IN THE HIGH COURT OF MADHYA PRADESH

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AT JABALPUR

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BEFORE

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HON'BLE SHRI JUSTICE VIVEK RUSIA

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&

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HON'BLE SHRI JUSTICE PRADEEP MITTAL

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ON THE 12

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th

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OF FEBRUARY, 2026

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WRIT PETITION No. 19856 of 2015

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SMT. KAMLA DEVI AND OTHERS

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Versus

BANK OF INDIA AND OTHERS

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Appearance:

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Shri Ramesh Kumar Verma, Senior Advocate with Shri Ram Murti

Tiwari and

Shri Munish Saini, Advocate for petitioners.

Shri Rajesh Maindiretta, Advocate for respondent No. 1.

Shri Avinash Gupta, Advocate for respondent No. 2.

WITH

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WRIT PETITION No. 5555 of 2017

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SMT. SUNITA SINGH AND OTHERS

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Versus

BANK OF INDIA AND OTHERS

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Appearance:

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Shri Avinash Gupta, Advocate for petitioners.

Shri Rajesh Maindiretta, Advocate for respondent/Bank.

Shri Ramesh Kumar Verma, Senior Advocate with Shri Ram Murti

Tiwari & Shri Munish Saini, Advocate for respondent Nos. 2 and

3.

ORDER

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Per

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: Justice Pradeep Mittal

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Since both these writ petition involve a common issue, they

are heard and decided together by this common order. References to

the annexures and documents are taken from W.P. No. 19856 of 2015

for the sake of convenience.

2. The case, in brief, in W.P. No. 5555 of 2017 is that Late V.P.

Singh, the husband of Petitioner No. 1 and father of Petitioner Nos. 2

to 4, is deceased. He, along with Petitioner No. 1, had constituted a

partnership firm in the name and style of M/s R&R Oil Mills. The

firm was the borrower. The firm availed an overdraft facility from the

respondent Bank and mortgaged the following properties: (i) land

measuring 7,200 sq. ft. situated at Khasra No. 77/1, Gwarighat,

Narmada Road, Jabalpur (M.P.); and (ii) two plots, each measuring

2,400 sq. ft., situated at Khasra No. 77/17, Gwarighat Ward, Jabalpur

(M.P.) (hereinafter referred to as the “mortgaged properties”). M/s

R&R Oil Mills failed to repay the outstanding dues. Consequently,

the respondent Bank initiated recovery proceedings under Section

13(4) of the SARFAESI Act, 2002. A sale notice was published in

the newspaper dated 23.01.2010 by the Bank, and the auction was

scheduled for 10.02.2010. However, the Bank failed to auction the

mortgaged properties on the said date. Thereafter, it is alleged that the

Bank entered into a private treaty with a third party under the guise of

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an auction, without informing the petitioners or obtaining their

written consent. Subsequent to the scheduled auction date, the

petitioners secured the release of one of the mortgaged properties

measuring 6,000 sq. ft. by paying Rs. 24 lakhs towards the

outstanding dues of M/s R&R Oil Mills. The petitioners claim that

they became aware of the alleged private treaty only when

Respondent No. 2, Sunita Singh, filed Civil Suit No. 119-A/2013

against the respondent Bank seeking execution of a sale deed in

respect of the mortgaged properties. She claimed that the properties

had been purchased by her late husband, Shri V.P. Singh, who died

on 06.07.2011, and that the Bank had failed to execute the sale deed

in her favour. The petitioners remain in possession of the mortgaged

properties and are regularly paying property taxes and other dues.

One of the mortgaged properties was let out to M/s Hathway Cable &

Datacom Ltd. up to 30.09.2015. The Petitioners submitted a

representation dated 02.11.2015 to the respondent Bank protesting

the alleged private treaty conducted without their consent and

requesting release of the mortgaged properties. Respondent Bank

failed to respond to the said representation and did not release the

mortgaged properties. Petitioner No. 1 also issued Cheque No.

680685 in favour of the Bank for Rs. 28 lakhs and requested the

Bank not to create any third-party interest in the mortgaged

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properties.

3. It is submitted that the petitioners have filed this petition raising

the following grounds. The Bank acted in an arbitrary and illegal

manner, contrary to the provisions of the SARFAESI Act, 2002 and

the Security Interest (Enforcement) Rules, 2002. The Bank’s letter

dated 28.09.2012 addressed to Respondent No. 2 clearly indicates

that no auction was held on 10.02.2010, nor was any fresh publication

issued or notice of extension of the auction date served upon the

petitioners. Therefore, the alleged private treaty and related

proceedings are illegal, null and void, and not binding upon the

petitioners. Entire action of the respondent Bank is contrary to the

provisions of the SARFAESI Act, 2002, the Security Interest

(Enforcement) Rules, 2002, Section 60 of the Transfer of Property

Act, 1882, and Article 300A of the Constitution of India.

4. It is submitted that the private treaty entered into by the

respondent Bank is illegal, arbitrary, and not binding upon the

petitioners. No notice was served upon the petitioners as mandatorily

required under Rule 8(1) of the Security Interest (Enforcement)

Rules, 2002 framed under the SARFAESI Act, 2002. That the

respondent Bank could not have entered into any private treaty

without obtaining the prior written consent of the petitioners. Further,

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under Rule 9(4) of the Security Interest (Enforcement) Rules, 2002,

the Bank has no authority to extend the time for deposit of the

balance sale consideration without the written consent of the

borrower. No such consent was ever given by Petitioner No. 1 (Smt.

Kamla Devi) or by any partner of M/s R & R Oil Mills. That no

auction was conducted on 10.02.2010. The respondent Bank, by

attempting to dispose of the property without following the statutory

procedure, is acting beyond its authority and seeks to deprive the

petitioners of their constitutional right to property under Article 300A

of the Constitution of India. under the SARFAESI Act, 2002 and the

Rules of 2002, issuance of a fresh notice giving 30 clear days is

mandatory before effecting any sale. No such notice was issued to the

petitioners. Therefore, any transaction undertaken behind their back is

illegal, null and void.

5. It is submitted that neither any sale certificate has been issued

nor any sale deed has been registered by the respondent Bank in

favour of Respondent No. 2. Consequently, the petitioners’ statutory

right of redemption under Section 60 of the Transfer of Property Act,

1882 continues to subsist. It is submitted that the law laid down by

the Hon’ble Supreme Court in Narandas Karsondas v. S.A. Kamtam

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(1977) 3 SCC 247 and in Mathew Varghese v. M. Amritha Kumar

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&Ors. (2014) 5 SCC 610

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clearly holds that the mortgagor’s right of

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redemption survives until the sale is completed by execution of a

registered sale deed. In the present case, no such registered deed has

been executed. In W.P. No. 2317/2013, by order dated 25.02.2013,

this Court restrained the Bank from proceeding further with the sale

of the property, holding that the procedure adopted was contrary to

Rule 8 of the Security Interest (Enforcement) Rules, 2002. In view of

the judgment in J. Rajiv Subramanian & Anr. v. M/s Pandiyas &

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Ors., 2012 (1) BJ 832,

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a nationalised bank exceeds its authority if it

enters into a private treaty without the written consent/willingness of

the borrower as required under Rule 8 of the Security Interest

(Enforcement) Rules, 2002. It is submitted that in these

circumstances, this Court has ample jurisdiction to exercise its

powers under Article 226 of the Constitution of India and grant

appropriate relief to the petitioners.

6. The petitioners in W.P. No.5555 of 2017 are aggrieved by a

communication dated 28.9.2012 whereby the Bank has demanded

production of legal heir certificate for processing the issuance of the

sale certification in favour of the petitioners along with release of the

property upon payment of dues and return of original title deeds.

7. Learned counsel for the respondent submits that the allegations

are incorrect and contrary to the record. Petitioner No. 2, as

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proprietor of M/s R.R. Oil Mills, had availed financial assistance

from the respondent Bank but failed to repay the dues. Accordingly,

the Bank initiated proceedings under the SARFAESI Act, 2002 by

issuing a demand notice under Section 13(2) dated 04.03.2009,

followed by a possession notice under Section 13(4). Both notices

were duly published in newspapers. Thereafter, the Bank issued an

auction sale notice. In the auction conducted on 24.02.2010, the

husband of Respondent No. 2 submitted the highest bid of Rs.

28,00,000/-. Despite repeated communications from the Bank, he did

not complete the formalities for registration of the sale certificate.

After his demise, the Bank informed Respondent No. 2 to submit a

legal heir certificate for completion of registration. The said

communication is under challenge in separate proceedings. The

petitioners were fully aware of the auction proceedings and the sale

of the property. Subsequently, Petitioner No. 1 approached the Bank

and deposited Rs. 24,00,000/- towards full and final settlement of the

remaining dues, upon which the unsold properties were released and

the original title deeds were returned. The petitioners acknowledged

receipt of the same. The multiple civil proceedings were initiated by

the parties concerning the mortgaged property, including suits and

appeals filed by both the petitioners and Respondent No. 2. These

proceedings clearly demonstrate that the petitioners were aware that

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the property had been sold in auction to the husband of Respondent

No. 2. The allegation that the property was sold through a private

treaty is false and misleading. The sale was conducted pursuant to

auction proceedings under the SARFAESI Act, 2002. The

contentions raised in the writ petition are baseless, contrary to the

record, and devoid of merit. The respondents pray for dismissal of the

writ petition.

8. The petitioners have filed a rejoinder to the reply stating therein

that the respondent Bank, in its reply, has wrongly asserted that the

petitioners have misstated the facts and that all mandatory procedures

under the SARFAESI Act, 2002 and the Security Interest

(Enforcement) Rules, 2002 were duly followed. The said assertion is

incorrect. The petitioner further submits that present rejoinder is filed

to highlight the serious procedural lapses committed by the Bank,

which go to the root of the matter and render the alleged sale in

favour of Late Shri V.P. Singh invalid. The Bank failed to comply

with the mandatory requirements prescribed under Sections 13(2) and

13(4) of the SARFAESI Act read with the Rules of 2002. No clear 30

days’ sale notice, as required under Rule 8(6), was ever served upon

the petitioners. The auction publication relied upon by the Bank does

not satisfy the statutory requirement of proper publication in

accordance with the Rules. The so-called auction process was, in

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substance, a private treaty conducted under the guise of a public

auction, without prior written consent of the petitioners. The Act and

the Rules do not permit such a procedure without strict compliance

with mandatory safeguards. The valuation of the property was not

obtained from an approved valuer, the reserve price was not properly

fixed in accordance with law, and due publication requirements were

not fulfilled. The petitioners were not supplied relevant documents

despite repeated requests. The sale proceedings were conducted

without proper notice, without compliance with statutory

requirements, and without affording the petitioners a fair opportunity

to redeem the property. Since the mandatory provisions relating to

demand notice, possession, valuation, sale notice, and publication

have not been complied with, the alleged sale is illegal, arbitrary, and

violative of the SARFAESI Act, 2002, the Transfer of Property Act,

1882, and Article 300A of the Constitution of India.

9. Heard the learned counsel for the parties.

10. It is evident from the record that the Bank auctioned the

property for Rs. 28,00,000/-, which had been mortgaged by the

petitioners with the respondent Bank. Thereafter, the petitioners

settled the account on 30.03.2012 and deposited the remaining

amount with the Bank, thereby redeeming the property. These facts

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clearly show that the auction of the disputed property was within the

knowledge of the petitioners from the very beginning, and they

accepted and honoured the amount of Rs. 28,00,000/- deposited by

the auction purchaser.

11. On 30 march 2012 bank issued a certificate that mortgage

property has been released from mortgage, which shown the property

sold in auction proceeding, that document produced by the petitioner

that document has shown, it was in the knowledge to prior that the

property had been sold in auction and petitioner never challenged it

before the DRT.

12. The respondent Bank issued a notice (Annexure R/1) under

Section 13 of the SARFAESI Act, 2002 to the petitioners through

registered post on 04.03.2009, and the notice was also published in

newspapers dated 27.05.2009 and 28.05.2009 (Annexure R-1/2). The

respondent Bank took possession of the secured asset on 25.09.2009.

Thereafter, the Bank conducted the auction on 24.02.2010 and issued

a notice to the auction purchaser for issuance of the sale certificate. It

is stated by the learned counsel for the Bank that the Bank vide

communications dated 9.4.2010 (Annexure R1/1),

13.4.2010(Annexure R1/2), 23.5.2010 (Annexure R1/3) and

2.07.2010 (Annexure R1/4) wrote to late Shri V.P. Singh to get the

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sale certificate registered. However, on acquiring the knowledge

about the demise of late Shri V.P. Singh the Bank wrote to the

petitioner No. 1 to get the sale certificate on production of the legal

heir certificate.

13. The petitioners submitted a letter to the Bank and settled the

loan amount of Rs. 24,00,000/- on 30.03.2012. On the same date, i.e.,

30.03.2012, a certificate was issued for redemption of the property.

These facts clearly demonstrate that the petitioners had knowledge of

the auction proceedings at least by 30.03.2012; however, they never

challenged the auction proceedings before the Debts Recovery

Tribunal (DRT).

14. The contention that one of the mortgaged properties had been

let out to M/s Hathway Cable & Datacom Ltd. up to 30.09.2015 is

not reliable, as the said document was prepared on 28.03.2013, nearly

three years after the auction proceedings had been completed.

15. The petitioners raised several issues regarding non-

compliance with the provisions of the SARFAESI Act, 2002;

however, the respondent denied the same. Therefore, such disputed

questions of fact cannot be adjudicated in the exercise of writ

jurisdiction.

16. The petitioners never challenged the auction proceedings before

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the Debts Recovery Tribunal (DRT) despite having notice thereof.

Consequently, the auction proceedings attained finality and cannot be

challenged after five years by way of a writ petition under Article 226

of the Constitution of India.

17. It is also disputed whether the property was sold through a

public auction or by way of private treaty. A private treaty is

permissible under Rule 8(5) of the Security Interest (Enforcement)

Rules, 2002, but ordinarily only after an attempt to sell the property

through public auction or tender has failed.

18. A sale by private treaty should ideally be conducted with the

written consent of the borrower. However, the conduct of the

petitioners indicates confirmation of the auction, suggesting that a

formal written agreement with the borrower may not be mandatory if

the Bank has acted in good faith.

19. Further, the fact that the borrower had knowledge of the sale

but failed to take any action within the prescribed period of 45 days

constitutes a significant impediment to the petitioner’s challenge. A

sale certificate issued to an auction purchaser upon confirmation of a

sale is mere evidence of title and does not require compulsory

registration under Section 17(1) of the Registration Act, 1908.

In 2024 SCC OnLine SC 3372 State of Punjab and Another Versus

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12 WP-5555-2017NEUTRAL CITATION NO. 2026:MPHC-JBP:12477

Ferrous Alloy Forgings P Ltd. and Others

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the Hon'ble Apex court

has clarified that as long as the certificate remains in its original

form, it is exempt from registration, and filing a copy under Section

89(4) of the Registration Act is sufficient. It means that once the

Bank issues the sale certificate and informs the auction purchaser

about its issuance, the sale certificate is deemed to have been issued

by the Bank. Only the registration of the sale certificate remains

pending, if the auction purchaser desires to have it registered. If the

legal heirs of the auction purchaser seek to register the sale certificate

in their favour or request issuance of another sale certificate in place

of the auction purchaser, it does not amount to non-issuance of the

original sale certificate. Therefore, we hold that the sale certificate

has already been issued in favour of the auction purchaser, and

consequently, the right of redemption stands closed upon the issuance

of the sale certificate.

20. We are of the opinion that the petitioner had knowledge of the

auction of the mortgaged property but did not challenge it before the

Debts Recovery Tribunal (DRT). After the auction purchaser

deposited Rs. 28,00,000/-, the petitioner also deposited the remaining

amount of Rs. 24,00,000/- with the Bank and obtained release of the

remaining property from mortgage. On the same day, the Bank issued

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a notice releasing the property from mortgage.

21. The aforesaid facts are sufficient to hold that the auction

proceeding was conducted with the knowledge and implied consent

of the petitioners.

22. The substantive facts are disputed and can only be determined

after affording both parties an opportunity to lead evidence; therefore,

such issues cannot be adjudicated in writ jurisdiction. The petitioner

has wrongly contended that no alternative remedy was available,

despite the DRT being the competent authority to examine the

dispute. The petitioner ought to have approached the DRT within the

prescribed period of limitation. A time-barred remedy cannot be

revived or granted by way of a writ petition.

23. The relief of redemption cannot ordinarily be treated as time-

barred, as the fundamental principle of mortgage law is “once a

mortgage, always a mortgage,” until the right of redemption is

lawfully extinguished.

24. The Hon’ble Supreme Court, in the case of M. Rajendran &

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Ors. v. M/s KPK Oils and Proteins India Pvt. Ltd. & Ors., reported in

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2025 LiveLaw (SC) 931

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, has clarified that the amended provision—

whereby the right of redemption stands extinguished upon

publication of the sale notice applies even to loans advanced prior to

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the amendment, provided the default (i.e., classification as NPA)

occurred after 1 September 2016.

25. Therefore, if the SARFAESI proceedings were initiated prior to

the 2016 amendment (i.e., the default and consequential action

occurred before 1 September 2016), the unamended provision would

apply, and the borrower would retain the right of redemption until the

sale certificate is issued.

26. It has been held by the Hon’ble Apex Court that the petitioner

has the right to redeem the property until the sale certificate is issued

under the unamended provision. In the present case, the Bank has

already issued the sale certificate; therefore, the borrower’s right of

redemption would not subsist.

27. Considering the above facts and circumstances of the case, W.P.

No. 19856 of 2015 is dismissed and W.P. No. 5555 of 2017 is

disposed of with a direction to the Bank to hand over the sale

certificate to the legal heirs of the auction purchaser. If the legal heirs

of the auction purchaser desire to register the sale certificate, the

Bank shall take appropriate steps to have it registered in accordance

with law.

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(VIVEK RUSIA)

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JUDGE

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(PRADEEP MITTAL)

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JUDGE

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MSP

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