SARFAESI auction sale finality: unilateral cancellation of a sale certificate cannot defeat the auction purchaser's vested rights.

After confirmation of a SARFAESI auction sale and issuance of the sale certificate, the Authorised Officer had no power to cancel the concluded sale unilaterally; such cancellation was without jurisdiction and offended natural justice. The sale certificate issued by an Authorised Officer was not covered by the Registration Act exemption applicable to civil or revenue officers, but non-registration did not defeat the purchaser's title arising from a completed sale. A later settlement between the borrower and secured creditor could not revive redemption rights or displace the auction purchaser's vested rights. The purchaser was entitled to possession and documents needed for mutation, and the cancellation letter was set aside.

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Issues: (i) Whether the Authorised Officer could unilaterally cancel a sale certificate after the auction sale had been confirmed and the sale certificate had been issued; (ii) whether the sale certificate issued by the Authorised Officer required registration and whether non-registration defeated the purchaser's title; (iii) whether the borrower's subsequent settlement with the secured creditor could displace the auction purchaser's rights and entitlement to possession.

Issue (i): Whether the Authorised Officer could unilaterally cancel a sale certificate after the auction sale had been confirmed and the sale certificate had been issued.

Analysis: Once the auction was confirmed and the sale certificate was issued under the SARFAESI framework, the sale had attained finality and the certificate operated as evidence of the title already acquired by the purchaser. The Act and the Rules do not confer any power on the Authorised Officer to cancel a concluded sale certificate on his own. Cancellation without notice to the auction purchaser also offended the principles of natural justice. The power to annul such a concluded transaction lay only with a competent court or tribunal, not with the issuing officer.

Conclusion: The unilateral cancellation was without jurisdiction and could not be sustained.

Issue (ii): Whether the sale certificate issued by the Authorised Officer required registration and whether non-registration defeated the purchaser's title.

Analysis: A completed auction sale vests title in the purchaser, and the sale certificate is only the documentary evidence of that title. While a certificate of sale issued by a civil or revenue officer enjoys exemption under Section 17(2)(xii) of the Registration Act, a sale certificate issued by an Authorised Officer does not fall within that exemption. However, the absence of prior notice regarding stamp duty and registration could not be used to nullify an otherwise valid concluded sale. Non-registration did not undo the auction purchaser's substantive rights arising from confirmation of sale.

Conclusion: The sale certificate was not exempt from registration, but non-registration did not invalidate the completed sale or defeat the purchaser's title.

Issue (iii): Whether the borrower's subsequent settlement with the secured creditor could displace the auction purchaser's rights and entitlement to possession.

Analysis: The borrower's right of redemption under Section 60 of the Transfer of Property Act and the protective mechanism under Section 13(8) of the SARFAESI Act operate only until the date fixed for sale or transfer, or until the sale is completed in accordance with law. After confirmation of sale and issuance of the sale certificate, the borrower could not revive redemption rights by entering into a later settlement with the secured creditor. The settled auction purchaser's right to the property could not be extinguished by a subsequent bilateral arrangement to which the purchaser was not a party. The purchaser was therefore entitled to possession and to the documents necessary for mutation of revenue records.

Conclusion: The borrower's later settlement did not affect the auction purchaser's concluded rights, and the purchaser was entitled to physical possession.

Final Conclusion: The impugned cancellation letter was set aside, the auction purchaser's completed sale was upheld, and directions were issued for delivery of physical possession and consequential facilitation of the purchaser's title rights.

Ratio Decidendi: After confirmation of a SARFAESI auction sale and issuance of the sale certificate, the Authorised Officer has no power to cancel the sale unilaterally, and a subsequent settlement between the secured creditor and the borrower cannot defeat the auction purchaser's vested rights.

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