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@article{197045,
        author = {Ranjit Maurya and Dr. Rajesh Singh},
        title = {RIGHT OF REDEMPTION UNDER SARFAESI ACT: LEGAL ISSUES, JUDICIAL TRENDS, AND THE NEED FOR REFORM},
        journal = {International Journal of Innovative Research in Technology},
        year = {2026},
        volume = {12},
        number = {11},
        pages = {6752-6764},
        issn = {2349-6002},
        url = {https://ijirt.org/article?manuscript=197045},
        abstract = {The right of redemption under Section 13(8) of the SARFAESI Act, 2002 gives borrowers a final chance to recover their secured assets by paying the outstanding dues before the sale notice is published. At first glance, the provision appears straightforward. In practice, however, its application has led to repeated disputes. Courts have not always taken a consistent view, procedural rules remain somewhat unclear, and there is an ongoing stiffness with the principles laid down in the Transfer of Property Act, 1882. These issues together create uncertainty, both for borrowers seeking protection and for creditors aiming at speedy recovery.
This paper scrutinises these concerns in detail by tracing the judicial development of Section 13(8) and scrutinising key judicial decisions. Attention is given to recent Supreme Court rulings such as Celir LLP v. Bafna Motors (2023 INSC 838), M. Rajendran v. KPK Oils and Proteins India Pvt. Ltd. (2025 INSC 1144), and Sanjay Sharma v. Kotak Mahindra Bank. These cases attempt to settle the scope and timing of the right of redemption, yet certain interpretative gaps remain. The study also looks at the broader doctrinal stiffness between the SARFAESI framework—which is designed as a fast-track recovery mechanism—and the more substantive, equity-based ownership rights recognised under the Transfer of Property Act,1882.
A key issue identified is the lack of clarity regarding the exact stage at which the borrower’s right of redemption comes to an end. While the Supreme Court has attempted to bring uniformity, earlier High Court decisions reflect different approaches, leading to confusion in practice. Questions also arise in relation to the retrospective application of the 2016 amendment to Section 13(8), especially for loan accounts initiated before the amendment. In addition, procedural gaps in the Security Interest (Enforcement) Rules, 2002—particularly those relating to notice requirements—continue to create avoidable disputes. These gaps affect not only borrowers but also auction purchasers, whose confidence depends heavily on the finality and certainty of the sale process.
Using a doctrinal and comparative method, the paper argues that the current framework requires targeted reform rather than wide reform. It proposes specific amendments to Rules 8 and 9 to introduce clearer and more reliable notice procedures, including recognition of electronic modes of communication. It also recommends clarifying the concept of single-notice finality across different methods of sale, so that the point of termination of redemption rights is not left open to interpretation. Further, there is a need to streamline the functioning of Debt Recovery Tribunals to ensure consistent enforcement.
The proposed reforms focusing a workable balance. Creditors must be able to recover non-performing assets without unnecessary delay, yet borrowers should not be deprived of their equitable rights through practical ambiguity. A more coherent and predictable legal framework would support both objectives, strengthening confidence in the credit system while maintaining fairness in commercial dealings.},
        keywords = {Right of Redemption, SARFAESI Act 2002, Section 13(8), Transfer of Property Act, Supreme Court Judgments, DRT Jurisdiction, Auction Finality, Borrower Protection.},
        month = {April},
        }