Excelsior Correspondent
JAMMU, Mar 23: The High Court of Jammu & Kashmir and Ladakh has dismissed a writ petition filed by Abdul Rouf Bhat and others challenging the auction sale of their mortgaged property by J&K Bank, holding that a borrower’s right of redemption stands extinguished once the auction notice is published under the SARFAESI Act.
A Division Bench comprising Justice Sindhu Sharma and Justice Shahzad Azeem passed the judgment in WP(C) No. 1866/2024, upholding the bank’s action taken under the SARFAESI Act and the Security Interest (Enforcement) Rules, 2002. The petitioners had questioned the auction sale notice issued in April 2024 and the sale certificate issued in June 2024 in favour of the auction purchaser.
As per the case record, the petitioners had availed a loan of Rs 20 lakh from J&K Bank in 2013 by mortgaging immovable property. After the account turned irregular and was classified as a Non-Performing Asset in March 2017, the bank initiated proceedings under the SARFAESI Act, issued demand and possession notices, and eventually proceeded with auction of the secured asset. The third tender-cum-sale notice published in April 2024 fetched a bid of Rs 75 lakh from respondent Masarat Tabasum, in whose favour the sale was later confirmed.
The petitioners argued that the bank had violated the prescribed procedure and that notices had neither been served upon them nor properly published. However, the High Court found this claim to be incorrect, observing that the bank had placed on record material showing that all statutory notices were duly published in English and Urdu newspapers and were also sent to the petitioners’ addresses, with postal receipts preserved.
Referring to the Supreme Court judgment, the Bench reiterated that under Section 13(8) of the SARFAESI Act, a borrower can redeem the secured asset only before publication of the auction notice. Once such notice is published, the secured creditor is not bound to accept the dues and may proceed with the transfer of the asset.
The High Court said that in the present case, not only had the auction notice already been published, but the sale certificate had also been issued and possession of the property had been handed over to the auction purchaser. In these circumstances, the petitioners’ right of redemption had already come to an end.
The Bench also took serious note of the fact that the petitioners had filed a civil suit concerning the same property and had even obtained an interim order, but failed to disclose this fact in the writ petition. Holding that the writ jurisdiction under Article 226 is extraordinary, equitable and discretionary, the court observed that litigants approaching the High Court must come with clean hands and cannot suppress material facts or indulge in re-litigation.
Concluding that the petition was “marred by concealment and distortion of facts” and amounted to abuse of the process of court, the High Court dismissed the writ petition along with connected applications.
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