Right of redemption under SARFAESI Act extinguishes on publication of auction notice; DRT cannot thereafter set aside auction and permit effective redemption, rendering such order without jurisdiction and directly challengeable by writ.

JUDGMENT :

Manish Pitale, J.

A bank and an auction purchaser are before this Court in these two writ petitions to challenge an order passed by the Debt Recovery Tribunal-III, Mumbai (DRT), whereby an auction conducted by the petitioner bank, wherein the auction purchaser was successful in its bid, has been set aside and the petitioner bank has been directed to take steps afresh. The order was passed in an interim application filed by the respondent guarantors in their pending securitisation application. The petitioners have directly filed these writ petitions without resorting to the remedy of filing appeals before the Debt Recovery Appellate Tribunal (DRAT), claiming that the impugned order passed by the DRT is without jurisdiction as it is in the teeth of the provisions of the SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT , 2002 (for short 'Securtisation Act') and judgements of the Supreme Court. It is further claimed that the DRT has granted relief beyond the prayers made in the interim application and also in the final prayers made in the securitisation application by the respondent guarantors. It is also claimed that by the impugned order, the DRT has virtually granted final relief at interim stage and that too in the teeth of the settled position of law. Before considering the rival submissions, it would be appropriate to first refer to the chronology of events leading upto filing of these two writ petitions. The respondent Ritu Automobiles Private Limited, presently in liquidation, is the borrower while respondents Manoj Lalwani and Ritika Lalwani are the guarantors. They are being referred to hereinafter as the borrower and the guarantors respectively.

2. The borrower availed loan facilities from the petitioner HDFC Bank Limited and for that purpose created equitable mortgage on the subject property. The property is located in Survey No.125 in Village Gove, Taluka Bhiwandi, District Thane, Maharashtra. On 21.10.2019, the petitioner bank classified the aforesaid loan account of the borrower as a non-performing asset (NPA) and in that context, issued recall notice to the borrower on 05.11.2019. In response thereto, the borrower claimed that it would clear the dues along with interest by selling the subject property and that a buyer had been identified. Since no further steps were taken by the borrower, on 16.01.2020, the petitioner bank issued notice under Section 13(2) of the Securitisation Act and recorded that there was a mortgage created over the subject property. As required by law, the borrower as well as the guarantors were served with the aforesaid notice. Since no steps were taken by the borrower and the guarantors and they did not raise any objection to the said notice, on 10.09.2020, the petitioner bank issued symbolic possession notice in respect of the subject property. The said notice was also published in two newspapers and thereafter the petitioner bank issued a demand notice to the respondent borrower with respect to a specific amount along with interest. A valuation report was obtained on 01.10.2021 and in this backdrop, in March 2022, the petitioner bank filed a petition before the National Company Law Tribunal (NCLT) for initiating insolvency resolution process in the context of the respondent borrower. The NCLT admitted the said petition and eventually on 10