Judicial Analysis Court Copy Headnote Facts Arguments Court observation

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.

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 (!) .

Table of Content
1. factual background of the case. (Para 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25)
2. judgment of the high court regarding redemption rights. (Para 26 , 29 , 30 , 31)
3. arguments presented by both parties. (Para 33 , 34 , 35 , 36)
4. interpretation of section 13(8) of sarfaesi act. (Para 54 , 60 , 101 , 110)
5. final order and directions of the court. (Para 202 , 203)

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 M