Summary: On January 21, 2026, Justice P. Dhanabal of the Madras High Court turned down a request to temporarily stop the auction of land filed by M.S.K. Rameshraj and others against Indian Overseas Bank. The disagreement was about selling off farmland that was used as a guarantee for a loan.
M.S.K. Rameshraj, along with R. Kokila and K. Srinivasan, from Vallur Village in Thiruvallur District, sought a loan from Indian Overseas Bank in 2007 to build storage buildings on their farmland. They hoped to make extra money for their family. The bank approved a loan of Rs. 7.35 Crores, but took out a large amount for interest right away.
"The applicants signed an agreement to give the bank the rights to their property," stated the court documents.
M.S.K. Rameshraj and his co-applicants claimed they were supposed to get a government discount under the Nabard Rural Godown Scheme. However, they accused the bank of wrongly sending the discount back to Nabard without telling them.
The bank, represented by Mr. Ravi, argued that the land was no longer farmland since it was used to build storage buildings for business. They started legal actions because the loan wasn't being paid back, marking the account as overdue.
"The property was put up for auction 14 times, with the final auction concluded on July 29, 2024," the bank stated.
The properties were sold to the winning bidders, including the second respondent, Bernard Sahaya Mary, for Rs. 6,31,16,000. M.S.K. Rameshraj and his co-applicants challenged the auction in various legal places, including the Debt Recovery Tribunal and through legal petitions, but these remain unresolved.
Justice P. Dhanabal turned down the request to temporarily stop the auction, saying that M.S.K. Rameshraj and his co-applicants had not shown a strong enough case. The court emphasized that deciding whether the land is farmland or commercial land must be settled in the main trial.
"The Original Application has no merits and deserves to be dismissed," concluded Justice Dhanabal.
The main trial is scheduled for March 2, 2026. The court will further investigate the type of the property and whether the auction process was fair.
This case highlights the difficulties that arise when farmland is used as a loan guarantee and later changed for other uses, leading to legal arguments over what kind of land it is and the financial responsibilities that follow.
