Single-Notice Rule and Extinction of Redemption on Publication: Supreme Court’s Definitive Construction of Amended Section 13(8) SARFAESI

Case: M. Rajendran & Ors. v. M/s KPK Oils and Proteins India Pvt. Ltd. & Ors., Civil Appeal Nos. 12174–12175 of 2025 (arising out of SLP(C) Nos. 11068 & 14696 of 2023)

Citation: 2025 INSC 1137; Court: Supreme Court of India; Bench: J.B. Pardiwala, J. (author) and R. Mahadevan, J.; Date: 22 September 2025

Area: Enforcement of security interest under the SARFAESI Act; Borrower’s right of redemption; Auction process; Statutory interpretation of Rules 8 and 9 of the SARFAESI Rules, 2002.

Introduction

This reportable decision decisively settles persistent controversy over the scope and timing of a borrower’s right of redemption under Section 13(8) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI), post the 2016 amendment. Building on CELIR LLP v. BAFNA MOTORS (MUMBAI) PVT. LTD. (2024) 2 SCC 1, the Supreme Court (i) reaffirms that the borrower’s right of redemption is drastically curtailed and extinguishes upon publication of the sale notice under the amended regime, (ii) clarifies that the SARFAESI Rules envisage a single composite notice of sale rather than multiple notices, (iii) explains, for all sale modes (auction, tender, quotations, private treaty), what “publication” means and how to compute the extinguishment point, and (iv) holds that the amended Section 13(8) applies to enforcement steps taken after 01.09.2016 even if the loan was sanctioned earlier.

The case arose out of an auction of a secured immovable property following borrower default. After the auction sale was concluded and sale certificate issued to the auction purchaser, the Madras High Court allowed the borrower’s writ, quashed the sale certificate, and permitted redemption conditioned on refund to the auction purchaser with interest. The Supreme Court set aside the High Court’s order, restored the auction purchaser’s rights, and laid down a structured construction of Section 13(8) read with Rules 8 and 9 of the SARFAESI Rules.

Summary of the Judgment

Writ not maintainable in the face of efficacious alternate remedy: Reiterating Bafna Motors, the Court held the High Court ought not to have exercised writ jurisdiction when the borrower had already invoked Section 17 SARFAESI before the DRT (para 110.1).
Borrower’s right of redemption under amended Section 13(8):
- Under the pre-amendment regime, the borrower could redeem till the sale was completed by a registered instrument (Mathew Varghese v. Amritha Kumar, (2014) 5 SCC 610).
- Under the amended Section 13(8), the right of redemption is “drastically curtailed” and stands extinguished “on the very date of publication of the notice for public auction” (Bafna Motors; see para 110.3), with this judgment clarifying what “publication” means across all sale modes.
Single composite notice regime: Rules 8(6), its proviso, 8(7), and 9(1) speak of a single composite “notice of sale” that must be (as applicable): served on the borrower, published in newspapers (for auction/tender), affixed on the property, and uploaded on the creditor’s website; there is no requirement of two distinct 30-day notices (paras 137–169).
“Publication” in Section 13(8): The term must be read as “valid publication of the composite notice of sale” in the form the Rules require for the chosen mode. Practically:
- For auction/tender: publication is by Appendix IV-A newspaper notice (and service etc.);
- For private treaty/quotations: publication is by serving the notice of sale to the borrower, affixing, and uploading (no newspaper ad).
The 30-day embargo to sale under Rule 9(1) runs from the later of service/affixation/newspaper publication (as applicable) (paras 169 and 170–178). The borrower’s redemption right lasts only up to the date of such valid publication and ceases thereafter.
Simultaneous service and publication permitted: There is no mandatory gap between service on the borrower and newspaper publication; both may be done the same day, provided the 30-day Rule 9(1) gap to the sale date is maintained (paras 165, 169(v)).
Vested right of auction purchaser post-confirmation: Once sale is confirmed under Rule 9(2), the purchaser has a vested right to a sale certificate; the bank cannot withhold the sale certificate in favour of private arrangements with the borrower (para 110.2, 110.4).
Retrospectivity/retroactivity: The amended Section 13(8) applies to enforcement steps taken after 01.09.2016, even if the loan was sanctioned earlier. SARFAESI is a remedial statute with procedural facets; Section 35 overrides general law (TPA s. 60), and Section 37 is harmonised narrowly (paras 179–193).
Directions and observations: Any third-party interest created pendente lite to defeat the auction is non est; Registry to circulate judgment to all High Courts and the Ministries of Finance and Law. The Court urges legislative clarification to remove drafting anomalies (paras 194–203).

Factual Background

Borrowers availed cash credit facilities (Rs. 5 crore) and term loan (Rs. 30 lakh) on 06.01.2016, secured by equitable mortgage over several immovable properties including a 1.92-acre parcel at Dharapuram, Tiruppur.
Account classified as NPA on 31.12.2019; Section 13(2) notice issued on 12.02.2020; possession notice under Section 13(4) on 28.10.2020; possession publication on 31.10.2020.
Auction sale notice dated 22.01.2021 published on 24.01.2021; auction held on 26.02.2021; appellants declared successful bidders at Rs. 1,25,60,000; full price paid by 20.03.2021; sale certificate issued on 22.03.2021.
Borrowers, after sale confirmation, made substantial payments (Rs. 2.88 crore in March 2021 and Rs. 62.74 lakh on 07.05.2021); the bank closed the loan account on 07.05.2021, having appropriated auction proceeds.
DRT dismissed the borrowers’ securitisation applications on 19.01.2023. Borrowers bypassed appeal to DRAT and filed a writ; Madras High Court allowed redemption, quashed sale certificate, ordered refund with 9% interest to be borne by borrowers.
Supreme Court allowed the auction purchasers’ appeals and restored the sale.

Analysis

Precedents Cited and Their Influence

Mardia Chemicals Ltd. v. Union Of India (2004) 4 SCC 311: Traces SARFAESI’s purpose—to cure delays in recovery through non-judicial enforcement; underscores need for fair but expeditious procedures (paras 43, 53).
United Bank of India v. Satyawati Tondon (2010) 8 SCC 110: Emphasises alternate remedies and expeditious recovery mechanisms; restrains writ intervention (para 44).
Madras Petrochem Ltd. v. BIFR (2016) 4 SCC 1: Explains Sections 35 (overriding clause) and 37 (in addition to) and harmonises special laws on recovery; Section 37’s “any other law” is contextually confined (paras 51–52).
Narandas Karsondas v. S.A. Kamtam (1977) 3 SCC 247 and L.K. Trust v. EDC Ltd. (2011) 6 SCC 780: Under TPA s. 60, right of redemption survives until completion of sale by a registered instrument—applied to the pre-amendment Section 13(8) in Mathew Varghese.
Mathew Varghese v. Amritha Kumar (2014) 5 SCC 610: Key pre-amendment decision; extended TPA s. 60 principles to SARFAESI; mandated robust notice protections and lenience in minor differences (paras 59–61, 78).
Dwarika Prasad v. State of U.P. (2018) 5 SCC 491 and Allokam Peddabbayya v. Allahabad Bank (2017) 8 SCC 272: Echoed the pre-amendment position (redemption until sale certificate registration).
Shakeena v. Bank of India (2021) 12 SCC 761: Acknowledges post-2016 “more stringent” regime; redemption must occur before publication of auction notice (para 90).
S. Karthik v. N. Subhash Chand Jain (2022) 10 SCC 641: Reiterates that pre-amendment redemption lasts till registered conveyance; cites Shakeena; read together to demarcate the two regimes (para 91).
CELIR LLP v. BAFNA MOTORS (MUMBAI) PVT. LTD. (2024) 2 SCC 1: Cornerstone precedent post-amendment—right extinguishes on date of publication of auction notice; sale confirmation vests a right in the auction purchaser; writ courts should not reopen SARFAESI auctions on equitable considerations (paras 62–100; summary at para 110).
High Court rulings reconciled:
- Approved: Sri Sai Annadhatha Polymers (AP HC, 2018); K.V.V. Prasad Rao Gupta (TS HC, 2021)—extinguishment on publication under amended s. 13(8) (para 110.7).
- Overruled/Not good law: Concern Readymix (TS HC), Pal Alloys (P&H HC), Amme Srisailam (AP HC)—to the extent they extended redemption beyond publication (para 110.6 and discussion at 88–93).
Canara Bank v. M. Amarender Reddy (2017) 4 SCC 735: Affirms that Rule 8(6) and Rule 9(1) can operate simultaneously; no artificial separate 30+30 day twin-notice requirement (paras 135, 165–168).
M.D. Frozen Foods Exports Pvt. Ltd. v. Hero Fincorp Ltd. (2017): SARFAESI is remedial; applies to “alive claims”; supports applying amended procedure to enforcement after amendment (paras 184–188).
Authorized Officer, Central Bank of India v. Shanmugavelu (2024 INSC 80): Where special legislation expressly departs from general law/contractual terms, the special statute governs (para 193).

Legal Reasoning

1) From broad redemption to a curtailed window post-2016

The Court traces the doctrinal shift. Pre-amendment, Section 13(8) paralleled TPA s. 60: redemption survived until sale by a registered instrument. The 2016 amendment changed the benchmark from “before the date fixed for sale/transfer” to “before the date of publication of notice” for sale by auction/tender/quotations/private treaty. That change is a clear legislative departure from the general law. Applying Section 35 (overriding effect) and the limited scope of Section 37, the Court holds that the special SARFAESI regime must prevail (paras 94–100).

2) Single composite notice of sale under the Rules

The Court dismantles the “two-notice” myth. Rule 8(6) requires a 30-day notice of sale to the borrower; its proviso mandates newspaper publication (Appendix IV-A) where the sale is by auction/tender; Rule 8(7) requires affixation on the property and website upload; Rule 9(1) imposes a 30-day bar before the sale “in the first instance.” These provisions together contemplate one composite notice of sale that is served/published/affixed/uploaded as the mode demands. Appendix IV-A (auction/tender notice) itself is addressed “to the public in general and in particular to the borrower(s) and guarantor(s),” confirming the single-notice design. There is no statutory requirement of issuing two distinct notices with two separate 30-day periods (paras 137–157).

3) No mandatory gap between service and publication

Rejecting the insistence on a 30-day buffer between borrower service and newspaper publication, the Court accepts simultaneous service and publication, provided there is a 30-day gap to the sale date. The 30-day marker protects sale integrity (market exposure) rather than post-publication redemption (paras 165–169).

4) Meaning of “publication” in Section 13(8) across all sale modes

Because only auction/tender require newspaper publication, a literalist reading would create anomalies for quotations/private treaty. The Court therefore reads “publication” as “valid publication of the composite notice of sale” in the form required for the chosen mode. Practically:

Auction/tender: Valid publication occurs when the Appendix IV-A notice is published (and service/affixation/uploading are completed). The 30-day embargo to the sale then runs under Rule 9(1).
Quotations/private treaty: Valid publication occurs when the creditor completes the required service on the borrower and affixation/uploading steps (no newspaper ad). The 30-day embargo then runs.

The Court ties the Rule 9(1) embargo to the later of the required steps (service/affixation/newspaper publication) and then pegs extinguishment of redemption to the date of such valid publication—harmonising Section 13(8) with the Rules and ensuring a uniform trigger across sale modes (paras 170–178).

5) Consequences for the auction purchaser and writ jurisdiction

Once sale is confirmed under Rule 9(2), a vested right to the sale certificate accrues and must be honoured; the bank cannot unwind the sale in favour of a private settlement with the borrower. Equitable considerations cannot be used in writ jurisdiction to overreach the auction sequence prescribed by the statute (paras 110.2, 110.4, 110.5).

6) Retroactivity of amended Section 13(8)

The borrowers’ argument that the pre-amendment regime governs because the loan was sanctioned before 01.09.2016 fails. The controlling date is the enforcement step—here, the auction notice (22.01.2021) and auction (26.02.2021)—both post-amendment. Being a remedial and largely procedural provision aimed at expeditious recovery, amended Section 13(8) applies to enforcement of alive claims post-2016. To hold otherwise would create incoherence within SARFAESI (paras 179–188).

Impact and Forward-Looking Consequences

Doctrinal clarity: This judgment stitches together Bafna Motors’ bright-line rule with a mode-neutral definition of “publication” and the single-notice architecture. It ends a cycle of conflicting High Court decisions.
Operational certainty for lenders: Banks can design enforcement calendars with a single composite sale notice, simultaneous service/publication, and a 30-day embargo to sale. The extinction point of redemption is now a knowable event—valid publication of the composite notice.
Auction integrity and bidder confidence: The Court reinforces sanctity of concluded sales and sale confirmation. Post-confirmation, banks must issue sale certificates; borrowers cannot claw back auctions by late tenders.
Narrower redemption horizon for borrowers: The redemption window now closes upon valid publication; post-publication tenders can be refused. Borrowers must be vigilant once pre-sale steps commence.
Reduced writ interference: High Courts are reminded to defer to the SARFAESI adjudicatory framework (DRT/DRAT) absent exceptional grounds.
Legislative nudge: Notably, the Court urges the Ministry of Finance to rectify drafting inconsistencies in Section 13(8) vis-à-vis the Rules to avoid future litigation—a rare express invitation for statutory fine-tuning (paras 199–201).

Complex Concepts Simplified

Right of redemption (TPA s. 60): A mortgagor’s right to reclaim the mortgaged property by paying what is due. Under pre-2016 SARFAESI, this survived until completion of sale by registered instrument; post-2016, it ends earlier—at publication of the sale notice, as clarified here.
“Publication” in Section 13(8), post-2016: Not merely a newspaper advertisement. It is the valid publication of the single composite sale notice, effected in the form the Rules prescribe for the chosen sale mode. For auctions/tenders: newspaper notice plus service etc.; for quotations/private treaty: service/affixation/uploading (no newspaper ad). The 30-day embargo to the sale date then runs from the later of those steps.
Single composite sale notice: One notice of sale that is (as applicable) served on the borrower, published in newspapers (auction/tender), affixed on the property, and uploaded on the creditor’s website. It is not two distinct 30-day notices.
Rule 9(1) 30-day embargo: No sale in the first instance can occur before 30 days from the later of service/affixation/publication (as applicable). This protects market exposure and price discovery; it is not a 30-day post-publication redemption window.
NPA and SARFAESI: A Non-Performing Asset is a defaulted account. SARFAESI allows secured creditors to enforce security without court intervention, subject to statutory safeguards reviewed by the DRT/DRAT.

Practical Compliance Blueprint

Possession and valuation: Take possession under Rule 8(1)-(4), obtain valuation, fix reserve price (Rule 8(5)).
Prepare the single composite sale notice:
- Serve a 30-day notice of sale on the borrower (Rule 8(6)).
- If sale is by auction/tender, publish the same composite notice in two newspapers per Appendix IV-A and the proviso to Rule 8(6).
- Affix the notice on the property and upload it on the creditor’s website (Rule 8(7)).
Compute the embargo: Schedule the sale no earlier than 30 days from the later of service on the borrower, newspaper publication (if applicable), and affixation/uploading (Rule 9(1)).
Extinguishment of redemption: The borrower’s right to redeem terminates upon valid publication of the composite notice of sale (as above). Post-publication tenders need not be accepted.
Sale confirmation and sale certificate: Confirm sale in favour of highest bidder (subject to reserve price) and issue sale certificate promptly (Rule 9(2), 9(6)). Post-confirmation, a vested right arises in the auction purchaser.
Subsequent sale attempts: If the first sale fails, 15-day notice suffices for subsequent attempts (proviso to Rule 9(1)).
Dispute forum: Borrowers must pursue challenges under Section 17 SARFAESI before the DRT; writs are exceptional.

Case Disposition

Appeals allowed; High Court’s order quashing the sale certificate and directing redemption set aside.
Auction sale restored; Sale certificate stands.
Cautionary note: Any third-party rights created to obstruct delivery of possession to the auction purchaser are non est; strict action warned (paras 194–195).
Circulation: Registry to send judgment to all High Courts and to the Principal Secretaries, Ministries of Finance and Law & Justice (para 203).

Conclusion

This judgment is now the lodestar for Section 13(8) SARFAESI. It confirms a “single composite notice” architecture, rejects the notion of twin 30-day notices, and articulates a mode-neutral construction of “publication” that both (i) preserves the statutory 30-day market-exposure embargo to sale, and (ii) sets a clear, early cut-off for the borrower’s right of redemption—on valid publication of the composite sale notice. The Court harmonises the amended provision with the Rules, upholds auction sanctity, curtails late-stage equity-based disruptions, and consolidates appellate discipline by channelling grievances to the DRT/DRAT. Its retroactivity holding aligns with SARFAESI’s remedial character and Section 35’s overriding clause, ensuring uniformity across enforcement proceedings initiated post-2016. At the same time, the Bench candidly calls for legislative refinements to eliminate residual drafting anomalies. The decision will materially stabilise auction processes, enhance bidder confidence, and reduce litigation churn, while signalling to borrowers that redemption, though protected, is now subject to a precise and narrower statutory window.