In Brief
The appellants, originally tenants, purchased a mortgaged property at a bank-conducted auction after the borrower defaulted on a loan. The borrower challenged the auction for the bank's failure to provide the mandatory 30-day notice required under the SARFAESI Act Rules. The bank admitted non-compliance. Lower tribunals and the High Court set aside the auction. The Supreme Court affirmed the cancellation, holding that the appellants' status reverted to tenants. Critically, the Court rejected the bank's demand for physical possession before refunding auction money, holding the bank responsible for causing litigation through procedural violation. The Court ordered return of the auction money with 12% per annum compound interest from 2009, emphasizing that the bank must suffer consequences for its non-compliance.
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