Even if the amendment of Section 13 (8) of SARFAESI Act, 2002, Secured Creditor is bound to afford to the Borrower a clear 30 days notice period under Rule 8(6) of Security Interest (Enforcement) Rules, 2002 to enable him to exercise his right of redemption | A notice under Rule 9(1) of Security Interest (Enforcement) Rules, 2002 cannot be published prior to expiry of 30 days period – Union Bank of India and Anr. Vs. Dilshad Elahi – DRAT Kolkata

Hon’ble DRAT Kolkata held that:

(i) Right of redemption of the Borrower is a sacrosanct right as provided under the law. The amended provisions of Section 13(8) of the SARFAESI Act, 2002 bring in a radical change, inasmuch as the right of the borrower to redeem the secured asset stands extinguished thereunder on the very date of publication of the notice for public auction under Rule 9(1) of the of the Security Interest (Enforcement) Rules, 2002. In effect, the right of redemption available to the borrower under the present statutory regime stands drastically curtailed and would be available only till the date of publication of the notice under Rule 9 (1) of the Rules and not till completion of the sale or transfer of the secured asset in favour of the Auction Purchaser.
(ii) However, it is significant to note that Rule 8 (6) of the Rules still continues to remain the same and thereunder, the Authorized Officer of the secured creditor must necessarily serve upon the borrower a notice of 30 days for sale of the immovable secured asset taking recourse to one of the options available under Rule 8 (5) thereof. Therefore, even if the amendment of Section 13 (8) of the Act, Secured Creditor is bound to afford to the Borrower a clear 30 days notice period under Rule 8 (6) to enable him to exercise his right of redemption. In consequence, a notice under Rule 9 (1) cannot be published prior to expiry of 30 days period.
(iii) In the new scenario post amendment of Section 13 (8) of the Act, such right of redemption would stand terminated immediately upon publication of the Sale Notice under Rule 9 (1) of the Rules.

Even if the amendment of Section 13 (8) of SARFAESI Act, 2002, Secured Creditor is bound to afford to the Borrower a clear 30 days notice period under Rule 8(6) of Security Interest (Enforcement) Rules, 2002 to enable him to exercise his right of redemption | A notice under Rule 9(1) of Security Interest (Enforcement) Rules, 2002 cannot be published prior to expiry of 30 days period – Union Bank of India and Anr. Vs. Dilshad Elahi – DRAT Kolkata Read Post »