DWARIKA PRASAD versus STATE OF UTTAR PRADESH AND ORS.

Citation: [2018] 3 S.C.R. 29 · Decided: 06-03-2018 · Supreme Court of India · Bench: DIPAK MISRA · Disposal: Disposed off
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Judgment (excerpt)

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DWARIKA PRASAD
v.
STATE OF UTTAR PRADESH AND ORS.
(Civil Appeal No. 000148 of 2018)
MARCH 06, 2018
[DIPAK MISRA, CJI, A. M. KHANWILKAR AND
DR. D. Y. CHANDRACHUD, JJ.]
Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 –  s. 13 (8) – Right to
redemption – Extinguishment of – Held: s. 13(8) mandates that it is
only where the dues of the secured creditor are tendered together
with costs, charges and expenses before the date fixed for sale or
transfer that the secured asset is not to be sold or transferred – On
facts, appellant guarantor to sanctioned loan, created an equitable
mortgage in respect of immovable property and the said property
was auctioned by the bank – Appellant was aware of the proceedings
initiated by the bank for asserting its right to recover its dues by
selling the property – While appellant deposited an amount of
Rs 7,00,000/- with the bank, but failure to deposit the balance in
accordance with the provisions of s.13(8) – Even after the writ
proceedings before the High Court was withdrawn, appellant did
not deposit the balance due together with the costs, charges and
expenses – Sale was confirmed and registered sale deed was executed
– Thus, the right to redemption stood extinguished on the execution
of the registered sale deed – However, appellant to be refunded the
deposit of Rs 7,00,000/- with interest at 9% p.a.
The issue arose for consideration whether the right of the
appellant-mortgagor to redeem the property survives on the
execution of the registered sale deed.
Disposing of the appeal, the Court
HELD : The appellant failed to comply with the provisions
of Section 13(8) of the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002.
The statute mandates that it is only where the dues of the secured
creditor are tendered together with costs, charges and expenses
  [2018]  3 S.C.R. 29
  29
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SUPREME COURT REPORTS
[2018] 3 S.C.R.
before the date fixed for sale or transfer that the secured asset is
not to be sold or transferred. The appellant was aware of the
proceedings initiated by the bank for asserting its right to recover
its dues by selling the property. The appellant moved the DRT in
Securitization Application. During the pendency of those
proceedings, orders were passed by the Tribunal on 1 February
2016 and 3 February 2016. The appellant moved the High Court
which restrained the bank and the auction purchaser from
executing the sale deed until 15 March 2016. The stay was
extended till 28 March 2016 by which date the appellant was to
deposit an amount of Rs 7,00,000/-. The balance was required to
be deposited by 30 April 2016. While appellant deposited an
amount of Rs 7,00,000/- with the bank, he failed to deposit the
balance in accordance with the provisions of Section 13(8). Even
after the writ proceedings before the High Court was withdrawn,
the appellant did not deposit the balance due together with the
costs, charges and expenses. The sale was confirmed, a sale
certificate was issued and a registered sale deed was executed
on 12 April 2016. The right to redemption stands extinguished
on the execution of the registered sale deed. The appellant, is
however, entitled to a refund of his deposit of Rs 7,00,000/- with
interest at 9% per annum from the date of deposit till payment.
[Para 6, 7] [35-B-G]
Mathew Varghese v M. Amritha Kumar [2014] 2 SCR
736 : (2014) 5 SCC 610 – relied on.
Case Law Reference
[2014] 2 SCR 736
  relied on
Para 6
CIVIL APPELLATE JURISDICTION : Civil Appeal No.000148
of 2018.
From the Judgment and Order dated 24.05.2016 of the High Court
of Judicature at Allahabad in Civil Misc. Writ Petition No.24089 of 2016.
Nalin Tripathi, R.K. Maheshwari, Ms. Sampa Sengupta Ray,
Rameshwar Prasad Goyal, Advs for the Appellant.
Sanjay Kumar Tyagi, Aviral Saxena, Amit Sharma,  Ms. Ekta
Choudhary,  T. Mahipal, Sri Ram Krishna, Abhas Kumar, Deepak Sharma,
Advs for the Respondents.
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The Judgment of the Court was delivered by
DR. D.Y. CHANDRACHUD, J. 1 The appellant was a
guarantor to a loan sanctioned for educational purposes to one Jitendra
Kumar.  Under the letter of sanction dated 20 June 2009, there was a
‘repayment holiday’ of 24 months (comprised of a grace period of 12
months and an additional 12 months) or six months after the borrower
obtained a job, whichever was earlier.  Repayment was to commence
from 20 June 2011. In order t
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