Court upholds bank's decision to cancel e-auction, accept OTS, borrower's redemption right preserved.

The court dismissed the writ petition, upholding the bank's decision to cancel the e-auction and accept the One Time Settlement (OTS). It emphasized that the borrower's right of redemption was not extinguished until the sale certificate was registered. The court held that the bank acted within its rights to accept a higher amount under the OTS, which was deemed in the larger public interest. The interim order was vacated, and no costs were awarded.

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Issues Involved:
1. Quashing of sale/e-auction conducted on 16.03.2021.
2. Validity of the cancellation of the e-auction due to One Time Settlement (OTS).
3. Interpretation of Section 13(8) of the SARFAESI Act post-amendment.
4. Right of redemption of the borrower under Section 60 of the Transfer of Property Act, 1882.

Detailed Analysis:

1. Quashing of Sale/E-Auction Conducted on 16.03.2021
The petitioner sought quashing of the sale/e-auction conducted on 16.03.2021 for plot Nos. A11 to A15, Maheshwaram Revenue Village and Mandal, Ranga Reddy District. The petitioner participated in the auction, his bid was accepted, and he paid the full amount, after which he was issued a sale certificate on 25.03.2021. However, the sale was later canceled by the bank due to a One Time Settlement (OTS) with the borrower.

2. Validity of the Cancellation of the E-Auction Due to One Time Settlement (OTS)
The bank canceled the e-auction upon the borrower settling the loan under an OTS scheme. The petitioner contended that the sale was already concluded and that the bank could not legally cancel it. The bank argued that the authorized officer had the right to cancel the sale at any point without assigning reasons, as per clause 27 of the terms and conditions of the sale notice. The bank refunded the amount paid by the petitioner.

3. Interpretation of Section 13(8) of the SARFAESI Act Post-Amendment
The petitioner argued that post-amendment in 2016, Section 13(8) of the SARFAESI Act allows the borrower to redeem the property only until the date of the sale notice, not beyond. The court analyzed the amended Section 13(8), which states that if the dues are tendered before the publication of the auction notice, the secured asset shall not be sold. The court referred to multiple judgments and concluded that the right of redemption is not lost immediately upon the highest bid being accepted; it is extinguished only upon the registration of the sale certificate.

4. Right of Redemption of the Borrower under Section 60 of the Transfer of Property Act, 1882
The court examined Section 60 of the Transfer of Property Act, which provides the mortgagor the right to redeem the property until the sale certificate is registered. The court held that the borrower's right of redemption persists until the sale certificate is registered, and the bank's decision to accept the OTS was within its discretion and in its best interest.

Conclusion:
The court dismissed the writ petition, upholding the bank's decision to cancel the e-auction and accept the OTS. The court emphasized that the borrower's right of redemption was not extinguished until the sale certificate was registered, and the bank acted within its rights to accept a higher amount under the OTS, which was in the larger public interest. The interim order was vacated, and there was no order as to costs.

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