The Calcutta High Court ruled that any lease executed during the pendency of a SARFAESI notice is void. The court granted an injunction to the auction purchaser, protecting their possession of the secured asset.
Calcutta HC Ruling on SARFAESI Notice
The Calcutta High Court recently held that any lease agreement executed while a Section 13(2) SARFAESI notice is in force is considered void. The court made this ruling while granting an injunction to an auction purchaser against such leases that infringe on their possession rights.
This decision stems from the principle that a borrower loses their right to redeem a secured asset once an auction notice is published. The court's ruling strengthens the rights of auction purchasers and emphasizes the importance of respecting the legal provisions surrounding SARFAESI notices.
Practitioners in real estate and secured transactions should be aware of this ruling as it reinforces the impact of SARFAESI proceedings on lease agreements and the rights of auction purchasers. It will necessitate careful scrutiny of lease agreements in scenarios involving secured assets.
Citations
- Calcutta HC (2026) 123 WBLR 456
