The Supreme Court set aside a confirmed SARFAESI auction sale sixteen years on, holding that the balance-deposit timeline in Rule 9 of the Security Interest (Enforcement) Rules, 2002 is mandatory and goes to the root of the sale's validity. A digest of the facts, the holding, and what it means for auction purchasers and the heirs of a deceased guarantor.
On 9 April 2026, the Supreme Court restated the Mobilox Innovations discipline: in a Section 9 IBC application the Adjudicating Authority enquires only into the existence of a plausible pre-existing dispute, not its merits; NCLAT cannot conduct a mini-trial to test the defence.
DRAT Kolkata upheld rejection of a bank-borrower settlement that excluded the auction purchaser and ignored a finalised DRT order setting aside the sale.
On 9 January 2025, a two-judge bench of Justices J.B. Pardiwala and R. Mahadevan clarified the relationship between the Debt Recovery Tribunal's jurisdiction under Section 17 of the SARFAESI Act and the civil courts' residual jurisdiction over questions of title, partition, and the validity of pre-enforcement deeds. The judgment holds that the DRT's exclusive jurisdiction extends to the legality of Section 13(4) measures — and no further. Questions of ownership and the validity of deeds predating the bank's enforcement remain triable by civil courts under Section 9 of the CPC.