In a landmark ruling, the Supreme Court has underscored the rights of tenants who emerge as successful bidders in property auctions conducted under the SARFAESI Act. The judgment, delivered by Justices Vikram Nath and Satish Chandra Sharma, reverberates with implications for the delicate interplay between banking institutions and property rights.
Central to the case was the aftermath of an auction sale set aside by the court. The Debts Recovery Tribunal (DRT) had previously directed the return of auction sale proceeds to the successful bidder, provided physical possession of the property was handed over to the bank. However, the Supreme Court deemed this direction untenable.
In a cogent judicial analysis, Justice Vikram Nath elucidated that upon the annulment of the sale, the appellants’ status shifted back to that of tenants. Consequently, the bank could not lay claim to physical possession, nor could the appellants be compelled to surrender it.
The genesis of the dispute lay in procedural lapses by the bank. Notably, the auction proceedings were initiated without the mandated 30-day prior notice to the borrower—a violation of statutory provisions. Despite the borrower’s subsequent repayment of the debt, the sale certificate issued to the appellant tenant was contested before the DRT.
The court, scrutinizing each facet of the case, rebuffed the DRT’s directive to refund auction proceeds contingent upon possession transfer. Instead, it mandated the bank to refund the entire sale amount, coupled with compound interest, to the appellants.
In a resounding affirmation of procedural integrity, the court emphasized the indispensability of adherence to statutory notices. Failure on the bank’s part to furnish the requisite 30-day notice before auction sale proceedings precipitated the legal imbroglio.
The legal luminaries arrayed in this judicial saga underscore the complexity and stakes involved. Counsels on both sides marshaled legal arguments with precision, reflecting the gravity of the issues at hand.
In the case of Govind Kumar Sharma & Anr. versus Bank of Baroda & Ors., the Supreme Court’s verdict resounds as a clarion call for meticulous adherence to legal procedures, safeguarding the rights of tenants embroiled in SARFAESI property disputes.
Loading...
Reload document 
Open in new tab 
