Restitution for set-aside auction sale required interest on deposited bid money, not a flat compensation rate.

Where an auction sale was set aside on equitable grounds rather than for illegality in the conduct of the sale, the auction purchaser who had deposited the full bid amount and was kept out of its use without fault was entitled to compensation for loss of use of money. The High Court's 5% compensation direction did not apply on its terms, so interest was the proper measure of restitution. The respondent bank, at whose instance the auction had been held, was directed to pay simple interest at 6% per annum on the deposited sum from the date of deposit until actual refund, and the 5% direction was set aside.

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Issues: Whether, in the facts of a judicially set-aside auction sale, the auction purchaser was entitled to interest on the auction purchase money instead of the 5% amount directed by the High Court.

Analysis: The High Court had set aside the auction sale on equitable considerations and not because the auction was held illegal under the governing rules. The auction purchaser had deposited the entire bid amount and was kept out of the use of that money for a long period without any fault on his part. The rule relied upon by the High Court for granting 5% compensation did not apply on its own terms, and the purchaser was therefore entitled to be compensated in a manner that matched the loss of use of money. In these circumstances, interest on the deposited amount was the appropriate form of compensation, payable by the respondent bank at whose instance the auction had been conducted.

Conclusion: The auction purchaser was entitled to simple interest at 6% per annum on the deposited sum from the date of deposit till actual refund, and the direction to pay only 5% of the bid amount was set aside.

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