CELIR LLP versus BAFNA MOTORS (MUMBAI) PVT. LTD. & ORS.

Citation: [2023] 13 S.C.R. 53 · Decided: 21-09-2023 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[2023] 13 S.C.R. 53 : 2023 INSC 838
53
CASE DETAILS
CELIR LLP
v.
 BAFNA MOTORS (MUMBAI) PVT. LTD. & ORS.
(Civil Appeal Nos. 5542 - 5543 of 2023)
SEPTEMBER 21, 2023
[DR. DHANANJAYA Y. CHANDRACHUD, CJI AND 
J. B. PARDIWALA, J.]
HEADNOTES
Issues for consideration: 
The present appeals by the appellant-auction purchaser were 
against the judgment passed by the High Court by which it allowed 
the writ petition filed by respondent no.1-borrowers and directed the 
respondent no.3-Bank to permit the borrowers to redeem the mortgage 
of the secured asset after the auction proceedings had attained finality. 
The questions for consideration were:-
1. Whether the High Court was justified in exercising its writ 
jurisdiction under Article 226 of the Constitution more particularly 
when the alternative remedy available to the Borrowers had already 
been availed of.
2. Whether the confirmation of sale by the Bank under Rule 9(2) of 
the Security Interest (Enforcement) Rules, 2002 invests the successful 
auction purchaser with a vested right.
3. What is the impact of the amended Section 13(8) of the 
Securitization and Reconstruction of Financial Assets and Enforcement 
of Securities Interest Act, 2002 (SARFAESI Act) on the Borrowers’ 
right of redemption in an auction conducted under the SARFAESI Act. 
What is the effect of amendment to Section 13(8) of the SARFAESI 
Act read with Section 60 of the Transfer of Property Act, 1882.
4. Whether a Bank after having confirmed the sale under Rule 
9(2), can withhold the sale certificate under Rule 9(6) of the Rules of 
2002 and enter into a private arrangement with a borrower.
SUPREME COURT REPORTS 
[2023] 13 S.C.R.
54
5. Whether the High Court under Article 226, could have applied 
equitable considerations to override the outcome contemplated by the 
statutory auction process prescribed by the SARFAESI Act.
6. Whether the right of redemption of mortgage stood extinguished 
upon publication of notice of auction. Till what point of time the right 
of redemption of mortgage can be exercised in respect of secured asset 
under the SARFAESI Act.
Securitization and Reconstruction of Financial Assets and 
Enforcement of Securities Interest Act, 2002 (SARFAESI Act) – 
s.17 – Constitution of India – Art. 226 - Exercise of writ jurisdiction 
u/ Art.226 of the Constitution when alternative remedy u/s.17 of 
SARFAESI Act already availed by the borrower – If justiﬁ ed.
Held: The Supreme Court has time and again, reminded the High 
Courts that they should not entertain petition under Article 226 of the 
Constitution if an eﬀ ective remedy is available to the aggrieved person 
under the provisions of the SARFAESI Act – In the present case, the 
High Court was not justiﬁ ed in exercising its writ jurisdiction under 
Article 226 of the Constitution more particularly when the borrowers had 
already availed the alternative remedy available to them under s.17 of the 
SARFAESI Act. [Paras 92, 105]
Security Interest (Enforcement) Rules, 2002 – r.9(2) - Whether 
the conﬁ rmation of sale by the Bank under r.9(2) invests the successful 
auction purchaser with a vested right.
Held: The conﬁ rmation of sale by the Bank under Rule 9(2) of the 
Rules of 2002 invests the successful auction purchaser with a vested right 
to obtain a certiﬁ cate of sale of the immovable property in form given 
in appendix (V) to the Rules i.e., in accordance with Rule 9(6) of the 
SARFAESI. [Para 105]
Securitization and Reconstruction of Financial Assets and 
Enforcement of Securities Interest Act, 2002 (SARFAESI Act) – 
ss.13(8) and 35 – Transfer of Property Act, 1882 – s.60 – Impact 
of amended s.13(8) of SARFAESI Act on the Borrowers’ right of 
redemption in an auction conducted under the SARFAESI Act – Eﬀ ect 
of amendment to s.13(8) of SARFAESI Act r/w s.60 of the Transfer 
of Property Act, 1882.
Mortgage – Right of redemption of mortgage.
55
Held: 1. In accordance with the unamended Section 13(8) of the 
SARFAESI Act, the right of the borrower to redeem the secured asset was 
available till the sale or transfer of such secured asset – The borrower’s 
right of redemption did not stand terminated on the date of the auction 
sale of the secured asset itself and remained alive till the transfer was 
completed in favour of the auction purchaser, by registration of the sale 
certiﬁ cate and delivery of possession of the secured asset – However, 
the amended provisions of Section 13(8) of the SARFAESI Act, make 
it clear that the right o
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