On September 23, 2025, the Supreme Court upheld the rights of the auction purchasers under the SARFAESI Act, holding that the borrowers’s right of redemption ends with publication of auction notice. This decision overturned the Madras High Court’s ruling quashing the auction sale certificate in the case of M. Rajendran vs M/S Kpk Oils And Proteins India Pvt. Ltd.

A Bench of Justices J.B. Pardiwala and R. Mahadevan dealt with the issue of borrowers’ right of redemption under Section 13(8) of the SARFAESI Act, 2002, in light of the 2016 amendment. The Court clarified that the borrower’s right to redeem the secured asset is extinguished upon the publication of the auction notice, and any payments made thereafter cannot revive this right.

First, the Court had to decide whether the notices issued under SARFAESI Rules 8(6), 8(7), and 9(1) were part of a single composite “notice of sale” or separate notices. Second, the question of whether Section 13(8)’s phrase “before the date of publication” refer to the composite notice of sale, in which case the borrower’s right of redemption would be terminated once the notice is duly published also lies before the Court. Third, if the revised Section 13(8), which went into effect on September 1, 2016, applied retroactively to loans taken out before then but for which enforcement action was later commenced.

The Court determined that the 30-day timeframe under Rule 9(1) is calculated from the date of such publication and that all notifications issued under the SARFAESI Rules constitute a single composite “notice of sale.” It decided that the revised Section 13(8), which is procedural and remedial in nature, applies retroactively to claims that already exist. This means that when the auction notice was published on January 22, 2021, the borrower’s right of redemption was terminated.

The Supreme Court observed that attempts by borrowers to create third-party rights over the secured property after auction would be void. While allowing the appeals, the Court urged the Ministry of Finance to revisit Section 13(8) and related Rules to resolve ambiguities that continue to generate avoidable litigation.