rf the writ petition. .A. NO: 2 OF 2026 Petition under section 151 cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to grant stay rrf the e-auction scheduled for 24.03.2026 in respect of Flat No. 904, 9th Floor, -'l-ower 6LH. admeasuring 24gg sq. Ft, together with parking space each admeasuring 134.55 sft for 3 cars in the basement along with undivided share of land of 38.79 Sq. Yds.. situated in Sy. No. 201 of Mainkondalaigir Viilage, Rajendra Itlagar [Mandal, Ranga Reddy District, pending disposal of the writ petition, C:ounsel for the Petitioner: SRI DUWA PAVAN KUMAR Counsel for the Respondent No.1: SRI MANIKONDA PRAVEEN, SC FOR CENTRAL GOVT. Counsel for the Respondent No.2: SRI DEEPAK BHATTACHARJEE, Sr. COUNSEL, REp. SRI K.V,NAGESWARA RAO The Court made the following: ORDER

HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD THE HON'BLE JUSTICE MOUSHUMI BHATTACHARYA AND THE HONOURABLE SMT JUSTICE RENUKA YARA WRIT PETITroN NO.870t oF 2026 CNR NO.HBHCO10179972026 DATE: 14.10.2o26 BETWEEN: Yeruva Prabhakar ReddY . . . Petitioner And Union of India and Another. ...Respondents N4r. Dr-r!1a Pavan Kuma;, iearned ,:tltlnsel appearing for the petitioner (Online) Mr. Deepak Uhattachalice, learned Senior Counsel appeartng for the respondent No 2,/ Canar-a llank. ORDER: (Per Hon'ble Justice lVloushunu Bhattacharya) The present $,Irit Petition tras been filed by the Aucticn Purchaser against. a callcellation letter issr';ed by the respondent No.2/Canara B,ank orr 09.02.2026'

2. Learnecl coLlrrset appeziring for the petitioner clarifies at the very outset that the only' relief which the petitioner now

seeks is for refund of an amount of Rs. 15,77 ,SOO I - paid by the petitioner to Canara Bank by way ()i' EMD along with interest

3. We have heard learned counsel appearing for the petitioner and learned Senior Counsel appearing for the lespondent No.2/Canara Bar-rk

4. The petitioner's main contention ili inat the petitioner rcmained unaware of an orcler of stafus quo passed by a learned Single Judge of this Court on 70 .12.2021 in W.P.No.33127 of 2021 , i.e., the very date on which Canara Bank auctioned the property and ii-r which r.he writ petitioner cmerged as the highest bidder.

5. Learncd counsel for the petitioner submits that the first and only communication receiverl by the petitioner from Canara Bank was the letter dated Og.O2.2026, u'hereby the Bank informed the petitioner of its decision to cancel the auction with immediate ellect on account of legal impediments and undertook to refund the Earnest Money Deposit (EMD), without interest, within 15 days from the date ofthe said letter

6. According to learned Senior Counsel appearing for Canara Bank, the Bank was constrained to cancel the auction in view of the interim order of status quo passed by the High Court on 10.12.2021. It is further submitted that the Bank is liable only to refund the amount deposited by the petitioner, without interest, as the said amount was kept in a "no-1ien" account. It is also submitted that the petitioner had farled to deposit 25o/o of the sale consideration as mandated under RuIe 9(3) of The Security Interest (enforcement) Rules, 2002 ('the 2002 Rules').

7. There are several undisputed facts which have been brought to the notice of the Court, The writ petitioner, having emerged as the successful bidder in the auction conducted on 10.12.2027, deposited the EMD amount of Rs.15,77,500/- in favour of the respondent No.2/Canara Bank. On the very same day, i.e., lo.l2.2o2l , a learned --

Single Judge of this Court passed an order of status quo on the auction.

8. Two significant facts arise in relaticn to the status quo order. First, the Borrower filed the Writ petition on 08.12.2021, and the Bank nas represented before the learned Single Judge on 10.12.2021 . Thus. the Bank had notice: of the Borron er's challenge to the auction by rvay of the Writ Petition two days before the auction. Second, there is nothing on record to indicate that the Bank communicated to the present rvrit petitioner either the filing of the Writ petition or the subsequent passing of tlne status quo order by the Court on 1O.12.2021.

9. This s'ould mean that the Bank chose not to give Notice to the u'rit petitioner of the pending Writ petition as well as the slatus quo order. The petitioner was hence preclttded from taking a decision on r,,,hether to participate in the auction. The u.rit petitioner hence participated in the auction, u'as declared the highest bidder, arld deposited the -

EMD without being aware either of the liling of the Writ Petition or of the status quo order passed by the High Court.

70. It is further significant that there is no document disclosed by the Bank in its counter which could show that the Bank even attempted to make any sort of communication with the writ petitioner between lO.).2.2021 and 09.O2.2026. Hence, the admitted position is that the Bank retained the EMD amount of Rs.15,77,5OOl- for the last 5 years without any justification. L7. The argument made on behalf of the Balk that the writ petitioner did not comply with Rule 9(3) of the 2OO2 Rules in respect of 25o/o of the sale consideration is untenable, since the writ petitioner could not have complied with the requirement of Rule 9(3) during pendency of the order of status quo passed by the High Court on 10.12.2O2I. 1? . The above facts persuade us to hold in favour of the writ petitioner. The Bank has not shown any good reason to explain why it sat over the EMD for the last 5 years and therealter offered to refund the same without interest. The o - retention of the said amount by the Bank for the substantial period of time also amounts to unjust enrichmcnt. L3. The Court is informed that the Writ petition filed by the borrow,er u'as dismissed on 09.01.2026. Thereafter, Canara Bank u,'rote the letter to the writ petitioner on 09 .02.2026. Hou,ever, this fact does r-rot absolve the Bank from its non disclosure of the status quo order to the writ petitroner as oi 10. 12.2021 . L+. W.P.No.8701 of 2026, along with erll connecred applicatrons, is accordingly allo*'ed and disposed of by directing the respondent No.2/Canara Bank to refund the amount of Rs. 15,77,500/- to the petitioner within two weeks from 16.10.20'26 along u,ith interest at 60/o per alnum from 1O.12.2021 till the date of refund. Sd/.NAGAMANI ASSISTANT REGISTRAR //TRUE COPY// SECTION OFFICER To,

1. The Secretary. Ministry of Finance, New Delhi, Union of lndia.

2. The Canara Bank, Chennamma Circle Branch TJ Shopping Complex, 3rd Floor, Near SBI Circle, Regional Office, Kurnool.

3. One CC to SRI DUWA PAVAN KUMAR, Advocate [OPUC] 4 One CC to SRI K V NAGESWARA RAO, Advocate IOPUC] 5 one CC to SRt I\,{AN|KONDA PRAVEEN, SC FOR CENTRAL GOW. tOpUCJ

6. Two CD Copies B>q \( \L "\

CC TODAY HIGH COURT DATED: ',411012026

ORDER

WP.No.8701 of 2026 ALLOWING THE WRIT PETITION, WITHOUT COSTS lt\F- ) 'A € 2m CI

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