Restitution on invalid auction sale includes interest on refunded deposit for the period of wrongful retention.

Where an auction sale is set aside for procedural illegality, restitution may require payment of reasonable interest on the purchaser's refunded deposit for the period the money was retained without fault on his part. The Court treated the auction consideration as refundable because the sale could not be sustained and held that fairness warranted compensation for the blocked funds. Simple interest at 9% per annum was directed from the date of deposit until release of the amount, payable by the revenue authority.

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Issues: Whether the auction purchaser was entitled to interest on the amount deposited by him and later directed to be refunded after the auction sale was held illegal.

Analysis: The auction sale had been invalidated for non-compliance with the prescribed recovery procedure, and the purchaser's money remained blocked for several years without any fault on his part. The denial of interest by the High Court was revisited in the limited appeal, and it was held that once the auction consideration was refundable because the sale could not be sustained, fairness required compensation for the period during which the amount was retained. Simple interest at the rate of 9% per annum was therefore directed from the date of deposit until release of the amount, payable by the concerned revenue authority.

Conclusion: The auction purchaser was held entitled to simple interest at 9% per annum on the refunded auction amount.

Ratio Decidendi: Where an auction sale is set aside for procedural illegality and the purchaser's money has remained with the State without fault on his part, restitution includes payment of reasonable interest on the deposited amount for the period of retention.

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