The right of redemption under the SARFAESI Act extinguishes upon publication of an auction notice, and guarantees against the actions of secured creditors must follow established procedures before invoking High Court jurisdiction.

JUDGMENT :

1. Heard Mr. S.K. Dalai, learned counsel appearing on behalf of the Petitioner and Mr. Balakrishna Rao, learned counsel representing the O.P. Nos. 2 & 3, Bank (hereinafter referred to as ‘the Bank’).

2. Challenge in this writ application has been made to the action of the O.P. Nos. 2 & 3, Bank in proceeding with the e- auction sale notice dated 12.08.2021 under Annexure-8, and consequential actions thereto, and for having not settled the loan account of the Petitioner.

3. The background facts of the case are that the wife of the Petitioner obtained a loan from O.P. Nos. 2 & 3, Bank which was extended to her in cash credit loan form limiting the amount to Rs. 30,00,000/- for the purpose of expansion of her business. The Petitioner was the guarantor of the said loan and presented his property with the Bank to secure the loan. The description of property submitted by the Petitioner before the Bank to secure loan was a residential plot measuring an area Ac. 0.055D out of total area Ac. 0.090D vide Plot No. 309 corresponding Plot No. 309/3387, Khata No. 644/263 corresponding to Hal Khata No. 644/1579, situated at Mouza: Bhubaneswar Sahar Unit No. 34, Meherpalli, P.S.: Laxmisagar, Bhubaneswar, Tahasil: Bhubaneswar, Dist.: Khorda. After obtaining the loan, the wife of the Petitioner i.e. the Borrower, invested it for her business but as the business did not run well she could not repay the loan smoothly to the satisfaction of the Bank. As a result, the loan account became a Non-Performing Asset (NPA) on 28.11.2018 in terms of the agreement as well as the guideline issued by the Reserve Bank of India (RBI) in that respect.

The O.P. Nos. 2 & 3, Bank accordingly issued a notice u/s 13(2) of the SARFAESI Act, 2002 (hereinafter referred to as ‘the Act’) under Annexure-1 dated 15.02.2019. Subsequent to the issuance of the notice under Section 13(2) as the Petitioner did not come forward to comply with the direction, the Bank issued notice under section 13(4) of the Act. It is alleged by the Petitioner that no such notice was served upon the Petitioner’s wife as she was staying with her father and she had no scope to be aware of this fact. So, she could not inform the same to the Petitioner who was staying away from his wife. According to the Petitioner, another notice was issued on 29.07.2019 by the O.P. Nos. 2 & 3 – Bank wherein it was indicated that the Bank has redeemed the secured asset i.e. the immovable property in pursuance to the last notice and thereby the Bank took the symbolic possession. The claim of the Petitioner is that all the events took place behind the back of the Petitioner. However, again the O.P. Nos. 2 & 3, Bank issued a letter on 03.12.2019 individually upon the wife-borrower and the Petitioner, thereby, the Petitioner and the borrower could know that the Bank has initiated proceedings against the loan account which is at its fag end. It is only thereafter that the Petitioner came to know about the fact that an e-auction sale notice for the suit property has been issued on 20.01.2020 under Annexure-3.

The Petitioner accordingly moved this Court in a Writ Petitioner vide WP(C) No. 1668 of 2020, wherein, this Court considering the submission of the Petitioner di