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SANJEEV KUMAR, SANJAY PARIHAR
Nazir Ahmad Bhat – Appellant
Versus
Chairman/Managing Director J&K Bank – Respondent
JUDGMENT
Sanjeev Kumar, J.—The petitioner is a borrower in default of the J&K Bank and is aggrieved by the proceedings initiated for recovery of loan amount in terms of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [“SARFAESI Act”], in particular, notice dated 13th April 2023 issued by the Authorised Officer of the Respondent Bank under Section 13 (4) of the SARFAESI Act 2002, read with Rule 8(1) of the Security (Enforcement) Interest Rules, 2002 [“Rules of 2002”], auction notice dated 22nd August 2023, confirmation of auction vide communication dated 14th September 2023 and a Sale Certificate dated 15th December 2023 issued by Respondent-Bank in favour of Respondent No. 10, the auction purchaser. There is also a challenge laid by the petitioner to a criminal complaint dated 9th October 2023 made against the petitioner to the police.
2. Before we advert to the grounds of challenge urged by the learned counsel appearing for the petitioner, we deem it appropriate to state few facts as are germane to the disposal of this petition.
3. The petitioner initially approached Respondent Bank and availed Cash Credit Facility of Rs. 1,10,0
Recovery of debt – Mortgaged property cannot be put to auction sale without affording 30 days’ time to petitioner to clear demand.
The main legal point established in the judgment is that the right of redemption of the mortgaged property exists until the date of publication of notice for public auction, and the failure to exerci....
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.
Mandatory compliance with procedural requirements under the SARFAESI Act is essential; failure to adhere prejudices borrowers' rights and invalidates auction proceedings.
(1) Auction sale of secured asset – Unless and until a clear 30 days' notice is given to borrower, no sale or transfer can be resorted to by a secured creditor. Secured creditor cannot effect sale or....
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 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.
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