Section 13(8) of SARFAESI Act: How Long Does Borrower’s Right of Redemption Survive?

By Khanindra Das Corporate Law Articles October 10, 2026

Summary: The right of a borrower to redeem a secured asset under Section 13(8) of the SARFAESI Act has undergone a significant change following the 2016 amendment. While the earlier provision permitted redemption until the date fixed for sale, the amended provision moves the statutory cut-off to the publication of the sale notice. The article examines the Supreme Court decisions in Mathew Varghese v. M. Amritha Kumar, Celir LLP v. Bafna Motors (Mumbai) Pvt. Ltd. and M. Rajendran v. KPK Oils Pvt. Ltd., alongside the continuing distinction between the statutory protection under Section 13(8) and the equity of redemption under Section 60 of the Transfer of Property Act. It discusses the thirty-day sale-notice requirement under Rule 9(1), conflicting High Court approaches, private-treaty sales, defective notices and the position of auction purchasers. It also explains the practical implications for borrowers, including early tender of dues, monitoring publication dates, challenging defective enforcement measures and approaching the Debt Recovery Tribunal under Section 17 within the prescribed limitation period.

1. Introduction
2. The Statutory Text and the 2016 Change
3. The Position Before 2016
4. Celir LLP v. Bafna Motors
5. M. Rajendran v. KPK Oils Pvt. Ltd.
6. What Remains Uncertain
7. Consequences for the Borrower
8. Remedies and Practical Guidance
9. Conclusion
References

1. Introduction

A borrower served with a possession notice, or whose property has been advertised for sale, usually asks one question first: until when can the secured asset still be saved by paying the dues? Under Section 13(8) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“the SARFAESI Act”), as originally enacted, the answer was “until the date fixed for sale”. Since the amendment of 2016, the statute gives a much earlier cut-off. The Supreme Court has now held that the statutory right ends when the notice of sale is published. Yet the position across the High Courts, and the interplay with the Security Interest (Enforcement) Rules, 2002 (“the Rules”), is not entirely settled. This article sets out the text, the case law, the points that remain open, and how a borrower’s counsel should act on them.

2. The Statutory Text and the 2016 Change

Before the amendment, Section 13(8) provided that if the dues of the secured creditor, together with costs, charges and expenses, were tendered “at any time before the date fixed for sale or transfer”, the secured asset would not be sold or transferred, and no further step could be taken for its sale.

The Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016, brought into force on 1 September 2016, substituted the sub-section. As amended, it protects the asset if the dues are tendered “at any time before the date of publication of notice for public auction or inviting quotations or tender from public or private treaty for transfer by way of lease, assignment or sale of the secured assets”. Two consequences follow. First, the asset cannot be transferred if the tender is made before that date. Second, if the creditor has already taken a step for transfer before the tender, no further step may be taken.

The shift is from a cut-off tied to the date fixed for sale to one tied to the date of publication of the notice. The borrower’s window shrinks by the length of the sale-notice period, which under Rule 9(1) of the Rules is not less than thirty days.

3. The Position Before 2016

The pre-amendment cases still matter, because the borrower’s argument for a longer survival of redemption rests on them. In Mathew Varghese v. M. Amritha Kumar, (2014) 5 SCC 610, the Supreme Court treated the borrower’s right as continuing until the sale was completed, and read the SARFAESI Act together with the pre-existing law on the equity of redemption. The underlying principle is that a mortgagor’s right to redeem is not wiped out by the mere fact that enforcement has begun. Section 60 of the Transfer of Property Act, 1882 recognises the right to redeem until it is extinguished by act of parties or by decree of court, and borrowers have relied upon it as a right that is not extinguished by implication.

Two distinct rights must be kept apart. The equity of redemption is a general-law right of the mortgagor, and Section 13(8) is a statutory mechanism that, once triggered by a valid tender, restrains the creditor from proceeding with a sale. The 2016 amendment narrowed the second. Whether it also extinguished the first is the question that continues to arise.

4. Celir LLP v. Bafna Motors

In Celir LLP v. Bafna Motors (Mumbai) Pvt. Ltd., (2024) 2 SCC 1, decided by the Supreme Court on 21 September 2023, the Court considered the amended Section 13(8) and held that the borrower’s right of redemption in a SARFAESI enforcement stands extinguished on publication of the auction notice under Rule 9(1). The Court read the 2016 amendment as deliberately moving the cut-off earlier, and it did not treat the earlier decisions on the equity of redemption as preserving the right up to the sale or the issue of the sale certificate in an enforcement under the Act.

Two propositions emerge from Celir. The first is that a borrower cannot treat the date of auction as the last day for tender. The second is that the Court tied the cut-off to publication of the notice, which makes the date and form of publication, and not the date of the sale, the decisive factual question in any dispute.

5. M. Rajendran v. KPK Oils Pvt. Ltd.

The Supreme Court revisited the question on 22 September 2025 in M. Rajendran v. KPK Oils Pvt. Ltd., by a Bench comprising J.B. Pardiwala and R. Mahadevan, JJ. On the reported summaries, the decision is significant in practice in several respects.

It treats the cut-off as the earliest of the relevant steps in the sale process: the right is lost once the creditor has published the notice for auction, or invited quotations or tenders, or moved towards a sale by private treaty. It also applies the cut-off to private-treaty sales, so that the borrower cannot assume the protection lasts until a negotiated transfer is concluded. The Court is also reported to have dealt with composite notices that serve the Rule 8(6) and Rule 9(1) purposes together, and with the thirty-day gap that Rule 9(1) requires between the later of service of the notice on the borrower and its publication in newspapers, and the sale.

The Court also dealt with the argument that the amendment should not touch loans advanced before 2016, and it protected the vested rights of an auction purchaser holding a sale certificate. Reports further indicate that the Court described the position as a “glaring anomaly” and called for the Rules to be amended. The anomaly may be stated thus: the statute ends the right of redemption at publication of the notice, while the Rules still prescribe a thirty-day period before the sale, in which the borrower may be expected to arrange funds. The result is a period of weeks in which the borrower is told a sale is coming but has no statutory right to stop it by paying.

6. What Remains Uncertain

Even after Celir and Rajendran, four points call for caution in advice and in pleading.

First, the High Courts have not spoken with one voice. The Punjab and Haryana High Court in Pal Alloys is reported to have held that the equity of redemption survives until the sale certificate is issued. The Jammu & Kashmir and Ladakh High Court, in a decision of 30 December 2025 (Nazir Ahmad Bhat), is reported to have held that redemption ends on publication of the Rule 9(1) notice. A borrower in the Gauhati High Court’s jurisdiction should assume both lines will be cited, and that the Supreme Court decisions will be pressed as binding on the point.

Second, the Rules have not been amended to address the anomaly the Supreme Court identified. The borrower’s counsel can legitimately argue that, until they are, any ambiguity in a composite or defective notice should be resolved in the borrower’s favour, since the cut-off bites only on a valid publication.

Third, sales by private treaty and by invitation of quotations raise their own factual questions: when was the “notice” published, and was it a notice that complied with the Rules? A borrower cannot lose a right by reference to a notice that was never validly given.

Fourth, the exact scope of the Court’s treatment of retrospectivity and of the interaction between the thirty-day period and the cut-off should be read in the full text of Rajendran before it is relied on in any pleading.

7. Consequences for the Borrower

The practical consequences are significant. A borrower who tenders after publication cannot ask for the sale to be stopped as a matter of statutory right. The tender may still be accepted by the creditor by consent, which is a commercial and not a legal outcome, and many secured creditors will accept it since recovery, rather than sale, is the object of enforcement. If the creditor refuses, the borrower’s remedy is to challenge the sale under Section 17, and not to rely on Section 13(8).

The borrower also loses leverage in negotiation. A one-time settlement offer made before publication is made against the backdrop of a statutory right to stop the sale. The same offer made after publication is a request for indulgence.

For the secured creditor, the corollary is that a defective or ambiguous notice puts the cut-off itself in doubt, and with it the validity of the sale.

8. Remedies and Practical Guidance

First, the demand notice under Section 13(2) and the possession notice under Section 13(4) should be treated as the commencement of a timeline, and not as a distant threat. The borrower should obtain a written statement of dues early, so that a full tender can be made quickly and without dispute about the amount.

Second, the tender should be unconditional, for the whole of the dues together with costs, charges and expenses, and sent in a manner that leaves a record, with a covering letter that invokes Section 13(8) expressly. A partial or conditional tender invites the answer that the statutory condition is not met.

Third, the borrower should monitor newspaper publications and the creditor’s website for the sale notice, and record the date on which the notice was first published and the date on which it was served. These two dates matter for the cut-off and for the thirty-day period under Rule 9(1).

Fourth, where publication has already happened, the borrower should not abandon the argument. The questions to examine are whether the notice complied with Rule 8 and Rule 9, whether the description and reserve price were correct, whether the notice was composite in a way that confused the dates, and whether the tender was in fact made earlier. Any of these may support an application under Section 17 before the DRT within the forty-five days allowed, with a prayer for interim protection.

Fifth, a tender should not be the only step. An application under Section 17 should be filed within time, since the period of limitation runs from the date on which the measure is taken, and the position on condonation of delay is itself contested.

9. Conclusion

The right of redemption under Section 13(8) now ends, on the Supreme Court’s reading, when the notice of sale is published, and not when the sale is held or the certificate is issued. For the borrower, that turns the first weeks after a demand notice into the period that matters most. For the creditor, it makes the form and date of publication the foundation of the sale. The High Courts have not fully aligned, and the Rules have not been brought into line with the statute, so counsel on either side should plead the date of publication with precision and be ready for a dispute about what that publication actually was.