TMI Blog2018 (3) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... - - - Dated:- 6-3-2018 - Mr. Dipak Misra, Mr. A M Khanwilkar And Dr D Y Chandrachud For the Appellant : Mr. Rameshwar Prasad Goyal, AOR For the Respondents : Mr. T. Mahipal, AOR JUDGMENT Dr D Y CHANDRACHUD, J 1 The appellant was a guarantor to a loan sanctioned for educational purposes to one Jitendra Kumar. Under the letter of sanction dated 20 June 2009, there was a repayment holiday of 24 months (comprised of a grace period of 12 months and an additional 12 months) or six months after the borrower obtained a job, whichever was earlier. Repayment was to commence from 20 June 2011. In order to secure the liability, the appellant created an equitable mortgage in respect of an immovable property bearing Kh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant filed a writ petition before the Allahabad High Court (Writ (C ) 10877 of 2016). The following order was passed on 15 March 2016 by a Division Bench of the Allahabad High Court: Learned counsel for the petitioner upon instructions states that the petitioner is ready and wiling to deposit the entire loan amount within a month. He further submits that on or before 28.3.2016 the petitioner will deposit ₹ 7,00,000/- and the remaining amount as may be intimated by the Bank would be deposited on or before 30.4.2016 Put up this case as a fresh case on 28.3.2016. By the said date the petitioner will fill a supplementary affidavit annexing proof of receipt of deposit of ₹ 7,00,000/- with the respondent Bank. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. After the confirmation of the sale the bank executed a registered sale deed against the receipt of a total consideration of ₹ 54,41,500. The auction purchasers (respondent nos 3 and 4) took possession of the property. 2 The appellant filed a writ petition before the Allahabad High Court contending that since he was ready and willing to clear the outstanding dues of the bank, he has a right of redemption to the mortgaged property and that the auction sale without considering his offer for redemption was illegal and void. The Division Bench of the High Court rejected the writ petition, placing reliance on the provisions of Section 13(8) of the SARFAESI Act. The High Court held that the exercise of the right of redemption is per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of the High Court. It was urged that despite moving the DRT, the appellant sought relief before the Allahabad High Court in proceeding under Article 226 of the Constitution. After the High Court passed an order on 15 March 2016 recording the statement that the appellant would deposit an amount of ₹ 7,00,000 by 28 March 2016 and the balance by 30 April 2016 the writ petition was withdrawn on 28 March 2016 with liberty to pursue the proceedings before the Tribunal. At no stage did the Tribunal interdict the issuance of a certificate of sale. The sale certificate was issued and was followed by the registration of the sale deed in April 2016. The bank had advertised the proposed sale by auction and followed all requisite procedure und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o resort to a sale without the intervention of the Court or Tribunal. However, under Section 13(8), it is clearly stipulated that the mortgagor, i.e. the borrower, who is otherwise called as a debtor, retains his full right to redeem the property by tendering all the dues to the secured creditor at any time before the date fixed for sale or transfer. Under Sub-section (8) of Section 13, as noted earlier, the secured asset should not be sold or transferred by the secured creditor when such tender is made by the borrower at the last moment before the sale or transfer. The said Sub-section also states that no further step should be taken by the secured creditor for transfer or sale of that secured asset. We find no reason to state that the pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the balance in accordance with the provisions of Section 13(8). Even after the writ proceedings before the High Court was 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 April 2016. The 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 (supra). 7 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. The bank ..... X X X X Extracts X X X X X X X X Extracts X X X X
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