SARFAESI: Supreme Court Explains Publication of Notice Which Extinguishes Borrower’s Redemption Right Under Section 13(8)

The Supreme Court has clarified that under the amended Section 13(8) of the SARFAESI Act, a borrower’s right of redemption of a mortgaged property is extinguished the moment a valid notice of auction (notice of sale) is published. This publication can include service of notice to the borrower, affixation/uploading, and newspaper/public notifications, depending on the mode of sale required by law. The Court held that to preserve the sanctity and certainty of auction proceedings, the right of redemption must be exercised before the date fixed for public auction notice publication; failure to tender full dues before that point means the borrower loses that right. The Court flagged inconsistencies between the statute and the rules (especially Rules 8 & 9 of SARFAESI Rules, 2002) about what constitutes “publication,” and directed government to consider amendments to remove drafting ambiguities. The decision stressed that after publication, auction process must have certainty, and once that stage is reached, banks must issue sale certificates to successful bidders and cannot keep redemption rights hanging