The observations came while setting aside a Bombay High Court ruling that, in the apex court’s words, had left the auction purchasers ‘high and dry‘ by allowing borrowers to redeem the mortgage of a secured asset even after the auction proceedings had attained finality.
The guarantor, in this case, had defaulted on repaying ₹123.83 crores extended to it by a bank as lease rental discounting credit.
The bank proceeded to eventually auction the borrower’s and the guarantor’s secured assets under the SARFAESI Act but failed to complete the auction.
In the meantime, the borrowers moved a Securitisation Application before a Debts Recovery Tribunal (DRT) in Mumbai, challenging the demand notice issued under Section 13(2) of the SARFAESI Act and to quash the sale notice.
The asset eventually got auctioned, upon which the borrowers moved the High Court for the redemption of its mortgage, which was allowed.
This led to the instant appeal by the auction purchaser before the apex court.
Source: Barandbench
