The Delhi High Court has held that a sale under the SARFAESI Act attains finality once the auction purchaser deposits the entire sale consideration within the statutory period prescribed under Rule 9(4) of the Security Interest (Enforcement) Rules, 2002, and the mere pendency of registration of the Sale Certificate before the Debts Recovery Tribunal does not render the sale incomplete or revive the borrower's right of redemption. The Division Bench dismissed an intra-court appeal challenging the dismissal of a writ petition where the borrower had tendered a dishonoured cheque pursuant to a one-time settlement recorded by the court.
Case Details
MS PATIL CONSTRUCTIONS AND INFRASTRUCTURE LIMITED vs IFCI VENTURE CAPITAL FUNDS LTD.
2026:DHC:7469-DB
Court
Delhi High Court
Date
2026-09-03
Case Number
LPA-604/2026
Bench
HON'BLE MR. JUSTICE TEJAS KARIA
Counsel
Pet: Jayant Mehta, Sr. Adv., Sidhika Nagrath, Jaivardhan Jeph, Kishore Bhandari
Res: Nitin Dahiya, Muzammil Ahmed, Samar Bansal, Sr. Adv., Pushkar K. Sinha, Rajat Mahi, Anshuka Saxsena, Vedant Kapur
Frequently Asked Questions
A SARFAESI sale attains finality when the auction purchaser deposits the entire sale consideration within the period stipulated under Rule 9(4) of the Rules. The subsequent registration of the Sale Certificate is a ministerial act and does not detract from the completion of the sale or the rights accrued in favour of the auction purchaser.
No. The mere pendency of registration of the Sale Certificate does not, by itself, render the sale incomplete, nor can it be treated as equivalent to non-completion of the sale. The borrower's right of redemption does not survive once the full consideration has been deposited within the statutory timeframe.
Once the auction purchaser has deposited the entire sale consideration and a Sale Certificate has been issued, the borrower cannot seek to undo the completed sale through a writ petition to give effect to a subsequent OTS proposal. Any challenge to the validity of the sale must be adjudicated in proceedings under Section 17 of the SARFAESI Act before the DRT.
The dishonour of a cheque tendered pursuant to a court-recorded OTS constitutes contumacious conduct that disentitles the borrower from equitable relief. The court may dismiss the writ petition on this ground alone, as the borrower has misled the court by tendering a cheque not good for encashment.
