Supreme Court Outlines Principles Governing Exercise of Jurisdiction under Article 227  ||  Supreme Court Grants Anticipatory Bail to Pawan Khera in an FIR Filed by Assam Police  ||  SC Issues Guidelines on Summary Judgment in Commercial Suits under Order XIII-A CPC  ||  J&K&L High Court: Post-Conviction NDPS Bail Cannot Rest on Long Incarceration Alone  ||  Gauhati HC: Promotion Cannot be Withheld Merely Because Investigation is Pending Without Chargesheet  ||  Kar HC: Preventive Detention under Goonda Act Cannot Rest on Offences Committed During Juvenile Age  ||  Bombay HC: National Security Justifies Denial of Police Clearance Certificate  ||  Bombay HC: Comic Remarks Without Malicious Intent Not Religious Insult  ||  J&K&L High Court: Scandalous Allegations Against Judicial Officers in Pleadings Impermissible  ||  P&H HC: Writ Petition Against Private Trust's Contractual Employment Dismissed    

Celir LLP Vs. Bafna Motors (Mumbai) Pvt. Ltd. and Ors. - (Supreme Court) (21 Sep 2023)

Right of the borrower to redeem the secured asset stands extinguished, once the auction notice is published

MANU/SC/1042/2023

Commercial

Present appeals are at the instance of an auction purchaser left high and dry by the Respondents and is directed against the common judgment and order passed by the High Court by which the High Court allowed the writ petition filed by the borrowers and thereby directed the Bank to permit the borrowers to redeem the mortgage of the secured asset more particularly after the auction proceedings attained finality.

Once the auction notice is published in accordance with Section 13(8) of the SARFAESI Act, 2002, then unless and until the auction is held to be bad and illegal in the facts of the case, the right of redemption of mortgage is not available to the borrower.Bank is duty bound to follow the provisions of the law as any other litigant. The High Court was not justified in exercising its writ jurisdiction under Article 226 of the Constitution more particularly, when the borrowers had already availed the alternative remedy available to them under Section 17 of the SARFAESI Act.The confirmation of sale by the Bank under Rule 9(2) of theSecurity Interest (Enforcement) Rules, 2002 invests the successful auction purchaser with a vested right to obtain a certificate of sale of the immovable property in form given in appendix (V) to the Rules i.e., in accordance with Rule 9(6) of the SARFAESI.

The borrower's right of redemption did not stand terminated on the date of the auction sale of the secured asset itself and remained alive till the transfer was completed in favour of the auction purchaser, by registration of the sale certificate and delivery of possession of the secured asset. However, the amended provisions of Section 13(8) of the SARFAESI Act, make it clear that, the right of the borrower to redeem the secured asset stands extinguished thereunder on the very date of publication of the notice for public auction under Rule 9(1) of the Rules of 2002. In effect, the right of redemption available to the borrower under the present statutory regime is drastically curtailed and would be available only till the date of publication of the notice under Rule 9(1) of the Rules of 2002 and not till the completion of the sale or transfer of the secured asset in favour of the auction purchaser.

The Bank after having confirmed the sale under Rule 9(2) of the Rules of 2002 could not have withhold the sale certificate under Rule 9(6) of the Rules of 2002 and enter into a private arrangement with a borrower.The High Court under Article 226 of the Constitution could not have applied equitable considerations to overreach the outcome contemplated by the statutory auction process prescribed under the SARFAESI Act.The impugned judgment and order passed by the High Court is set aside. Appeal allowed.

Tags : AUCTION SALE   PROCEEDINGS   RIGHT  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved