1. Loan default — SARFAESI proceedings — Auction of secured asset — Issuance of Sale Certificate — Challenge to sale and claim for redemption under Section 13(8), SARFAESI Act. (Para 5 , 8 , 9 , 11 , 14 , 17 , 18 , 26 , 29 )
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2025 Supreme(SC) 1723
SUPREME COURT OF INDIA
J.B. PARDIWALA, R. MAHADEVAN, JJ.
M. Rajendran & Ors. – Appellants
Versus
M/s KPK Oils And Protiens India Pvt. Ltd. & Ors. – Respondents
Civil Appeal No. 12174 of 2025 [Arising out of Special Leave Petition (Civil) No. 11068 of 2023] With Civil Appeal No. 12175 of 2025 [Special Leave Petition (Civil) No. 14696 of 2023]
Decided on : 22-09-2025
Advocates appeared:
For the Petitioner(s): Mr. K. S. Mahadevan, Adv. Ms. Swati Bansal, Adv. Mr. R. Rangarajan, Adv. Mr. Aravind Gopinathan, Adv. Mr. Rajesh Kumar, AOR Ms. Praveena Gautam, AOR Mr. Vijay Balu S B, Adv. Mr. Pawan Shukla, Adv. Ms. Tissy Annie Thomas, Adv. Mr. Rohan Bansla, Adv.
For the Respondent(s): Mr. S. Gowthaman, AOR Mr. S. Thananjayan, AOR Mr. K. S. Mahadevan, Adv. Ms. Swati Bansal, Adv. Mr. R. Rangarajan, Adv. Mr. Aravind Gopinathan, Adv. Mr. Rajesh Kumar, AOR Ms. Praveena Gautam, AOR Mr. Vijay Balu S B, Adv. Mr. Pawan Shukla, Adv. Ms. Tissy Annie Thomas, Adv. Mr. Rohan Bansla, Adv.
For the Petitioner(s): Mr. K. S. Mahadevan, Adv. Ms. Swati Bansal, Adv. Mr. R. Rangarajan, Adv. Mr. Aravind Gopinathan, Adv. Mr. Rajesh Kumar, AOR Ms. Praveena Gautam, AOR Mr. Vijay Balu S B, Adv. Mr. Pawan Shukla, Adv. Ms. Tissy Annie Thomas, Adv. Mr. Rohan Bansla, Adv.
For the Respondent(s): Mr. S. Gowthaman, AOR Mr. S. Thananjayan, AOR Mr. K. S. Mahadevan, Adv. Ms. Swati Bansal, Adv. Mr. R. Rangarajan, Adv. Mr. Aravind Gopinathan, Adv. Mr. Rajesh Kumar, AOR Ms. Praveena Gautam, AOR Mr. Vijay Balu S B, Adv. Mr. Pawan Shukla, Adv. Ms. Tissy Annie Thomas, Adv. Mr. Rohan Bansla, Adv.
The right of redemption under Section 13(8) of the SARFAESI Act is extinguished upon the publication of the auction notice, affirming that redeemed rights exist until that point.
Headnote:(A) SARFAESI Act, 2002 - Section 13(8) - Right of redemption - Amended provisions stipulate that the borrower's right to redeem the secured asset is extinguished upon publication of auction notice - The High Court quashed the Sale Certificate issued to auction purchasers after the borrowers tendered dues even post-auction. - Court reiterated the principle that right of redemption is a statutory right which is available until the sale certificate is executed - The auction purchaser's vested rights cannot be compromised by the borrower's late tendering of dues. (Paras 126-130)
(B) Constitutional Law - Writ Jurisdiction - The High Court should not interfere in matters under the SARFAESI Act when an alternative statutory remedy is available. The confirmation of sale confers vested rights upon the auction purchaser. (Paras 110-110.2)
Judgement Key Points
The legal position is that once the sale is confirmed and a sale certificate is issued, the auction purchaser acquires vested rights protected by law. The bank cannot unilaterally cancel or revoke the auction after confirmation and issuance of the sale certificate without a valid legal basis and following due process (!) (!) . Any cancellation at this stage would be impermissible unless justified by exceptional legal grounds, as the process and finality of the auction are integral to the purchaser’s rights (!) .
Legal Category Hierarchy
- banking law
- property law
- practice and procedure
Table of Contents
2. Appellants claim right of redemption extinguished upon auction notice publication; Borrowers argue amendment is not retrospective and redemption is available until registration of sale. (Para 33 , 35 )
3. The 2016 amendment curtailed redemption rights; SARFAESI Rules envisage a single composite notice of sale; the Act is a remedial statute applying to alive claims. (Para 55 , 84 , 95 , 96 , 103 , 104 , 105 , 106 , 107 , 108 , 109 , 110 , 111 , 112 , 113 , 114 , 115 , 116 , 117 , 118 , 119 , 120 , 121 , 122 , 123 , 124 , 125 , 126 , 127 , 128 , 129 , 130 , 131 , 132 , 133 , 134 , 135 , 136 , 137 , 138 , 139 , 140 , 141 , 142 , 143 , 144 , 145 , 146 , 147 , 148 , 149 , 150 , 151 , 152 , 153 , 154 , 155 , 156 , 157 , 158 , 159 , 160 , 161 , 162 , 163 , 164 , 165 , 166 , 167 , 168 , 169 , 171 , 172 , 173 , 174 , 175 , 176 , 177 , 179 , 180 , 181 , 182 , 183 , 184 , 185 , 186 , 187 , 188 , 189 , 190 , 191 , 192 , 193 )
4. Right of redemption under amended Section 13(8), SARFAESI Act, is extinguished on the date of publication of notice for public auction or other transfer modes. (Para 100 , 170 , 178 )
5. Appeals allowed — High Court judgment and order set aside. (Para 202 )
6. When is the right of redemption extinguished under the amended Section 13(8) of the SARFAESI Act?
The right of redemption is extinguished on the date of publication of the notice for public auction, inviting quotations, or tender from public or private treaty for transfer of the secured assets. (Para 84 , 100 , 170 )
7. Does the 2016 amendment to Section 13(8) of the SARFAESI Act apply retrospectively to loans obtained before the amendment?
Yes, as a remedial statute intended for speedy recovery, the amendment applies to all alive claims. If the auction notice is issued after the amendment, the amended provision governs regardless of the loan's inception date. (Para 179 , 183 , 185 , 188 )
8. How should the expression publication of notice be interpreted across different modes of sale under the SARFAESI Rules?
It refers to the publication of a single composite notice of sale, which includes service to the borrower, newspaper publication, affixation on the property, and uploading on the website, as applicable to the chosen mode of sale. (Para 156 , 161 , 177 , 178 )
9. Are separate notices required under Rule 8(6) and Rule 9(1) of the SARFAESI Rules?
No, the rules envisage a single composite notice of sale. Rule 9(1) merely references the notice required under Rule 8(6), and both can be served and published simultaneously. (Para 142 , 152 , 163 , 168 , 169 )
JUDGMENT :
J.B. PARDIWALA, J.:
For the convenience of the exposition, this judgment is divided into the following parts: -
| INDEX |
| I. FACTUAL MATRIX |
| A. Proceedings before the DRT |
| II. IMPUGNED ORDER |
| III. SUBMISSIONS OF THE PARTIES |
| A. Submissions on behalf of the appellants. |
| B. Submissions on behalf of the borrowers. |
| IV. ISSUE FOR DETERMINATION |
| V. ANALYSIS |
| A. Legislative History and Scheme of the SARFAESI Act. |
| i. The impetus behind enactment of the SARFAESI Act. |
| ii. Relevant Statutory Provisions at Play. |
| B. Section 13 (8) of the SARFAESI Act and the Decision of this Court in Bafna Motors |
| i. Factual Scenario in Bafna Motors |
| ii. Ratio of the Decision in Bafna Motors |
| a. Position of Law prevailing prior to the Amendment of Section 13 (8) of the SARFAESI Act. |
| b. The 2016 Amendment to Section 13 (8) of the SARFAESI Act and the Contradictory Views on the subject |
| c. Effect of the 2016 Amendment on the Right of Redemption under Section 13(8) of the SARFAESI Act. |
| C. How the decision of this Court in Bafna Motors should be understood? |
| i. There cannot be any artificial distinction in the right of redemption under Section 13 (8) of the SARFAESI Act for different modes of transfer |
| a. Scheme for sale of Immovable Secured Asset under Section 13 (8) of the SARFAESI Act read with Rule(s) 8 and 9 of the SARFAESI Rules |
| ii. There is only a single Notice of Sale required under Rule 8 (6) of the SARFAESI Rules for transfer of secured asset, by lease, assignment or sale. |
| a. Contradictory Views of the High Court on the subject |
| b. The Scheme under the SARFAESI Rules envisages one single composite Notice of Sale of Immovable Secured Asset |
| iii. What is the import of the expression “before the date of publication” used |
| in Section 13 (8) of the SARFAESI Act. |
| D. Whether, the Amended Section 13 (8) of the SARFAESI Act is retrospective in nature? |
| VI. FINAL CONCLUSION |
1. Leave granted.
2. Since the issues raised in both the captioned appeals are the same and the challenge is also to the self-same judgment and order passed by the High Court, those were taken up for hearing analogously and are being disposed of by this common judgment and order.
3. These appeals arise from the judgment and order passed by the High Court of Judicature at Madras dated 24.04.2023 in Writ Petition No. 1882 of 2023 with Writ Miscellaneous Petition Nos. 1987-1988 of 2023 respectively by which the High Court allowed the writ petition filed by the respondent Nos. 1 to 4 respectively herein and thereby the Sale Certificate issued by the respondent No. 5 in favour of the appellants (Auction Purchasers) dated 22.03.2021 came to be quashed and the respondent No. 5 Bank was directed to permit the respondent Nos. 1 to 4 herein to redeem the mortgage and close the loan account of the borrowers.
I. FACTUAL MATRIX
4. For the sake of convenience, the appellants herein shall be referred to as the Auction Purchasers. The respondent Nos. 1 to 4 respectively hereinafter referred to as the Original Borrowers and the respondent No. 5 shall hereinafter be referred to as the Bank.
5. The borrowers availed cash credit facilities on 06.01.2016 from the Bank to the tune of Rs. 5 crore and a term loan of Rs. 30 lakh respectively. The respondent Nos. 2 and 3 respectively herein stood as guarantors by creating equitable mortgage over various immovable properties including the “Subject Property” vide the Memorandum of Deposit of Title Deeds bearing Document No. 68 of 2016 dated 06.1.2016 with the Sub Registrar Office, Dharapuram for the purpose of securing the repayment of the credit facilities.
6. The description of the subject property is as under: -
“Vacant dry land to an extent of 1.92 acres in Old S.F. NO. 540, 541 and New S.F. No.476/2, Dharapuram Alangiyam Road, Chitraravuthanpalayam, Dharapuram Taluk, Triuppur District. Boundaries:
On the
