The right of redemption under SARFAESI Act is extinguished after the issuance of a sale certificate, rendering claims by lessees during such proceedings legally unsustainable.

JUDGMENT :

D. KRISHNAKUMAR, J.

1. Challenging the sale certificate issued by the first respondent in favour of the third respondent in pursuant to the order passed by the Chief Judicial Magistrate, Chengalpattu dated 14.07.2022 in CMP.No.5208 of 2022, the present writ petition has been filed.

2. Brief facts of the case reads as follows:

2.1. The petitioner is carrying on the business of Man Power Service and the land belonging to the second respondent was leased out to the petitioner and a lease agreement was also executed between the petitioner and the second respondent, which expires on 14.01.2025.

2.2. The second respondent had availed a term loan of Rs.5,32,00,000/- between the years 2011 to 2013, by mortage of properties from the first respondent bank for putting up additional construction. Since the second respondent had defaulted in repayment of loan, the first respondent/bank had initiated proceedings under the SARFAESI Act, 2002 against the mortgaged properties by issuing a demand notice on 18.01.2019 under Section 13 (2) of the SARFAESI Act and symbolic possession was also taken by the first respondent on 05.12.2019. Thereafter e-auction notice was issued on 11.03.2021.

2.3. The third respondent had participated in the e-auction and became the successful bidder and consequently a Sale Certificate dated 04.05.2022 was issued in favour of the third respondent. However, the possession of the mortgaged property i.e., secured assets in respect of the term loan was with the second respondent. The second respondent by supressing the fact of mortage subsisting with the first respondent bank had entered into a lease agreement with the petitioner for the period from 15.01.2021 to 14.01.2023 (for 3 years) which was subsequently renewed for another two years upto 14.11.2025 and received a sum of Rs.2 Crores.

2.4. According to the petitioner, eventhough the lease in respect of the mortgage property was created after the mortgage between the first respondent and the second respondent, the petitioner's right to hold or keep possession of the property is protected under Section 65A of the Transfer of Property Act and Section 17 (4A) of the SARFAESI Act, 2002. According to the petitioner, the respondent Bank without ascertaining who is in possession of the mortgaged property and without issuing notice to them, had auctioned the mortgaged property through e-auction on 10.01.2020 and 09.02.2021, despite the fact that the petitioner as a lessee is in possession and enjoyment of the property. The respondent Bank has filed CMP.No.5208 of 2022 before the Chief Juducial Magistrate, Chengalpattu and obtained an order on 14.07.2022 in and by which warrant was issued to the Advocate Commissioner, but the same has not been executed since the petitioner is in possession of the property and hence, he has filed the instant writ petition with the aforesaid relief.

3. The first respondent Bank has filed a counter affidavit refuting the averments made in the writ petition by stating that when the writ petition came up for admission on 21.08.2024, the respondent Bank has informed the Court that physical possession of the property was taken over by the first respondent through the Advocate Commissioner appointed in the application filed under Section 14 of the SARFAESI Act by the Hon'ble Chief Judicial Magistrate, Chengalpattu and the same has been handed over to the Auction Purchaser / third respondent. It is further stated in the counter affidavit that in pursuant to the warrant issued by the Hon'ble Chief Judicial Magistrate, Chengalpattu in CMP.No.5208 of 2022, the Advocate Commissioner along with the assistance of