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Judgment
Instant appeal has been preferred against the order dated 26.9.2025 passed by the Learned DRT, Cuttack in S.A. 149 of 2025 (M/s. Mahaprasad Rice Mill -vs- Punjab National Bank).
Respondent herein is the Borrower of the Appellant. Account became irregular and classified as N.P.A. on 27.12.2024. Notice under Section 13 (2) of the SARFAESI Act, 2002 (hereinafter referred to as the 'Act') dated 10.02.2025, was issued demanding an amount of Rs.46,84,093.00. Notice under Section 13 (4) of the Act was issued on 17.4.2025; Notice under Rule 8 (6) of the Security Interest (Enforcement) Rules, 2002 was issued on 5.8.2025 which was published on 6.8.2025. Date of sale was 8.9.2025 with reserve price of Rs.62,95,000.00. Sale was conducted on 8.9.2025 for Rs.63,45,000.00 which was duly confirmed. Sale Certificate was issued on 18.9.2025.
S.A. under Section 17 of the Act was filed by the Respondent for setting aside the e-Auction Sale Notice date 5.8.2025 and the sale conducted on 8.9.25 with an I.A. 1252 of 2025 to restrain the Secured Creditor from proceeding further. Learned DRT passed the impugned order asking the Respondent to deposit the balance amount of Rs.22,48,368.00 on or before 24.10.2025. In case of default, the Bank would be at liberty to proceed ahead. An amount of Rs.20.00 lac was also deposited by the Respondent on the date of the order dated 26.9.2025. Respondent Bank was restrained from proceeding further. I.A. 1252 of 2025 was allowed.
Learned Counsel for Appellant would submit that Learned DRT has passed an illegal order. Sale was already conducted and Sale Certificate was issued. Once the Sale Notice was published, no question of redemption arises in favour of the Borrower. There was no ground taken in the I.A. that the S.A. Applicant wants to pay the dues of the Bank.
Per contra, Learned Counsel for Respondent would submit that the Respondents have deposited the amount as per the direction of the DRT. A plea of issue of redemption does not arise as the sale was challenged on legal grounds.
Admittedly, the Respondent herein is the Borrower of the Appellant who preferred the S.A. seeking relief of quashing the e-Auction Sale Notice as well as the sale conducted on 8.9.2025. S.A. was filed on 12.9.2025, i.e., after conclusion of the sale proceedings. Law is well settled in Celir LLP -vs- Bafna Motors (Mumbai) Private Limited & Others [(2024) 2 SCC 1] as well as M. Rajendra & Others -vs- KPK Oils And Protiens India Private Limited & Others (2025 SCC OnLine SC 2036) that right of redemption extinguishes as soon as the Sale Notice is published. In the present case, Learned DRT passed an order knowing it fully well that since the sale process has already been completed, granting liberty to the S.A. Applicant to deposit the amount; impliedly gives relief of redemption which is not permissible under the law. Grounds taken in the S.A. have to be considered and decided in the pending S.A. But without considering those grounds or without finding any prima facie case in favour of the S.A. Applicant, Learned DRT simply passed a blanket order of depositing the dues impliedly granting relief of redemption without considering legal proposition of law that the right of redemption extinguishes as soon as the Sale Notice is published.
Accordingly, in such circumstances, the impugned order cannot be sustained and is liable to be set aside. Misc. Appeal deserved to be allowed.
ORDER
Misc. Appeal is allowed. Impugned order dated 26.9.2025, as far as it restrains the Bank from proceeding further, is set aside.
No order as to costs.
File be consigned to Record room.
Copy of the Judgment/Final Order be uploaded in the Tribunal's Website.
Order signed, dated and pronounced in open Court.