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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ANU SIVARAMAN, VIJAYKUMAR A.PATIL
T.S. Nataraj S/o Late C. Shivakumar – Appellant
Versus
State Bank of India, Represented by its Chief Manager, Bengaluru – Respondent
JUDGMENT :
VIJAYKUMAR A. PATIL, J.
1. This intra Court appeal is filed under Section 4 of the Karnataka High Court Act, 1961, challenging the order dated 14.12.2022 passed the learned Single Judge in W.P.No.19756/2021.
2. Brief facts leading to the filing of this appeal are that the appellants applied for loan with respondent No.1- Bank, wherein the cash credit limit of Rs.2,00,00,000/- and term loan of Rs.30,00,000/- was sanctioned. Thereafter, the account of the appellants became a Non-Performing Asset (NPA) due to non-repayment of loan amount. Thereafter, respondent No.3 issued notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as 'The Act' for short) and the possession of the secured asset was symbolically taken under Section 13(4) of the Act. The respondent No.3-Bank issued notice to auction the property fixing the reserve price of the property as Rs.9,37,00,000/-. The action of the bank was assailed by appellants in S.A.No.174/2018 and S.A.No.212/2019. Both the applications were dismissed by the Debt Recovery Tribunal (DRT) on 31.10.2020. The respondent No.1-Bank issued
The right to redeem mortgaged property under the SARFAESI Act is extinguished once the auction notice is published, indicating no entitlement to challenge the sale thereafter.
The mortgagor's right of redemption under the amended Section 13(8) of the SARFAESI Act is extinguished upon publication of the auction notice.
The right to redeem mortgaged property under Section 13(8) of the SARFAESI Act is extinguished upon the publication of a sale notice, as amended in 2016.
The court established that the right of redemption under the SARFAESI Act is extinguished upon the issuance of a sale certificate, and timely challenge to bank actions is essential.
Court ruled that non-compliance with SARFAESI rules voided sale; observed that the rights of borrowers can be waived through their conduct and failure to assert them timely.
The borrower's right to redeem the mortgage continues until the sale certificate is issued, and the OTS Policy applies retroactively, preventing the bank from proceeding with the sale.
The main legal point established in the judgment is the interpretation of Rule 9(4) and 9(5) of the Security Interest (Enforcement) Rules, 2002, highlighting the requirement for the purchaser to pay ....
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