(PER: HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL)
2. Brief facts leading to the filing of this appeal are
and term loan of Rs.30,00,000/- was sanctioned.
amount. Thereafter, respondent No.3 issued notice under
taken under Section 13(4) of the Act. The respondent
reserve price of the property as Rs.9,37,00,000/-. The
S.A.No.174/2018 and S.A.No.212/2019. Both the
(DRT) on 31.10.2020. The respondent No.1-Bank issued a
auction notice to appellants. The respondent No.1-Bank,
which came to be dismissed. Being aggrieved this appeal.
3. Sri.B.N.Mahesh Chandra, learned counsel
however, it was fraudulently sold at Rs.5,78,00,000/-. It is
fraud. It is further submitted that the respondent-Bank
recover their dues instead of selling the whole property. It
Rules. It is contended that the learned Single Judge has
property for a meagre sum. It is further contended that
borrower. It is also contended that the learned Single
asset. In support of his contentions, he placed reliance on
i. CELIR LLP. VS. SUMATI PRASAD BAFNA
AND OTHERS1
ii. RAM KISHUN AND OTHERS VS. STATE OF
UTTAR PRADESH AND OTHERS2
iii. K.KUMARA GUPTA VS. SRI MARKENDAYA
AND SRI OMKARESWARA SWAMY TEMPLE
AND OTHERS3
iv. UNITED BANK OF INDIA VS. SATYAWATI
TONDON AND OTHERS4
v. M/S.PALPAP ICHINICHI SOFTWARE
INTERNATIONAL LIMITED VS.
M/S.INDIAN BANK
Hence, he seeks to allow the appeal.
4. Per contra, Sri.S.Rajendra, learned counsel
appearing for respondent No.4-buyer supports the
2024 SCC OnLine SC 3727
(2012) 11 SCC 511
(2022) 5 SCC 710
(2010) 8 SCC 110
2011 SCC OnLine Mad 1502
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impugned order of the learned Single Judge and submits
that the property was brought for sale on five occasions
and there were no bidders, hence the reserve price was
reduced and the answering respondent has participated in
the bid process and his bid was accepted and thereafter
sale certificate was issued, which came to be registered. It
is submitted that the right to seek redemption of
mortgaged property stands extinguished once the
registered sale certificate is issued, hence, question of
entertaining this appeal would not arise. It is further
submitted that the learned Single Judge considered all the
issues raised by the appellants and answered the same by
giving detailed reasons, and the same does not call for any
interference. Hence, he seeks to dismiss the petition. In
support of his contentions, he placed reliance on the
following decisions:
i. SURAKSHA VENTURES LLP. VS.
MR.G.LOKESH AND ANOTHER6
W.A.No.170/2025 DTD.16.09.2025
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ii. UNITED BANK OF INDIA VS. SATYAWATI
TONDON AND OTHERS7
iii. AUTHORIZED OFFICER, STATE BANK OF
TRAVANCORE AND ANOTHER VS. MATHEW
K.C.8
iv. DWARIKA PRASAD VS. STATE OF UTTAR
PRADESH AND OTHERS9
v. ALLOKAM PEDDABBAYYA AND ANOTHER
VS. ALLAHABAD BANK AND OTHERS10
vi. K.CHIDAMBARA MANICKAM VS.
SHAKEENA AND OTHERS11
vii. BIJNOR URBAN COOPERATIVE BANK
LIMITED, BIJNOR AND OTHERS VS.
MEENAL AGARWAL AND OTHERS
5. We have heard the arguments of the learned
counsel appearing for the appellants, learned counsel for
the respondent No.4 and meticulously perused the
(2010) 8 SCC 110
(2018) 3 SCC 85
(2018) 5 SCC 491
(2017) 8 SCC 272
2007 SCC OnLine Mad 675
(2023) 2 SCC 805
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material available on record. We have given our anxious
consideration to the material available on record and the
judgments relied on by both the sides.
6. The point that arises for consideration in this
appeal is:
"Whether the impugned order passed by the
learned Single Judge calls for any interference?"
7. The parties are not in dispute that the
appellants borrowed a loan from erstwhile State Bank of
Mysore, Tumakuru branch, for an amount which consists
of Rs.2,00,00,000/- cash credit limit and term loan of
Rs.30,00,000/-. It is averred that the re-payments were
made as per the terms of loan agreement till September
2017 and thereafter, due to market fluctuation, the
appellants suffered a loss and could not continue to re-pay
the loan amount. The respondent No.3-Bank treated the
loan as a NPA and thereafter issued notice under Section
13(2) of the Act calling upon the appellants to discharge
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their liability. The records indicate that the symbolic
possession of the schedule property was taken under
Section 13(4) of the Act. On 30.05.2019, the Deputy
Commissioner, Tumakuru passed an order under Section
14(1) of the Act for handing over the physical possession
of the schedule property to the respondent-bank.
Thereafter, the respondent-bank has put the property for
auction, fixing the reserve price at Rs.9,37,00,000/-. The
records further indicate that the Bank has offered One
Time Settlement (OTS) to the appellants, but the same
was not availed by the appellants. The appellants
challenged the action of the respondent-Bank in
S.A.174/2018 and S.A.212/2019 before the DRT
challenging the notice issued under Section 13(4) of the
Act, which came to be dismissed on 31.10.2020.
Thereafter, the respondent-Bank took further steps to sell
the property to realize the dues. Several attempts were
made and finally, sale notice dated 08.09.2021 was
issued, sale scheduled on 29.09.2021 was conducted and
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the respondent No.4 became the successful bidder in the
said process. It is noticed that the respondent-Bank
reduced the reserve price of the schedule property taking
note of the fact that on earlier four sale notices, no
response had been received. The records also indicate
that the respondent No.4 has deposited the entire sale
consideration after which sale certificate came to be issued
and subsequently registered in its favour as per law. With
these background, the appellant-borrower filed the writ
petition before this Court challenging the e-auction notice
issued by the respondent No.2 dated 08.09.2021, sale
certificate issued by the respondent No.2 dated
07.10.2021 which is registered at the Sub-Registrar,
Tumakuru and further sought a writ of mandamus to the
respondent Nos.1 and 2 to consider the petitioners'
request for OTS. The learned Single Judge entertained the
writ petition and recorded a clear finding that there
remained no property mortgaged to be redeemed once the
property is auctioned and the sale certificate is issued and
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registered. It is further observed that every action of the
respondent-Bank was within the knowledge of the
appellants and yet they did not come forward to pay the
reserve price and clear the property from being auctioned.
It was also observed that the respondent-Bank obtained
independent valuation, affixed the notice in the
conspicuous place of the property, publications were made
and thereafter, sale was conducted and there cannot be
any direction to consider the OTS and proceeded to
dismiss the writ petition.
8. The appellant contended that the reserve price
was fixed by the respondent-Bank at Rs.9,37,00,000/-,
but the same has been fraudulently sold by undervaluing
the price of the property. The said contention was also
canvassed before the learned Single Judge, wherein the
learned Single Judge, at paragraphs 13 and 14 has
recorded a clear finding as to why the reserve price came
to be reduced and extracted a chart which indicates the
action of the respondent-Bank for reduction of reserve
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price. The aforesaid finding of the learned Single Judge is
based on appreciation of the material placed before him as
the respondent-Bank made an attempt to sell the property
on four occasions earlier i.e. by issuing sale notice dated
12.07.2018, 21.11.2019, 26.11.2020, 29.07.2021 and on
all earlier four occasions the reserve price was
proportionately reduced from Rs.9,37,00,000/- to
Rs.6,50,00,000/- for land and building and Rs.27,00,000/-
for plant and machinery. However, no bidders had come
forward to purchase the schedule property. Hence, the
respondent-Bank issued a sale notice dated 08.09.2021
and the sale was conducted on 29.09.2021 at a reserve
price of Rs.5,78,00,000/- for land and building and
Rs.23,00,000/- for plant and machinery. The respondent
No.4 participated in the e-auction held by the respondent-
Bank and he bid for Rs.5,82,81,000/- which was accepted
by the respondent-Bank and the sale was confirmed in its
favour. The respondent No.4 deposited the entire bid
amount as per the terms of e-auction notice with the
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respondent-Bank within the stipulated time and on
07.10.2021, a certificate of sale was issued in favour of
the respondent No.4 and the said sale certificate was
registered with the Sub-Registrar, Tumakuru on
11.10.2021. The records also indicate that the
respondent-Bank put the respondent No.4 in physical
possession of the property in question on 12.10.2021.
Thereafter, the appellants filed the writ petition on
28.10.2021 seeking to challenge the action of the
respondent-Bank.
9. The Hon'ble Supreme Court and other Courts
have considered the issues raised in this appeal. In the
case of SATYAWATI TONDON referred supra, at paragraph
Nos.42, 43 & 55, it was held as under:
"42. There is another reason why the impugned order
should be set aside. If Respondent 1 had any tangible
grievance against the notice issued under Section 13(4)
or action taken under Section 14, then she could have
availed remedy by filing an application under Section
17(1). The expression "any person" used in Section 17(1)
is of wide import. It takes within its fold, not only the
borrower but also the guarantor or any other person who
may be affected by the action taken under Section 13(4)
or Section 14. Both, the Tribunal and the Appellate
Tribunal are empowered to pass interim orders under
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Sections 17 and 18 and are required to decide the
matters within a fixed time schedule. It is thus evident
that the remedies available to an aggrieved person under
the SARFAESI Act are both expeditious and effective.
43. Unfortunately, the High Court overlooked the settled
law that the High Court will ordinarily not entertain a
petition under Article 226 of the Constitution if an
effective remedy is available to the aggrieved person and
that this rule applies with greater rigour in matters
involving recovery of taxes, cess, fees, other types of
public money and the dues of banks and other financial
institutions. In our view, while dealing with the petitions
involving challenge to the action taken for recovery of the
public dues, etc. the High Court must keep in mind that
the legislations enacted by Parliament and State
Legislatures for recovery of such dues are a code unto
themselves inasmuch as they not only contain
comprehensive procedure for recovery of the dues but
also envisage constitution of quasi-judicial bodies for
redressal of the grievance of any aggrieved person.
Therefore, in all such cases, the High Court must insist
that before availing remedy under Article 226 of the
Constitution, a person must exhaust the remedies
available under the relevant statute.
55. It is a matter of serious concern that despite repeated
pronouncement of this Court, the High Courts continue to
ignore the availability of statutory remedies under the
DRT Act and the SARFAESI Act and exercise jurisdiction
under Article 226 for passing orders which have serious
adverse impact on the right of banks and other financial
institutions to recover their dues. We hope and trust that
in future the High Courts will exercise their discretion in
such matters with greater caution, care and
circumspection."
10. In the case of AUTHORIZED OFFICER, STATE
BANK OF TRAVANCORE AND ANOTHER VS. MATHEW K.C.
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referred supra at paragraph Nos.7, 15 & 18, it was held as
under:
"7. The Section 13(4) notice along with possession notice
under Rule 8 was issued on 21-4-2015. The remedy under
Section 17 of the Sarfaesi Act was now available to the
respondent if aggrieved. These developments were not
brought on record or placed before the Court when the
impugned interim order came to be passed on 24-4-2015.
The writ petition was clearly not instituted bona fide, but
patently to stall further action for recovery. There is no
pleading why the remedy available under Section 17 of
the Act before the Debts Recovery Tribunal was not
efficacious and the compelling reasons for by-passing the
same. Unfortunately, the High Court also did not dwell
upon the same or record any special reasons for grant of
interim relief by direction to deposit.
15. It is the solemn duty of the court to apply the correct
law without waiting for an objection to be raised by a
party, especially when the law stands well settled. Any
departure, if permissible, has to be for reasons discussed,
of the case falling under a defined exception, duly
discussed after noticing the relevant law. In financial
matters grant of ex parte interim orders can have a
deleterious effect and it is not sufficient to say that the
aggrieved has the remedy to move for vacating the
interim order. Loans by financial institutions are granted
from public money generated at the taxpayer's expense.
Such loan does not become the property of the person
taking the loan, but retains its character of public money
given in a fiduciary capacity as entrustment by the public.
Timely repayment also ensures liquidity to facilitate loan
to another in need, by circulation of the money and
cannot be permitted to be blocked by frivolous litigation
by those who can afford the luxury of the same. The
caution required, as expressed in Satyawati
Tondon [United Bank of India v. Satyawati Tondon,
(2010) 8 SCC 110 : (2010) 3 SCC (Civ) 260] , has also
not been kept in mind before passing the impugned
interim order: (SCC pp. 123-24, para 46)
"46. It must be remembered that stay of an action
initiated by the State and/or its
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agencies/instrumentalities for recovery of taxes,
cess, fees, etc. seriously impedes execution of
projects of public importance and disables them
from discharging their constitutional and legal
obligations towards the citizens. In cases relating
to recovery of the dues of banks, financial
institutions and secured creditors, stay granted by
the High Court would have serious adverse impact
on the financial health of such bodies/institutions,
which (sic will) ultimately prove detrimental to the
economy of the nation. Therefore, the High Court
should be extremely careful and circumspect in
exercising its discretion to grant stay in such
matters. Of course, if the petitioner is able to show
that its case falls within any of the exceptions
carved out in Baburam Prakash Chandra
Maheshwari v. Antarim Zila Parishad [Baburam
Prakash Chandra Maheshwari v. Antarim Zila
Parishad, AIR 1969 SC 556] , Whirlpool
Corpn. v. Registrar of Trade Marks [Whirlpool
Corpn. v. Registrar of Trade Marks, (1998) 8 SCC
1] and Harbanslal Sahnia v. Indian Oil Corpn.
Ltd. [Harbanslal Sahnia v. Indian Oil Corpn. Ltd.,
(2003) 2 SCC 107] and some other judgments,
then the High Court may, after considering all the
relevant parameters and public interest, pass an
appropriate interim order."
18. The impugned orders are therefore contrary to the
law laid down by this Court under Article 141 of the
Constitution and unsustainable. They are therefore set
aside and the appeal is allowed."
11. The aforesaid decisions makes it very clear that
the writ Court should not entertain the writ petitions
challenging the action initiated by the banks and financial
institutions under the provisions of the Act and the parties
invariably shall be remitted back to the DRT unless a case
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is made out to entertain the writ petition on settled
principles of law. In the instant case, the learned Single
Judge has entertained the writ petition, answered all the
issues raised by the appellants by considering the law laid
down by the Hon'ble Supreme Court.
12. In the case of DWARIKA PRASAD referred
supra at paragraph No.9 it was held as under:
"9. In the present case, the appellant failed to comply
with the provisions of Section 13(8). The statute
mandates that it is only where the dues of the secured
creditor are tendered together with costs, charges and
expenses before the date fixed for sale or transfer that
the secured asset is not to be sold or transferred. The
appellant was aware of the proceedings initiated by the
Bank for asserting its right to recover its dues by selling
the property. The appellant moved the DRT in
Securitisation Application No. 176 of 2015. During the
pendency of those proceedings, orders were passed by
the Tribunal on 1-2-2016 and 3-2-2016. The appellant
moved the Allahabad High Court which by its order dated
9-3-2016 [Dwarika Prasad v. State of U.P., 2016 SCC
OnLine All 2564] restrained the Bank and the auction-
purchaser from executing the sale deed until 15-3-2016.
The stay was extended till 28-3-2016 by which date the
appellant was to deposit an amount of Rs 7,00,000. The
balance was required to be deposited by 30-4-2016.
While the appellant deposited an amount of Rs 7,00,000
with the Bank, he failed to deposit the balance in
accordance with the provisions of Section 13(8). Even
after the writ proceedings before the High Court were
withdrawn, the appellant did not deposit the balance due
together with the costs, charges and expenses. The sale
was confirmed, a sale certificate was issued and a
registered sale deed was executed on 12-4-2016. The
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appellant failed to ensure compliance with Section 13(8).
The right to redemption stands extinguished on the
execution of the registered sale deed. This is also the
view which has been expressed in the judgment
in Mathew Varghese [Mathew Varghese v. M. Amritha
Kumar, (2014) 5 SCC 610 : (2014) 3 SCC (Civ) 254] ."
13. In the case of ALLOKAM PEDDABBAYYA
referred supra at paragraph No.23 it was held as under:
"23. The aforesaid discussion leads to the conclusion that
the plaintiffs lost the right to sue for redemption of the
mortgaged property by virtue of the proviso to Section 60
of the Act, no sooner that the mortgaged property was
put to auction-sale in a suit for foreclosure and sale
certificate was issued in favour of Defendant 2. There
remained no property mortgaged to be redeemed. The
right to redemption could not be claimed in the abstract."
14. In the case of K.CHIDAMBARA MANICKAM
referred supra, the Hon'ble Madras High Court, at
paragraph No.52 has held as under:
"52. Fourthly, the right to redeem the mortgage,
as provided in section 60 of the Transfer of Property Act,
is, of course, a very valuable right possessed by the
mortgagor. At the same time, such a right to redeem the
mortgage can be exercised before it is foreclosed, or the
estate is sold. It has been held that the mortgagor can
adopt the course provided under section 60 of the
Transfer of Property Act only before the mortgagee has
filed a suit for enforcement of the mortgage and not
thereafter, vide Poulose v. State Bank of Travancore, AIR
1989 Ker 79. In this case, as discussed earlier, the
borrowers approached the second respondent-bank only
after initiation of the proceedings under section 13(4) of
the SARFAESI Act, and that too after the property was
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sold in public auction and the sale was confirmed in
favour of the appellant."
15. In the case of BIJNOR URBAN COOPERATIVE
BANK LIMITED referred supra at paragraph No.8,12 to 14
it was held as under:
"8. Therefore, as per the guidelines issued, the
grant of benefit of OTS Scheme cannot be prayed as
a matter of right and the same is subject to fulfilling
the eligibility criteria mentioned in the scheme. The
defaulters who are ineligible under the OTS Scheme
are mentioned in Clause 2, reproduced hereinabove.
A wilful defaulter in repayment of loan and a person
who has not paid even a single instalment after
taking the loan and will not be able to pay the loan
will be considered in the category of "defaulter" and
shall not be eligible for grant of benefit under the
OTS Scheme. Similarly, a person whose account is
declared as "NPA" shall also not be eligible. As per
the guidelines, the Bank is required to constitute a
Settlement Advisory Committee for the purpose of
examining the applications received and thereafter
the said Committee has to take a decision after
considering whether a defaulter is entitled to the
benefit of OTS or not after considering the eligibility
as per the OTS Scheme. While making
recommendations, the Settlement Advisory
Committee has to consider whether efforts have been
made to recover the loan amount and the possibility
of recovery has been minimised, meaning thereby if
there is possibility of recovery of the amount, either
by initiating appropriate proceedings or by auctioning
the property mortgaged and/or the properties given
as a security either by the borrower and/or by
guarantor, the application submitted by the borrower
for grant of benefit under the OTS Scheme can be
rejected.
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12. Even otherwise, as observed hereinabove, no
borrower can, as a matter of right, pray for grant of
benefit of one-time settlement scheme. In a given
case, it may happen that a person would borrow a
huge amount, for example, Rs 100 crores. After
availing the loan, he may deliberately not pay any
amount towards instalments, though able to make
the payment. He would wait for the OTS scheme and
then pray for grant of benefit under the OTS scheme
under which, always a lesser amount than the
amount due and payable under the loan account will
have to be paid. This, despite there being all
possibility for recovery of the entire loan amount
which can be realised by selling the
mortgaged/secured properties. If it is held that the
borrower can still, as a matter of right, pray for
benefit under the OTS scheme, in that case, it would
be giving a premium to a dishonest borrower, who,
despite the fact that he is able to make the payment
and the fact that the bank is able to recover the
entire loan amount even by selling the
mortgaged/secured properties, either from the
borrower and/or guarantor. This is because under the
OTS scheme a debtor has to pay a lesser amount
than the actual amount due and payable under the
loan account. Such cannot be the intention of the
bank while offering OTS scheme and that cannot be
the purpose of the scheme which may encourage
such a dishonesty.
13. If a prayer is entertained on the part of the
defaulting unit/person to compel or direct the
financial corporation/bank to enter into a one-time
settlement on the terms proposed by it/him, then
every defaulting unit/person which/who is capable of
paying its/his dues as per the terms of the agreement
entered into by it/him would like to get one-time
settlement in its/his favour. Who would not like to get
his liability reduced and pay lesser amount than the
amount he/she is liable to pay under the loan
account? In the present case, it is noted that the
original writ petitioner and her husband are making
the payments regularly in two other loan accounts
and those accounts are regularised. Meaning thereby,
they have the capacity to make the payment even
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with respect to the present loan account and despite
the said fact, not a single amount/instalment has
been paid in the present loan account for which
original petitioner is praying for the benefit under the
OTS Scheme.
14. The sum and substance of the aforesaid
discussion would be that no writ of mandamus can be
issued by the High Court in exercise of powers under
Article 226 of the Constitution of India, directing a
financial institution/bank to positively grant the
benefit of OTS to a borrower. The grant of benefit
under the OTS is always subject to the eligibility
criteria mentioned under the OTS scheme and the
guidelines issued from time-to-time. If the
bank/financial institution is of the opinion that the
loanee has the capacity to make the payment and/or
that the bank/financial institution is able to recover
the entire loan amount even by auctioning the
mortgaged property/secured property, either from
the loanee and/or guarantor, the bank would be
justified in refusing to grant the benefit under the
OTS scheme. Ultimately, such a decision should be
left to the commercial wisdom of the bank whose
amount is involved and it is always to be presumed
that the financial institution/bank shall take a prudent
decision whether to grant the benefit or not under the
OTS scheme, having regard to the public interest
involved and having regard to the factors which are
narrated hereinabove."
16. In the case of Suraksha Ventures LLP v Mr.G
Lokesh referred supra, the division Bench of this Court, at
paragraph No.9 has held as under:
"9. In CELIR LLP v. Bafna Motors (Mumbai)
Private Limited and others : (2024) 2 SCC 1, the
Supreme Court had authoritatively held that the
provisions of Section 13(8) of the SARFAESI Act
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would override Section 60 of the Transfer of
Property Act, 1882 [TP Act]. The relevant extract of
the said decision reads as under:
65. The SARFAESI Act is a special law
containing an overriding clause in comparison to
any other law in force. Section 60 of the 1882
Act, is a general law vis-à-vis the amended
Section 13(8) of the SARFAESI Act which is
special law. The right of redemption is clearly
restricted till the date of publication of the sale
notice under the SARFAESI Act, whereas the
said right continues under Section 60 of the
1882 Act till the execution of conveyance of the
mortgaged property. The legislative history has
been covered in the preceding paragraphs of
this judgment and how Parliament desired to
have express departure from the general
provision of Section 60 of the 1882 Act. The
SARFAESI Act is a special law of recovery with a
paradigm shift that permits expeditious
recovery for the banks and the financial
institutions without intervention of courts.
Similarly, Section 13(8) of the SARFAESI Act is
a departure from the general right of
redemption under the general law i.e. the 1882
Act. Further, the legislature has in the Objects
and Reasons while passing the amending Act
specifically stated "to facilitate expeditious
disposal of recovery applications, it has been
decided to amend the said Acts...". Thus, while
interpreting Section 13(8) vis-àvis Section 60 of
the 1882 Act, an interpretation which furthers
the said Objects and Reasons should be
preferred and adopted. If the general law is
allowed to govern in the manner as sought to be
argued by the borrowers, it will defeat the very
object and purpose as well as the clear
language of the amended Section 13(8).
66. In Mathew Varghese [Mathew Varghese
v. M. Amritha Kumar, (2014) 5 SCC 610 :
(2014) 3 SCC (Civ) 254] this Court had
interpreted the unamended Section 13(8) of the
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SARFAESI Act and Section 60 of the 1882 Act
respectively. However, thereafter the legislature
amended Section 13(8) of the SARFAESI Act.
Thus, on this score, the decision in Mathew
Varghese [Mathew Varghese v. M. Amritha
Kumar, (2014) 5 SCC 610 : (2014) 3 SCC (Civ)
254] could be said to have been partially
legislatively overruled as the substratum of the
verdict stands altered/amended.
67. Even otherwise, we should not lose sight
of the fact that in Mathew Varghese [Mathew
Varghese v. M. Amritha Kumar, (2014) 5 SCC
610 : (2014) 3 SCC (Civ) 254] the Court held in
regard to the right of redemption that both the
SARFAESI Act and the 1882 Act are
complementary to each other and equally
applicable. It had held this because, the words
"before the date fixed for transfer" in the
unamended Section 13(8), amongst other
things also means and connotes the date of
conveyance of the secured asset by a registered
instrument (which is the ordinary process of
extinguishment of right of redemption under the
1882 Act). Since, this Court observed that the
stipulation or expression "date fixed for
transfer" could also mean the date of
conveyance/transfer of such secured asset and
being so, is not much different from the
ordinary process of redemption under the 1882
Act, it could not be said that there was any
material inconsistency between the SARFAESI
Act and the 1882 Act, and thus it found no
reason or hesitation to hold that the 1882 Act is
inapplicable and thus made an endeavour of
harmonising the two.
68. It appears that while considering the
right of redemption of mortgage under the
unamended Section 13(8), this Court in Mathew
Varghese [Mathew Varghese v. M. Amritha
Kumar, (2014) 5 SCC 610 : (2014) 3 SCC (Civ)
254] only went so far to say that in the absence
of any material inconsistency between the
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SARFAESI Act and the 1882 Act, there was no
good reason to hold that the 1882 Act would not
be applicable and as such, held that general
right of redemption of mortgage contained in
Section 60 of the 1882 Act would apply even in
respect of the SARFAESI Act.
69. However, with the advent of the 2016
Amendment, Section 13(8) of the SARFAESI Act
now uses the expression "before the date of
publication of notice for public auction or
inviting quotations or tender from public or
private treaty for transfer by way of lease,
assignment or sale of the secured assets" which
by no stretch of imagination could be said to be
in consonance with the general rule under the
1882 Act that the right of redemption is
extinguished only after conveyance by
registered deed. Thus, in the light of clear
inconsistency between Section 13(8) of the
SARFAESI Act and Section 60 of the 1882 Act
the former special enactment overrides the
latter general enactment in light of Section 35
of the SARFAESI Act. Thus, the right of
redemption of mortgage is available to the
borrower under the SARFAESI Act only till the
publication of auction-notice and not thereafter,
in light of the amended Section 13(8)."
10. It is clear from the above, that the
mortgagors have no right to insist that their offer
for the amount be accepted after the notice of the
auction has been issued for enforcement of the
security interest under the SARFAESI Act."
17. The enunciation of law laid down by the Hon'ble
Supreme Court, the coordinate bench of this Court and the
decision of the Hon'ble Madras High Court referred supra
makes it very clear that the right to seek redemption
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stands extinguished on execution of the transfer deed. In
the instant case, the writ petition is filed by the appellants
after the auction notice and registered sale certificate had
already been issued, hence, on this ground, no relief can
be granted to the appellants. The Hon'ble Supreme Court
in the case of BIJNOR URBAN COOPERATIVE BANK
LIMITED referred supra, has held that no writ of
mandamus can be issued to the financial institutions and
the banks to consider OTS positively and such a decision
should be left to the commercial wisdom of the banks as
the consideration of OTS is not a matter of right.
18. Learned counsel for the appellants placing
reliance on the decisions of RAM KISHUN AND OTHERS,
K.KUMARA GUPTA and M/S.PALPAP ICHINICHI
SOFTWARE INTERNATIONAL LIMITED referred supra,
contend that before disposing the secured assets, it is a
condition precedent to follow the statutory compliance. In
the instant case, the respondent-Bank has meticulously
complied with the requirements of the Act and the Rules
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referred supra. We do not find any procedural error in the
actions undertaken by the respondent-Bank, hence, the
said decisions would not help the appellants.
19. The contention of the appellants that the
respondent-Bank ought to have sold only a portion of the
secured asset to realize their dues also has no merit. The
respondent-Bank had made an effort to realize the
security from 2018 to 2021 on four occasions, however no
bidders have come forward to buy the schedule property.
The respondent No.4 has participated in the e-auction
process, conducted pursuant to sale notice dated
08.09.2021 and after following the required procedure, the
sale is confirmed, sale certificate is issued, which was
subsequently registered as per law in favour of respondent
No.4. We do not find any error in the action of respondent-
Bank. The learned Single Judge, considering all the issues
raised, has assigned detailed reasons for dismissing the
writ petition. Hence, we do not find any error in the
impugned order calling for interference in this appeal.
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Accordingly, the appeal is devoid of merits and the same is
hereby rejected.
Sd/-
(ANU SIVARAMAN)
JUDGE
Sd/-
(VIJAYKUMAR A. PATIL)
JUDGE
BSR/RV
