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2018 (3) TMI 198 - SC - Indian LawsE-auction - Section 13(8) of the SARFAESI Act - Held that - 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, is however, entitled to a refund of his deposit of ₹ 7,00,000 with interest at 9% per annum from the date of deposit till payment - appeal allowed in part.
Issues:
1. Appellant's right of redemption to the mortgaged property. 2. Interpretation of Section 13(8) of the SARFAESI Act. 3. Compliance with the provisions of Section 13(8) by the appellant. Issue 1: Appellant's Right of Redemption: The appellant, a guarantor to a loan, created an equitable mortgage to secure the liability. Despite offering to repay the dues, the property was auctioned without considering his redemption offer. The High Court held that post-sale registration, the appellant lost the right of redemption, citing the Mathew Varghese case. Issue 2: Interpretation of Section 13(8) of the SARFAESI Act: Section 13(8) states that if dues are tendered before the sale date, the asset cannot be sold. Referring to Mathew Varghese, the court emphasized the mortgagor's right to redeem until the sale deed transfer. The appellant's failure to comply with Section 13(8) extinguished his redemption right post-sale registration. Issue 3: Compliance with Section 13(8) by the Appellant: The appellant failed to fully comply with Section 13(8) despite depositing a partial amount. The court noted his failure to pay the balance by the stipulated date, leading to the sale confirmation and deed execution. Consequently, the right to redemption was lost upon the sale deed execution, aligning with the Mathew Varghese judgment. In conclusion, the appellant's right of redemption was extinguished post-sale registration due to non-compliance with Section 13(8). The court directed a refund of the deposited amount with interest but found no merit in the appeal, resulting in its disposal without costs.
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