SARFAESI auction sale finality: sale certificate completes title, redemption ends without valid tender, and overriding provisions prevail.

Under the SARFAESI regime, a public auction sale of a secured asset attains finality on issuance of the sale certificate and does not require registration under the Registration Act. The borrowers' right of redemption survives only until valid completion of the sale; here, no legally effective tender was made before that point, and later payments by other modes did not amount to compliance. Sections 35 and 37 did not defeat the completed sale, because SARFAESI's overriding effect prevailed over inconsistent general law. The auction purchaser's title therefore remained undisturbed.

---

---

Issues: (i) Whether, in a public auction under the SARFAESI framework, the sale becomes complete and absolute on issuance of the sale certificate without registration; (ii) whether the borrowers retained any right of redemption despite the auction and issuance of the sale certificate; and (iii) whether Sections 35 and 37 of the SARFAESI Act operated so as to permit the borrowers to defeat the completed sale.

Issue (i): Whether, in a public auction under the SARFAESI framework, the sale becomes complete and absolute on issuance of the sale certificate without registration.

Analysis: The sale was held pursuant to measures under Section 13(4) of the SARFAESI Act and culminated in issuance of the sale certificate under Rule 9(7) of the Security Interest (Enforcement) Rules. The governing scheme, read with Section 17(2)(xii) of the Registration Act, did not require registration of such a sale certificate. The Court treated the sale as having become final once confirmed in favour of the auction purchaser and the certificate issued.

Conclusion: The sale was complete and absolute upon issuance of the sale certificate and did not require registration.

Issue (ii): Whether the borrowers retained any right of redemption despite the auction and issuance of the sale certificate.

Analysis: The right of redemption under Section 60 of the Transfer of Property Act is available only until the mortgage is validly foreclosed or the sale is completed. On the facts, the borrowers did not make a valid tender to the secured creditor before the sale stood completed, and their later attempts by depositing amounts in another account, by cheques, and by demand drafts were not accepted as valid compliance. The Court therefore held that the borrowers had failed to exercise redemption in the manner known to law.

Conclusion: The borrowers had no surviving right of redemption after the sale became final and their tender was not valid.

Issue (iii): Whether Sections 35 and 37 of the SARFAESI Act operated so as to permit the borrowers to defeat the completed sale.

Analysis: Section 37 preserves other laws only to the extent they are not inconsistent with SARFAESI, while Section 35 gives SARFAESI overriding effect. Reading both provisions conjointly, the Court held that any protected right under general law could not prevail over a sale that had already been completed under the SARFAESI mechanism and in compliance with Section 13(8) as it then stood.

Conclusion: Sections 35 and 37 did not aid the borrowers, and the completed SARFAESI sale prevailed.

Final Conclusion: The appellants failed to establish a legally valid tender or any subsisting right to reopen the auction process, so the auction purchaser's title remained undisturbed.

Ratio Decidendi: Under the SARFAESI regime as applicable here, a secured asset sold in public auction attains finality on issuance of the sale certificate, and the borrower's right of redemption is lost if no valid tender is made within the statutory time before that sale is completed.

---