Legal Review and Analysis of M Rajendran & Ors vs Ms KPK Oils and Proteins India Pvt Ltd & Ors 2025 INSC 1137

1. Name and Citation of the Judgment

M. Rajendran & Ors. vs. M/s KPK Oils and Proteins India Pvt. Ltd. & Ors.
Civil Appeal Nos. 12174-12175 of 2025 (Arising out of SLP (C) Nos. 11068 of 2023 and 14696 of 2023)
Supreme Court of India
Decided on: September 22, 2025
Coram: Justice J.B. Pardiwala and Justice R. Mahadevan
Citation: 2025 INSC 1137

2. Relevant Laws and Sections

This judgment primarily interprets and deals with the following statutory framework:

• The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act):
  Section 13(8): The core provision under dispute, dealing with the borrower's right of redemption.
  Section 35: The overriding clause, stating that the SARFAESI Act prevails over any inconsistent laws.
  Section 37: Clarifies that the SARFAESI Act is in addition to, and not in derogation of, other laws.

• The Security Interest (Enforcement) Rules, 2002 (SARFAESI Rules):
  Rule 8: Pertains to the sale of immovable secured assets, including the modes of sale and the requirement of a notice.
  Rule 9: Deals with the time of sale, confirmation, and issuance of the sale certificate.

• The Transfer of Property Act, 1882:
  Section 60: Provides the general law on the mortgagor's right to redeem the property.

3. Basic Details of the Case

• Appellants (Before Supreme Court): M. Rajendran & Ors. (Auction Purchasers).

• Respondents: M/s KPK Oils and Proteins India Pvt. Ltd. & Ors. (Original Borrowers) and the Bank.

• Origin of Case: Appeal against the judgment of the High Court of Judicature at Madras.

• Subject Property: Vacant land mortgaged by the borrowers to secure a loan.

• Timeline:
  06.01.2016: Loan availed by borrowers.
  31.12.2019: Loan account classified as Non-Performing Asset (NPA).
  22.01.2021: Bank published the Auction Sale Notice.
  26.02.2021: Appellants (Auction Purchasers) became the successful bidders.
  22.03.2021: Bank issued the Sale Certificate in favour of the appellants.
  24.04.2023: Madras High Court allowed the borrowers' writ petition, quashed the Sale Certificate, and permitted the borrowers to redeem the mortgage by paying the dues, even after the auction was completed and the sale certificate was issued.
  The Auction Purchasers then appealed to the Supreme Court.

4. Core Principle of the Judgment: The Finality of Auction Sales and the Curtained Right of Redemption

The central issue before the Supreme Court was to definitively interpret the point in time at which a borrower's right to redeem the mortgaged property (by repaying the entire debt) becomes extinguished under the amended Section 13(8) of the SARFAESI Act.

The Legal Conflict and the Supreme Court's Analysis

The judgment provides an in-depth analysis to resolve the confusion that persisted even after its earlier decision in Celir LLP v. Bafna Motors (Mumbai) Private Ltd. (2024).

A. The Amendment to Section 13(8) of the SARFAESI Act: A Legislative Shift

The Court began by highlighting the crucial amendment made to Section 13(8) effective September 1, 2016.

• Pre-Amendment Law (as per Mathew Varghese v. Amritha Kumar): The borrower's right to redeem lasted until the secured asset was actually transferred, i.e., until the execution and registration of a sale deed in favour of the auction purchaser. This was based on the principle enshrined in Section 60 of the Transfer of Property Act, 1882.

• Post-Amendment Law: The amended Section 13(8) states that the right to tender the dues exists "at any time before the date of publication of notice for public auction or inviting quotations or tender from public or private treaty...". This amendment significantly curtailed the right of redemption.

B. Resolving the Ambiguity: What is the "Date of Publication"?

The core task for the Court was to interpret the phrase "date of publication of notice". Conflicting views from various High Courts had created confusion:

• One view was that "publication" meant only the publication of an auction notice in newspapers, implying that for other modes of sale (like private treaty), the right of redemption would last longer.

• Another view was that two separate notices were required with a gap, further complicating the process.

The Supreme Court rejected these interpretations and provided a harmonious construction:

• Single Composite Notice: The Court held that the SARFAESI Rules (Rules 8 and 9) envisage only a single, composite "Notice of Sale". Whether this notice is served to the borrower, published in newspapers, affixed on the property, or uploaded on a website, these are merely different modes of effecting the same notice, not different notices.

• "Publication" is an Umbrella Term: The word "publication" in Section 13(8) is an umbrella term. It refers to the date when the secured creditor validly issues this single composite "Notice of Sale" in the manner prescribed for the chosen mode of sale (auction, tender, etc.).

• Extinguishment of Right: The borrower's right of redemption stands extinguished upon this "date of publication"—the date when the Notice of Sale is effectively issued as per the rules. The sale must then wait for 30 days from this date as per Rule 9(1), but the borrower cannot redeem the property during this period.

C. Overriding Effect of SARFAESI Act

The Court reaffirmed that the SARFAESI Act is a special law designed for expeditious recovery of debts. Section 35 gives it an overriding effect over other laws, including the general right of redemption under the Transfer of Property Act. Therefore, the amended, more stringent timeline in Section 13(8) of the SARFAESI Act prevails.

D. Retrospective Application

The Court rejected the borrowers' argument that the pre-amendment law should apply because the loan was sanctioned before September 1, 2016. It held that the amended Section 13(8) is procedural and remedial in nature. It applies to all actions taken after its commencement, such as the publication of the auction notice in this case (January 2021). Applying the old law would defeat the very purpose of the amendment.

5. Final Outcome and Supreme Court's Directions

The Supreme Court allowed the appeals filed by the auction purchasers and set aside the order of the Madras High Court.

• The Supreme Court held that the High Court erred in entertaining the writ petition and in applying equitable considerations to overreach the statutory process.

• The right of redemption of the borrowers in this case stood extinguished on January 22, 2021, the date of publication of the Auction Notice.

• The subsequent tender of dues by the borrowers in 2023 was invalid and too late.

• The Sale Certificate dated March 22, 2021, issued in favour of the appellants (auction purchasers) was upheld.

• The Bank was directed to hand over possession of the secured asset to the auction purchasers.

• The Court issued a stern warning that any third-party rights created over the property after the auction would be considered non-est (void).

Critical Observation: The Court concluded by expressing concern over the "ill-wording" of Section 13(8) and the resulting litigation. It humbly urged the Ministry of Finance to bring necessary legislative changes to clarify the provision and prevent future disputes.

6. MCQs Based on the Judgment

Question. 1 According to the Supreme Court's judgment in M. Rajendran vs. M/s KPK Oils, what is the definitive point at which a borrower's right of redemption under Section 13(8) of the SARFAESI Act is extinguished?

a) Upon the registration of the sale certificate.
b) Upon the fall of the hammer in the auction.
c) Upon the date of publication of the notice for sale, as per the SARFAESI Rules.
d) Upon the secured creditor taking possession of the secured asset.

Question. 2 The Supreme Court held that the various requirements for serving, publishing, and affixing the sale notice under Rules 8 and 9 of the SARFAESI Rules should be understood as?

a) Mandatory independent legal steps, each requiring a 30-day gap.
b) Separate notices for the borrower and the general public.
c) Different modes of effecting a single composite "Notice of Sale".
d) Optional procedures at the discretion of the secured creditor.