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2025 Supreme(MP) 1045
IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR
SANJEEV SACHDEVA, VINAY SARAF, JJ.
Smt. Swati Patel – Petitioner
Versus
Bank Of India And Others – Respondents
Writ Petition No. 2829 of 2024
Decided On : 09-04-2025
For the Petitioner: Shri Hare Krishana Upadhyay, learned counsel.
For the Respondents:Shri Praveen Kumar Chaturvedi, learned counsel, Shri R.D. Padraha, learned Government Advocate, Shri Rajesh Maindiratta, learned counsel.
Right of redemption under SARFAESI is extinguished by acceptance of auction surplus; subsequent claims are barred.
Headnote:This case pertains to Writ Petition No. 2829 of 2024, where the petitioner sought to redeem a mortgaged property following a loan default. The court analyzed the applicability of provisions in the SARFAESI Act and Section 60 of the Transfer of Property Act, confirming that the right to redeem has been extinguished by the act of parties due to acceptance of surplus proceeds from a prior auction. The court framed the issue as whether the mortgagor retains rights post-acceptance of surplus proceeds. Ultimately, it ruled that the petitioner lacks the right to redeem the mortgage due to prior waivers and unequivocal acceptances of provided benefits. The petition was dismissed with no order as to costs.
| Table of Content |
|---|
| 1. petitioner seeks redemption of mortgaged property post-auction. (Para 1 , 3 , 4) |
| 2. arguments against petitioner's claim cite waiver and prior litigation. (Para 5) |
| 3. court examines rights under sarfaesi act and transfer of property act. (Para 7) |
| 4. final ruling confirms extinguished redemption rights due to auction surplus acceptance. (Para 8) |
ORDER :
Vinay Saraf, J.
1. The petitioner, who obtained loan from respondent/Bank and mortgaged her property has preferred the present petition seeking following reliefs:
"i. That, this Hon’ble Court may kindly be pleased to issue a writ of mandamus directing the bank authorities to accept the amount and redeem the “mortgage of the secured assets i.e. the house of the petitioner, in the interest of justice, equity and good conscience.
ii. Any other relief which this Hon'ble High Court deems fit and proper may also be granted."
2. With the consent of parties, final arguments were heard for the purpose of final disposal of the petition.
3. The facts sufficient to decide the present petition are as under:
3.1 In 2003-2004, the petitioner availed the housing loan of Rs.12 lacs from the respondent/Bank of India after executing requisite documents mortgaging the house with the Bank.
3.2 As the petitioner failed to pay the installments in time, the Bank declared the petitioner's account as non performing assets (NPA) on 19.10.2009 and issued a notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, 'the SARFAESI Act ') on 06.11.2009 calling upon the petitioner to pay due amount of Rs.10,67,236/- along with interest within a period of 60 days.
3.3 The petitioner failed to make payment of the demanded amount, resultantly, the Bank issued a notice under Section 13 (4) of the SARFAESI Act on 01.02.2010, which was also published in two daily news paper namely; Dainik Bhaskar and Desh Bandhu on 07.02.2010.
3.4 An auction notice was also published for the purpose of sale of secured asset on 13.08.2010 in two news papers mentioning that the auction will be conducted on 13.09.2010.
3.5 After publication of auction notice, the petitioner approached to Debts Recovery Tribunal by filing S.A.No.137/2010 assailing the notice under Section 13 (4) of the Act which was dismissed on 13.12.2010.
3.6 Meanwhile, fresh auction notice was published in two daily news paper namely; Patrika and Desh Bandhu on 12.11.2010 intimating that the auction will be conducted on 22.11.2010.Thereafter, the auction was conducted on 22.11.2010 and the said asset was auctioned and sold for the sum of Rs.30.62 lacs.
3.7 The said amount was deposited by auction purchaser and the Bank after adjusting the loan amount issued a cheque in the sum of Rs.9,63,387/- with a communication dated 28.12.2010 in favour of the petitioner under registered AD post which was deposited in some other Bank and was cleared and encashed on 22.01.2011 through clearance. Thereafter, sale certificate was issued in favour of the auction purchaser.
3.8 Petitioner challenged the auction proceeding conducted in pursuance of the notice published on 12.11.2010 on various grounds interalia; the auction was conducted in violation of the Rule 8 and 9 of the Security Interest (Enforcement) Rules, 2002 which contemplate that auction can be conducted only after expiry of 30 days but the auction was conducted within ten days from the date of publication of notice and consequently the same was in violation of the statutory rules.
3.9 The Debt Recovery Tribunal by order dated 25.09.2012 dismissed S.A.No.95/2011 filed under Section 17(1) of the SARFAESI Act seeking quashment of the recovery proceedings initiated by the Bank and to set aside the sale of the secured assets.
3.10 The order passed by the DRT, Jabalpur was assailed by the petitioner before DRAT, Allahabad in Appeal No.R-163/2012 which was dismissed by Appellate Tribunal by order dated 30.11.2012 whereby the action of the respo
