Amar Kumar v. The State Of Bihar

IN THE HIGH COURT OF JUDICATURE AT PATNA

Civil Writ Jurisdiction Case No.3885 of 2024 ====================================================== Amar Kumar ... ... Petitioner/s

Versus

The State of Bihar ... ... Respondent/s ====================================================== Appearance :

For the Petitioner/s :

Mr. Avinava Kumar, Adv.

For the Respondent/s :

Mr. Standing Counsel 21 For the State :

Smt. Anuradha Singh, SC21 Mr. Shatabdi Sinha, AC to SC21 For the Bank :

Mr. Ranjeet Kumar Pandey, Adv.

====================================================== CORAM: HONOURABLE MR. JUSTICE A. ABHISHEK REDDY ORAL ORDER 24-07-2025 In the counter affidavit filed by the respondents Bank, it is stated that the auction of the subject property was already completed and the sale certificate was issued to the successful bidder (Respondent No. 11) on 03.01.2024 and physical possession of the secured assets was also handed over to the auction purchaser on 10.01.2024.

2. The Hon'ble Supreme Court passed in Celir LLP v. Bafna Motors(Mumbai) (P) Ltd. (2024) 2 SCC 1 has held as under;

"105. We summarise our final conclusion as under:

(i) The High Court was not justified in exercising its writ jurisdiction under Article 226 of the Constitution more particularly when the borrowers had already availed the alternative remedy available to them under Section 17 of the SARFAESI Act.

(ii) The confirmation of sale by the Bank under Rule 9(2) of the Rules of 2002

2/4 invests the successful auction purchaser with a vested right to obtain a certificate of sale of the immovable property in form given in appendix (V) to the Rules i.e., in accordance with Rule 9(6) of the SARFAESI.

(iii) In accordance with the unamended Section 13(8) of the SARFAESI Act, the right of the borrower to redeem the secured asset was available till the sale or transfer of such secured asset. In other words, the borrower's right of redemption did not stand terminated on the date of the auction sale of the secured asset itself and remained alive till the transfer was completed in favour of the auction purchaser, by registration of the sale certificate and delivery of possession of the secured asset. However, the amended provisions of Section 13(8) of the SARFAESI Act, make it clear that the right of the borrower to redeem the secured asset stands extinguished thereunder on the very date of publication of the notice for public auction under Rule 9(1) of the Rules of 2002.

In effect, the right of redemption available to the borrower under the present statutory regime is drastically curtailed and would be available only till the date of publication of the notice under Rule 9(1) of the Rules of 2002 and not till the completion of the sale or transfer of the secured asset in favour of the auction purchaser. (iv) The Bank after having confirmed the sale under Rule 9(2) of the Rules of 2002 could not have withhold the sale certificate under Rule 9(6) of the Rules of 2002 and enter into a private arrangement with a borrower.

(v) The High Court under Article 226 of the Constitution could not have applied equitable considerations to overreach the outcome contemplated by the statutory auction process prescribed under the SARFAESI Act.

(vi) The two decisions of the Telangana High Court in the case of Concern Readymix (supra) and Amme Srisailam (supra)

3/4 do not lay down the correct position of law. In the same way, the decision of the Punjab and Haryana High Court in the case of Pal Alloys (supra) also does not lay down the correction position of law.

(vii) The decision of the Andhra Pradesh High Court in Sri Sai Annadhatha Polymers (supra) and the decision of the Telangana High Court in the case of K.V.V. Prasad Rao Gupta (supra) lay down the correct position of law while interpreting the amended Section 13(8) of the SARFAESI Act.

3. Having regard to the same, the present writ petition is disposed of granting liberty to the petitioner to approach the Debts Recovery Tribunal, Patna. It is made clear that this Court has not gone into the merits or demerits of the case and leaving all issues open to be agitated by the petitioner. If any application is filed by the petitioner, the same shall be considered on its own merits by the Debts Recovery Tribunal, Patna. The question of limitation shall also be condoned duly taking into the account the time spent by the petitioner in agitating his rights before this Court.

4. With the above directions, the present writ petition stands disposed of.

(A. Abhishek Reddy , J) Gauravkr/- U

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