TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: Whether the borrower could be allowed to retain or recover the mortgaged property on payment of only the reserve price or the highest bid amount without clearing the full outstanding dues under the SARFAESI framework.
Analysis: The bank had already invoked the measures under the SARFAESI Act, taken possession under the statutory procedure, and proceeded to auction the secured asset. The amount offered or deposited by the borrower was far below the total outstanding dues. The Court held that Section 13(8) permits restraint on sale only when the borrower tenders the entire amount due together with costs, charges and expenses before the relevant stage, and a partial payment based on reserve price or an unmaterialised highest bid does not discharge the borrower's liability. The Court further held that the bids received in the aborted auction did not amount to sale consideration actually realised and could not justify directing release of the secured asset to the borrower.
Conclusion: The direction to release the secured property on payment of a lesser amount was unsustainable; the borrower could not claim discharge of the entire liability on that basis.
Final Conclusion: The order of the Division Bench was set aside, the Single Judge's order was restored, and the bank was left free to proceed with the auction in accordance with law while the borrower's liability remained subject to determination under the pending securitisation application.
Ratio Decidendi: Under Section 13(8) of the SARFAESI Act, a borrower can prevent sale of the secured asset only by tendering the full dues with attendant costs and expenses before the prescribed stage; partial payment or reliance on a reserve price or unfinalised bid does not extinguish the secured creditor's right to proceed.
TaxTMI 
