In an appeal, the Supreme Court resolved the matter of a borrower's right to redeem a mortgaged property under the unamended Section 13(8) of the SARFAESI Act.
Justices Vikram Nath and Rajesh Bindal on the bench confirmed that, under the unamended Section 13(8) of the SARFAESI Act, the borrower's right to redeem a mortgaged property remains in effect until the sale certificate is registered and possession is transferred.
In essence, the borrower's right to redeem is valid until the sale certificate is registered and possession is transferred. After this point, the borrower no longer has a right to redemption under the unamended Section 13(8) of the SARFAESI Act.
In this case, the property in question was mortgaged to the bank (Respondent No. 1) by the borrowers (Respondent Nos. 2 and 3). The appellant acquired the mortgaged property through auction under the SARFAESI Act and made the necessary payment. However, before the sale certificate was issued, the borrowers settled the entire outstanding amount with the bank.
After the Debt Recovery Appellate Tribunal favored the borrowers and permitted property redemption, the appellant's writ petition to the High Court of Punjab and Haryana was dismissed. As a result, the appellant sought recourse in the Supreme Court.
The appellant had acquired the mortgaged property of Borrowers/Respondent Nos. 2 and 3, secured with Bank/Respondent No. 1, through auction proceedings under the SARFAESI Act.
The appellant deposited the full auction amount of Rs.70,05,000 on March 31, 2010. The sale was confirmed on April 2, 2010, and the sale certificate was issued on April 8, 2010. However, on May 5, 2010, Borrowers/Respondent Nos. 2 and 3 paid the entire outstanding amount to Bank/Respondent No. 1 and subsequently applied for redemption.
The sale certificate wasn't registered, and the property remained with Borrowers/Respondent Nos. 2 and 3, as the bank issued a No Objection Certificate for their loan account.
TAGS: SARFAESI Act Unamended Section 13(8) Borrower's Right Redemption Sale Certificate Possession Supreme Court.
