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SARFAESI: Deposit of amount by the borrower can only be before the date of publication of notice for auction; SC.

Supreme Court of India

Justice A. M. Khanwilkar and Justice Ajay Rastogi

It was held by the SC {Shakeena & Anr v. Bank of India & Ors.} in the present case, the appellants have failed to exercise their right of redemption in the manner known to law, muchless   until   the  registration of the  sale   certificate   on   18th September, 2007. It was held that hence no relief  can be granted to the appellants, assuming that the appellants are right in contending that as per the applicable provision at the relevant time (unamended) Section 13(8) of the 2002 Act), they could have exercised their right of redemption until the  registration of the sale certificate – which, indisputably, has already happened on 18th  September,   2007.   Therefore,   it   is   not   possible   to countenance   the  plea   of   the   appellants   to   reopen   the   entire auction process. It was held that the narrative of the appellants that they had made a valid tender towards the subject loan accounts before registration of the sale certificate, has been found to be tenuous. Thus understood, it was held that their right of redemption in any case stood obliterated on 18th September,  2007. 

Further, it was held that the amended Section 13(8) of the 2002 Act which has come into force w.e.f. 1st September, 2016, will now stare at the face   of the appellants. It was held by the SC as per the amended provision, stringent condition has  been   stipulated   that   the   tender   of   dues   to   the   secured creditor together with all costs, charges and expenses incurred by him shall be at any time before the “date of publication of notice” for public auction or inviting quotations or tender from public or private deed for transfer by way of lease assessment or sale of the secured assets. That event happened before the institution of the subject writ petitions by the appellants. 

In view of above, the petition of the borrower was dismissed by the SC, upholding the sale to auction purchaser.

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