In Brief
This Supreme Court case clarifies the right of borrowers to redeem mortgaged property under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The Court held that a borrower's right to redeem a mortgaged property is extinguished once an auction notice is published by the bank, not at completion of sale as previously understood. The 2016 amendment to Section 13(8) significantly curtailed borrowers' redemption rights compared to the prior position. The judgment emphasized that secured creditors and auction purchasers acquire firm rights upon publication of auction notice, protecting the integrity of the auction process. However, the Court expressed concern about persistent ambiguities in the SARFAESI Act and Rules, urging the Ministry of Finance to amend these provisions to eliminate ongoing confusion causing litigation in debt recovery tribunals.
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