The court reaffirmed that under the SARFAESI Act, secured creditors' consent is mandatory for property redemption after proceedings are initiated.

JUDGMENT

Dated this the 6th day of October 2022 Shaji P. Chaly, J.

The appeal is filed by the petitioners in the writ petition challenging the interim order passed by the learned Single Judge dated 1st day of September 2022, whereby, an earlier interim order dated 29.7.2022 was vacated. The subject issue arises under the provisions of the SARFAESI Act, 2002 . The appellants are indebted to the first and second respondent banks on account of loans availed. Since there was default on the part of the appellants for repayment, action was initiated by issuing notice under Section 13(2) of the SARFAESI Act, 2002 ; and later the property was notified for sale and sold. The main relief sought for in the writ petition is to quash Ext.P11 sale notice and for a further direction restraining the respondents from proceeding with the sale notice. Apart from the same, other reliefs are also sought for.

2. When the matter came up for admission on 29.7.2022, a learned Single Judge deferred the confirmation of the sale proceedings on condition that appellants remit an amount of Rs.1,00,00,000/- (one crore) on 30.7.2022 and a further amount of Rs.6,90,00,000/- (six crores ninety lakhs) on or before 10.8.2022. In fact the appellants have deposited the said amount. However, the matter was posted before the learned Single Judge at the instance of the respondent bank, which expressed the necessity to proceed with the confirmation of sale and to vacate the interim order since according to the respondents the auction purchaser may back out. The learned Single Judge after hearing both sides; taking into account Section 13(8) of the SARFAESI Act as amended; and also the judgment of the Apex Court inSree Gokulam Chit and Finance Co. Pvt. Ltd. v. Emil and Eric Hospitality Services [2021 (6) KLT 673] and in Bank of Baroda v. Karwa Trading Company and Another [(2022) 5 SCC 168] has vacated the aforesaid interim order. However, the amount of Rs.7,90,00,000/- deposited by the appellants was directed to be retained in a non-lien account, which shall be subject to final orders in the writ petition. Whatever that be, yet another observation made in the order is that “it is clarified that notwithstanding the above, the petitioners will be at liberty to challenge the sale, if so advised, before the appropriate forum, in accordance with law”.

3. The paramount contention advanced by the appellants is that the learned Single Judge erred egregiously in vacating the interim order even without a written plea on behalf of the respondents. It is also submitted that the appellants have deposited Rs.7.90 crores as directed by the learned Single Judge as per an interim order dated 29.7.2022. It is further submitted that the price quoted in single bid was 7.91 crores and therefore, it was clear that the respondents have colluded with the 3rd respondent who had quoted one lakh above the reserve price for the property. That apart, it is submitted that the learned Single Judge did not notice that the respondent bank could not have demanded 25% of the sale price and requirement to deposit the 25% of the sale price arises only when the sale is confirmed by the authorised ofÏcer. That apart, it is submitted that in the light of the interim order the authorised ofÏcer could not have permitted to confirm the sale and the contrary act of the authorised ofÏcer clearly amounted to contempt of court. Other contentions are also raised.

4. On the other hand, learned counsel appearing for the respondent bank submitted that by virtue of Section 13(8) of the SARFAESI Act as amended, no redemption of property is possible and therefore the order of the learned Single Judge initially passed to defer the confirmation of the sale was not proper and that is the reason why it was vacated at a later point of time.

5. We have heard learned counsel for the appellants Sri.S.Easwaran, learned counsel for the respondents 1 and 2 Sri.C.Ajithkumar and learned counsel for the 3rd respondent Sri.P.K.Subhash and