If the bank has already initiated the proceedings under Section 13 of the SARFAESI Act and even the possession of the mortgaged property was taken over by the bank under Section 14 of the SARFAESI Act and thereafter the mortgaged property is put to sale by a public auction, the borrower is entitled to stall the auction proceedings and restrain the secured creditor/bank from selling the property only if the borrower deposits the entire dues with the secured creditor.
The Supreme Court in Bank of Baroda VERSUS M/s Karwa Trading Company & Anr CIVIL APPEAL NO.363 OF 2022 held that the DRT was not justified in directing to release the mortgaged property and handover the possession along with the original title deeds to the borrower on payment of only the base price/ reserve price. Unless and until the borrower was ready to deposit/pay the entire amount payable together with all costs and expenses with the secured creditor, the borrower cannot be discharged from the entire liability outstanding. Therefore, no order could have been passed either by the DRT and/or by the High Court to discharge the borrower from the entire liability outstanding and to discharge the mortgaged property and handover the possession along with original title deeds to the borrower.
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This article is a mere general guide to the subject matter. It is not professional advice. Please consult a professional for advice on the specific circumstances of your case.