Borrowers Can’t Redeem Property After SARFAESI Notice Publication: SC

The Supreme Court on Monday held borrowers cannot redeem property after publication of auction notice as purchasers acquire indefeasible rights once sale certificate is issued by creditor banks and financial institutions under the SARFAESI Act.

- Press Trust Of India

A bench of Justices J B Pardiwala and R Mahadevan rued the fact that the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act) was enacted in 2002 to protect banks and financial, but certain ambiguities in its Section 13(8) and a few rules had prolonged litigations.

The top court also held that the 2016 amendment to Section 13(8) of the SARFAESI Act, which extinguishes a borrower's right of redemption once the secured creditor publishes an auction notice, will apply even to loans taken before the amendment came into force if the default occurred after September 1, 2016.