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ASHWANI KUMAR MISHRA, SYED QAMAR HASAN RIZVI
Sharp Industries – Appellant
Versus
Bank of Maharashtra – Respondent
JUDGMENT :
This intra Court appeal by the appellant-borrower is directed against the judgment and order dated 2.3.2023, passed in Writ C No. 1595 of 2021, whereby the writ petition has been allowed by the learned Single Judge and the order passed by the Debt Recovery Appellate Tribunal in Regular Appeal No. 17 of 2020 dated 15.12.2020 has been set aside. The appellate tribunal had set aside the auction sale held by the bank on 10.9.2018 after quashing the order of Debt Recovery Tribunal dated 31.1.2019, in Securitization Appeal No. 59 of 2018. The respondent-bank was also directed by the appellate tribunal to refund the auction money to the auction purchaser after restoring the possession of immovable and movable property from the auction purchaser to the borrower. Liberty was also granted to the bank to proceed further from the stage of issuance of sale notice, in accordance with law. The appellate tribunal had returned a finding that no notice was actually served on the appellant borrower.
2. Learned Single Judge while allowing the writ and setting aside the appellate order of tri
The court established that strict adherence to notice requirements under the Securitization Act is essential to protect a borrower's right of redemption.
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 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 ....
Compliance with statutory notice requirements is imperative in mortgage auctions; failures may invalidate the sale, preserving the mortgagor's right of redemption until formal sale registration.
Secured creditors must adhere to proper notice and valuation requirements per the SARFAESI Act, as failure to do so invalidates asset sales.
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 right of redemption is available to the mortgagor until the sale is complete by registration of sale, and the violation of statutory rules may entitle the borrower to redeem the property.
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