HC dismisses plea against SARFAESI auction; says Right to redeem ends after auction notice
10/12/2025
JAMMU, Dec 9: The High Court of Jammu & Kashmir and Ladakh has dismissed a petition filed by M/s Gogi Motor Store challenging the SARFAESI auction of its mortgaged residential property by Citizen's Co-operative Bank Ltd., holding that the borrower's right of redemption stands extinguished once the auction notice is published.
A Division Bench comprising Justice Sindhu Sharma and Justice Shahzad Azeem passed the judgment in WP(C) No. 2274/2025. The verdict was authored by Justice Azeem.
According to the order, the petitioner had availed a Cash Credit Limit of ?49 lakh which later became irregular, leading to its classification as NPA. After issuance of notices under Sections 13(2) and 13(4) of the SARFAESI Act, the Bank published the Tender-cum-Auction Notice dated 17 June 2025, pursuant to which Mayank Gupta emerged as the successful bidder, having deposited the entire bid amount of Rs 71.02 lakh.
Referring to the Supreme Court judgment in M. Rajendran vs KPK Oils and Proteins India Pvt. Ltd., the High Court reiterated that under Section 13(8), a borrower may redeem the secured asset only before publication of the auction notice, and any deposit made thereafter cannot revive the right of redemption.
"Once the Auction Notice is published, the right of redemption of the petitioner has extinguished," the Bench observed, noting that the writ petition was filed only after the auction process had concluded in favour of the successful bidder.
Finding no merit in the challenge, the Court dismissed the petition and vacated all interim directions.
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