Significance of Sale Certificate Registration and Possession Handover.
The Supreme Court of India recently passed a judgment in the case of Surinder Pal Singh v/s Vijaya Bank and others; Civil Appeal No.6843 OF 2023, which has significant implications for borrowers and auction purchasers under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).
The case concerned the redemption of a mortgaged property, which had been put up for auction by the bank. The Appellant, who was the auction purchaser, had deposited the entire auction money, but the borrowers later redeemed the property by paying the outstanding amount to the bank. The sale certificate had not been registered, and possession of the property had not been handed over to the Appellant.
The Hon’ble Supreme Court held that under the unamended provision of Section 13(8) of the SARFAESI Act, the borrower has the right to redeem the property until the sale certificate is registered and possession is handed over to the auction purchaser. The Apex Court also noted that the amended provision of Section 13(8) extinguishes the borrower’s right of redemption on the date of publication of the notice for public auction under Rule 9(1) of the Rules of 2002.
This decision of the Hon’ble Court has significant implications for borrowers and auction purchasers, since now the Borrowers have a limited window of opportunity to redeem their mortgaged properties, which ends when the sale certificate is registered and possession is handed over to the auction purchaser. Auction purchasers, on the other hand, must ensure that they obtain possession of the property and register the sale certificate as soon as possible to avoid any potential challenges to their ownership.
Author of this article:
Adv. Ravish Bhatt,
Partner, R&D Law Chambers,
Dual Qualified Lawyer Solicitor | International Tax Affiliate
Connect with Mr. Bhatt on Linkedin: https://www.linkedin.com/in/adit-ravishbhatt/
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