Summary
Applying the version of section 13(8) governing the 2016 sale, the Supreme Court rejected a guarantor’s attempt to redeem mortgaged property after a registered sale deed had been executed. He had paid Rs.7 lakh but did not tender the full secured debt with costs, charges and expenses, despite opportunities during DRT and writ proceedings. Mere willingness and partial payment did not meet the statutory condition. The bank was, however, directed to refund his Rs.7 lakh with 9% annual interest within eight weeks.
Issues
- Whether partial payment and stated willingness to clear the loan preserved redemption after completion of the sale.
- Whether the guarantor was entitled to return of his deposit with interest.
Provisions considered
- Section 13(8), version quoted and applied to the sale, Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002Required tender of the secured creditor’s dues together with costs, charges and expenses before the stipulated sale or transfer stage; the appellant had not complied. (¶¶ 5, 6)
Held
- Under the statutory version quoted in the judgment, protection against sale or transfer required actual tender of all dues with costs, charges and expenses. The appellant’s partial payment of Rs.7 lakh and stated readiness were insufficient; he did not pay the balance even after withdrawing the writ proceedings to pursue the DRT remedy. (¶¶ 1, 3, 5, 6)
- Applying Mathew Varghese to this transaction, the Court held that redemption stood extinguished on execution of the registered sale deed. No Tribunal stay prevented confirmation or the later conveyance, and the guarantor had failed to fulfil the tender requirement before completion. The holding concerns the statutory text applied to this sale. (¶¶ 1, 4, 5, 6)
- Failure of the redemption claim did not permit retention of the appellant’s deposit. The bank was directed to refund Rs.7 lakh with 9% annual interest from the deposit date until repayment, within eight weeks. (¶ 7)
Result
Appeal disposed of without costs. Challenge to the completed sale rejected, subject to refund of Rs.7 lakh with 9% annual interest from deposit until payment within eight weeks.