Bank Ordered to Refund Buyer for Concealing Property Dispute: Telangana High Court

The Telangana High Court ruled that the Union Bank of India suppressed crucial facts and violated Rule 9 of the Security Interest (Enforcement) Rules while proceeding against a borrower’s property.

The Court directed the Bank to refund ₹2,16,25,000 to K. Indra Mohan, who had paid 25% of the sale consideration, noting that the Bank failed to disclose pending litigation concerning the property.

The Court held that the creditor’s conduct lacked transparency and breached mandatory procedural requirements under the debt recovery framework.

The Court emphasised the importance of full disclosure and fairness in enforcement actions, and set aside the Bank’s proceedings to safeguard borrower rights.

[K. Indra Mohan v Union of India]