Telangana High Court Rules Secured Creditor Suppressed Facts; Rule 9 Of The Security Interest (Enforcement) Rules, 2002 Does Not Protect Sale

The Telangana High Court held that a secured creditor’s e-auction sale cannot be protected under Rule 9 of the Security Interest (Enforcement) Rules, 2002 if material facts are suppressed. The creditor failed to disclose pending litigation and a stay order before conducting the sale. The Court ruled that concealment vitiates the sale and ordered refund to the purchaser. It reaffirmed that good faith and full disclosure are essential to valid enforcement under SARFAESI procedures.