Upto which date a mortgagor/borrower has the right to redeem the mortgage in the light of the amendment to Section 13(8) of the SARFAESI Act? – M/s Pal Alloys & Metal India Pvt. Ltd. and others Vs. Allahabad Bank and others – Punjab & Haryana High Court
December 27, 2021
The Hon’ble High Court held that the amended Section 13(8) of the SARFAESI Act merely prohibits a secured creditor from proceeding further with the transfer of the secured asset by way of lease, assignment or sale; a restriction on the right of the mortgagee to deal with the property is not exactly the same as the equity of redemption available to the mortgagor; the payment of the amount mentioned in Section 13(8) of the SARFAESI Act ties the hands of the mortgagee (secured creditor) from exercising any of the powers conferred under the Act; that redemption comes later; extinction of the right of redemption comes much later than the sale notice; and the right of redemption is not lost immediately upon the highest bid made by a purchaser in an auction being accepted. It also held that such a right would continue till the execution of a conveyance i.e. issuance of sale certificate in favour of the mortgagee.
