Allowed

Ashok Agarwal v. Arcil

DRT28 Aug 2024SA/363/2023

Case brief

AI extract

What is this about?

A Securitization Application was allowed setting aside an auction sale due to procedural violations regarding Rule 8(6) notices and inadequate property valuation under the SARFAESI Act.

What did the court decide?

Auction sale set aside; Sale consideration refunded with interest; Property possession returned to applicant.

What the court decided

AI extract

Ashok Agarwal versus Arcil — Company and Corporate | DRT (2024)

¶136

"31. Right of redemption of the Borrower is a sacrosanct right as provided under the law, The amended provisions of Section 13 (8) of the Act 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 Rules. 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, However, it is significant to note that Rule I (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 I (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. In the new scenario post amendment of Section 13 (B) of the Act, such right of redemption would stand terminated immediately upon publication of the Sale Notice under Rule 9 (1) of the Rules, Proviso attached to Rule 9 (1) simply provides that if the sale of immoveable property by one of the methods specified by 5ub-rule (5) ot Rule 8 fails, sale is required to be conducted again, The Authorised Officer shall serve, affix and publish notice of sale on not less than 15 days to the Borrower for any subsequent sale. It means that in case of subsequent sale, the period of 30 days, as required under Rule 9 (1) is curtailed to 15 days. This proviso of Rule 9 (1) in no manner curtailed the period of notice provided under Rule I (6). Had it been the intention of the Legislature, that period provided under Rule 8 (6) would also have to be amended by the legislature. But intentionally Rule I (6) is not amended but the period in subsequent sale is curtailed to 15 days, It means that

Ashok Agarwal v. Arcil

Case brief

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Ashok Agarwal v. Arcil

Case brief

What is this about?

What did the court decide?

What the court decided

Issues for consideration

Cases cited

Parties & counsel

Coram

Case details

Similar cases

Suniil Rangnath Kale versus Mahindra Rural Housing Finance Limited

Union Bank of India versus M/S Magnifico Megacity LLP

Shachn Tea Factory versus Central Bank of India

Canara Bank (Syndicate Bank) versus M/S Hafifa Nasari Chemicals

A compact analysis

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