Pandian Nallakannu Naidu vs The Authorised Officer, Punjab ... on 26 October, 2021

[Cites 28, Cited by 0]

Gujarat High Court

Pandian Nallakannu Naidu vs The Authorised Officer, Punjab ... on 26 October, 2021

Bench: Bhargav D. Karia

     C/SCA/14232/2021                                   JUDGMENT DATED: 26/10/2021



             IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

             R/SPECIAL CIVIL APPLICATION NO. 14232 of 2021
                                  With
         CIVIL APPLICATION (FOR VACATING STAY) NO. 1 of 2021
            In R/SPECIAL CIVIL APPLICATION NO. 14232 of 2021

FOR APPROVAL AND SIGNATURE:


HONOURABLE MR. JUSTICE BHARGAV D. KARIA
=========================================================
1     Whether Reporters of Local Papers may be allowed                       NO
      to see the judgment ?

2     To be referred to the Reporter or not ?                                NO

3     Whether their Lordships wish to see the fair copy                      NO
      of the judgment ?

4     Whether this case involves a substantial question                      NO
      of law as to the interpretation of the Constitution
      of India or any order made thereunder ?

==========================================================
                   PANDIAN NALLAKANNU NAIDU
                             Versus
       THE AUTHORISED OFFICER, PUNJAB NATIONAL BANK - ARMB
==========================================================
Appearance:
MR MB GOHIL(2702) for the Petitioner(s) No. 1,2
MR DIGANT B KAKKAD(6523) for the Respondent(s) No. 2
MR. VN SEVAK(3791) for the Respondent(s) No. 1
==========================================================

    CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA

                              Date : 26/10/2021

                        COMMON ORAL JUDGMENT

1. Heard, learned Advocate Mr. M.B. Gohil, for the petitioners, Mr. Digant B. Kakkad learned Advocate for the applicant-auction purchaser, and learned Advocate Mr. V.N. Sevak for the Respondent-Bank.

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C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021

2. By way of Civil Application No.1 of 2021, the applicant-auction purchaser has prayed to vacate the interim relief granted by this Court vide order dated 27th September, 2021, while admitting Special Civil Application No. 14232 of 2021.

3. The brief facts of the case are as under:

3.1 The applicant is the auction purchaser of the residential property of the petitioners. The applicant has paid the amount of Rs.1,16,56,000/-

for purchasing the residential property, out of which 25% amount was paid in March, 2020, whereas, the remaining 75% was paid on 1st January, 2021.

3.1.1 The respondent-Bank has sanctioned overdraft limit of Rs.97,00,000/- in favour of M/ s. S.R. Construction Company, wherein the petitioners are guarantors and the credit facility provided by the respondent-Bank was secured by mortgage of the immovable property / the residential house of the petitioners.

3.2 The respondent bank issued notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement Security Interest Act, 2002 (herein Page 2 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 after, 'Act of 2002'), calling upon the petitioners to pay Rs.1,14,00,405/-, as they were the guarantors for the financial assistance advanced by the Respondent-Bank to M/s. S.R. Construction Company.

3.3 It appears that another notice was issued on 29th December, 2018 under Section 13(2) of the Act of 2002 by the respondent-Bank and thereafter symbolic possession of the residential property of the petitioners was taken by order dated 11th March, 2019.

3.4 The Chief Metropolitan Magistrate passed an order under Section 14 of the Act of 2002 on 3 rd September, 2019 in favour of the Respondent-Bank.

3.5 The petitioners challenged the action of the respondent-Bank of taking symbolic possession of the residential property of the petitioners as well as the order dated 3rd September, 2019 before this Court by preferring Special Civil Application No. 23285 of 2019, seeking interim relief on the ground that the Presiding Officer of the Debts Recovery Tribunal (in short, 'the Tribunal') was on leave from 23rd December, 2019 to 30th December, 2019.

3.5.1 This Court on 27th December, 2019, passed Page 3 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 the following order in Special Civil Application No. 23284 of 2019 and gave breathing time to the petitioners to approach the Tribunal on or before 6th January, 2020;

"1. This petition, under Articles 226 and 227 of the Constitution of India, is filed by the petitioners praying to quash and set aside the demand notice issued under Section 13(2) of the SARFAESI Act.

2. Mr. Patadia, learned advocate for the petitioner states that the notice under Section 13(2) of the Act was issued against a dead person and in fact was not even issued to the legal heirs of the deceased. A statement is made in the petition that the Presiding Officer of the DRT is on leave from 23.12.2019 to 30.12.2019. He is likely to resume his duties on 31.12.2019.

3. Considering the circumstances as stated above, the respondent - Bank is restrained from taking possession of the property in question till 8.1.2020. In the meantime, the petitioners shall approach the Tribunal by way of an appropriate application on or before 06.01.2020. In the event the petitioners do not approach the Tribunal by 06.01.2020, the interim relief shall stand vacated automatically.

4. With the above observations and directions, this petition stands disposed of. Direct Service is permitted today."

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C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 3.6 The petitioners thereafter preferred Securitization Application No. 5 of 2020 on 1st January, 2020, challenging the action of the respondent-Bank of taking physical possession as well as the order passed under Section 14 of the SARFAESI Act on the ground that no notice was issued by the respondent-Bank on the borrowers and instead the notice under Section 13(3) of the Act of 2002 was issued only on the guarantors, which is not permissible. It was also contended by the petitioners that there was no bifurcation of the amount in the demand notice and no rate of interest was also mentioned in the said notice.

3.7 During the pendency of the Securitization Application, the respondent-Bank took the physical possession of the property in question with the help of the Court Commissioner on 19th January, 2020 and thereafter, the respondent-Bank issued sale notice and scheduled the property in question to be put-up for auction on 11th March, 2020.

3.7.1 The petitioners therefore challenged such an action of the respondent-Bank in the pending application, contending that the respondent-Bank failed to follow the Rules 8(5), 8(6), 8(7) and 9(1) of the Security Interest Page 5 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 (Enforcement) Rules, 2002 (hereinafter, 'Rules of 2002').

3.7.2 It was also contended that the respondent-Bank failed to upload the terms and conditions of sale on the website and therefore the sale notice itself is illegal and not in accordance with law.

3.8 The Tribunal passed an order dated 17.03.2020 to restrain the respondent-Bank from proceeding further pursuant to the auction held on 11th March, 2020 of the residential property of the petitioners, as the petitioners was ready to deposit Rs.15,00,000/- to settle the matter with the respondent-Bank as per the 'One Time Settlement' scheme.

3.9 Thereafter, the petitioners deposited Rs.15,00,000/- as per the One Time Settlement scheme and the matter was adjourned before this Court as well as the Tribunal with the consent of both the sides.

3.10 The Tribunal then passed the order dated 14th October, 2020 for non-compliance of the order passed in the month of March, 2020 by the respondent-Bank and granted further time to comply with the same.

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C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 3.11 It appears that thereafter the Tribunal finally heard the Securitization Application No. 5 of 2020 in December, 2020 and passed the order dated 28th December, 2020 dismissing the same.

3.12 While dismissing Securitization Application No. 5 of 2020, the Tribunal observed as under:

"31. The Applicants have failed to place on record any non-compliance of Rule 8(7) of Security Interest (Enforcement) Rules, 2002 regarding uploading of terms on the website, whereas, bank has placed on record relevant material regarding compliance of necessary steps to be taken for auction of the property under Rule 8(6) & Rule 8(7) of Security Interest (Enforcement) Rules, 2002. So on that account, I find no merits in the objections taken by the Applicants qua the auction already conducted.

32. Further, Applicants have questioned the validity of orders passed under Section 14 of the SARFAESI Act on the grounds that Ld. Chief Metropolitan Magistrate, without verifying that the bank has served the notice to all the borrowers or not, passed orders, which is liable to be set aside.

Admittedly, Section 14 of the SARFAESI Act, authorities are not required to Page 7 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 adjudicate the inter-se rights between the parties or validity of process on legal aspects. |The authorities are required to satisfy themselves, that bank has complied with the Procedural formalities required to be done under the Securitisation Act. So, it would not be appropriate to say that Ld. Chief Metropolitan Magistrate was under obligation to look into the merits of the Demand Notice issued to the Guarantor only, without serving notice to the Legal Heirs of the deceased porrower. It is admitted case that applicants approached before Ld. Chief Metropolitan Magistrate thus they could have challenged the said order within 45 days. So the latches on the part of the Applicants are otherwise fatal to the ground taken in this Securitization Application. So I find no merits to entertain any such plea.

Further, the Applicants themselves voluntarily surrendered the possession, so there is no question to restore back the possession to the Applicants. The Applicants have failed to explain under what circumstances they voluntarily surrendered the possession, so regarding restoration of possession, find no merits in the arguments advanced on behalf of the Applicants.

33. Further, there was no need to join the Legal Heirs ol deceased borrower/partner in the proceedings under Section 14 of the SARFAESI Act, because they are/were not the owners of the property and even bank had not issued any demand notice under Page 8 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 Section 13(2) of the SARFAESI Act to them. The bank has simply mentioned the name of the borrower, firm and factum of death of partners and issuance of Demand Notice to the Guarantors, so I find no merits in the objections raised against the process initiated by the Respondent Bank on that account.

34. Further, the Applicants have come with plea that it is the case of the bank that Applicants have voluntarily surrendered the possession of the property to the Court Commissioner on 19.01.2020. Once the Applicants surrendered the possession voluntarily, I find no merits in the contentions so raised on behalf of Applicants for restoration of possession.

35. Further, the Applicants have raised issue regarding OTS scheme, but conduct of the Applicants reflects that they intend to delay the matter without paying the dues of the bank. There is no actual tender at any point of time to pay the dues of the bank, even aS per the settlement scheme, so on that account also, Applicants are not entitled to any reliefs.

36. Further, bank has placed on record due compliance of Rule 8(6) & 8(7) of Security Interest (Enforcement) Rules, 2002 and there ls no counter to the said averments and documents, except simple objections on the part of the Applicants. On that account also, I find no merits in the contentions raised on behalf of the Page 9 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 Applicants.

37. Further, Respondent Bank has placed on record valuation report, but there is no counter valuation from the Applicants, as already discussed supra, so on that account also, I find no merits in the contentions raised on behalf of the Applicants.

38. The Applicants, if were, sanguinely intended to bring true facts before the bank, they would have filed objections intimating the details of Legal Heirs of partners of Borrower Firm, but they utterly failed to do so, rather at the fag end, they got one application filed before this Tribunal (reproduced in para 22 of this order supra) and after hearing the parties and on withdrawal of so filed application, this Tribunal, immediately on next date, passed following orders :

"22.12.2020 "Shri V.N. Sevak submitted that he does not want to file any reply and he will argue the application on merits.

Whereas, Shri Jha appeared for third party intervener submitted at bar that he has instructions to withdraw this application.

I have heard the third party intervener. At the day end of this litigation, applicant has come with Page 10 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 some application to put hindrance in the Securitisation Process initiated by respondent bank.

It appears that third party intervener who happens to be a near relative of the applicant and has filed this application at the behest of the applicant to create hindrance in the adjudication of this matter.

AS such withdrawal ts allowed subject to payment of cost of Rs. 2 Lukhs to be deposited with the National Defence Fund. It will be the duty of the bank to recover this cost and deposit with the National Defence Fund. Case is adjourned awaiting the presence on behalf of the applicant."

"At this stage, Shri Ritesh Patadia appeared and he submitted that cost of Rs. 2 Lakhs is at a higher side. I have considered the request so made and I see no merits to entertain any such request and the request made by Mr. Patadia clearty reflects that in fact applicant was the person behind the curtains to call such interveners.

I have heard both the counsels i.e. Shri V.N. Sevak and Shri Ritesh Patadia. Ld. Counsels have already submitted their written submissions and they have also argued on the lines submitted in the written submissions. Hearing is concluded. The case is Page 11 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 reserved for pronouncement of final order on or before 04.01.2021."

So, the modus operandi of the Applicants clearly reflects that instead of paying the dues of the bank, they intend to put technical hurdles in the recovery of the public money. The Applicants have raised certain vital issues, which have been duly dealt with by this Tribunal and some trivial issues which are required to be ignored in the light of judgment of the Hon'ble Supreme Court in L@T HOUSING FINANCE LIMITED Vs. M/S TRISHUL DEVELOPERS AND ANR. dated 27.10.2020, Wherein the Hon'ble Apex Court had held that when the action has been taken by the Respondent Bank as per the procedure prescribed by law and the person affected has a knowledge leaving no ambiguity or confusion in initiating proceedings under the provisions of the SARFAESI Act by the secured creditor, such action taken thereof cannot be held to be bad in Jaw merely on raising a trivial objection which has no legs to stand unless the person is able to show any substantial prejudice being caused on account of the procedural lapse as prescribed under the Act or the rules framed thereunder. The applicants have miserably failed to show any prejudice caused to them. This Tribunal granted injunction in favour of the applicant on 17.3.2020 but till date applicant have failed to make actual tender to claim redemption. Mere intention or assumption or by orally saying that applicants intends to pay the dues of the Page 12 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 bank to claim redemption would not suffice to have benefit of section 13(8) of Securitization Act. There must be actual tender of amount to the satisfaction of the secured Creditor. It appears that the applicants with a view to delay the Matter, time and again harped upon OTS scheme but in fact they failed to tender even the admitted amount as per their own notions. So under the given circumstances it cannot be said that applicants are/were seriously interested to liquidate the entire dues of the bank, even in terms of said OTS scheme. So, the Securitisation Application as such merits dismissal. All interim protections granted stands withdrawn and bank may proceed with the auction already conducted in accordance with law and receive money from the auction bidder to proceed further.

39. Before parting with this order, I must record that this Tribunal received notice from Hon'ble High court in a SCA filed by bank before Hon'ble High Court. In that SCA No. 14571/2020 as filed by the bank it appears that bank has failed to disclose injunction order granted by this Tribunal on 17.3.2020. The Applicant bank is a Premier Public Sector bank and conduct of bank in filing pleadings before higher forum without disclosing true facts speaks volume about seriousness of the bank official to pursue their cause before the court of law. It is not out of place to mention here that such tendency of litigants is liable to be depreciated. The copy of this order is directed to be sent Page 13 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 to concerned Circle Head of Respondent Bank, so that they may be careful in future to avoid such mistakes and irregularities.

40. Bank is directed to recover the cost from the Applicants, as although application of legal heirs of deceased partners of firm was dismissed, as they withdrew their application, but certainly they came at the instance of Applicants to hinder due adjudication of this case and delay the matter, so the cost can be recovered from the Applicants from the amount lying in no lien account as liability of said person is joint and several with Applicants and bank would be required to deposit the cost Bank is directed to recover the cost from the Applicants, as although application of legal heirs of deceased partners of firm was dismissed, as they withdrew their application, but certainly they came at the instance of Applicants to hinder due adjudication of this case and delay the matter, so the cost can be recovered from the Applicants from the amount lying in nolien account as liability of said person is joint and several with Applicants and bank would be required to deposit the cost within one month with National Defence Fund in the Account No. 11084239799 State Bank of India at New Delhi Main Branch (00691) and file a purshis in compliance of orders of this Tribunal. One month has been granted so that the parties, if aggrieved with this order, qua deposit of costs and any parties have any grouse, Page 14 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 they may avail efficacious remedy available to them. But this time is qua costs only and bank may proceed further in respect of sale already conducted forthwith in accordance with law. The Securitization Application is accordingly dismissed. Let copy of this order be supplied to the parties as per Rules."

3.13 The petitioners thereafter preferred Special Civil Application No. 796 of 2021 challenging the order of the Tribunal before this Court. However, before the petitioners could file the petition before this Court, respondent-Bank issued sale certificate in favour of the applicant-auction purchaser on 1st January, 2021 as the applicant-auction purchaser deposited the remaining 75% amount of the sale consideration.

3.14 The respondent-Bank also issued notice for removal of the belongings, as the respondent- Bank had already taken over the physical possession of the property in question on 11th March, 2020.

3.15 This Court passed an order on 18th January, 2021 to maintain status quo by all the concerned in Special Civil Application No. 796 of 2021.

3.16 It is pertinent to note that though the Page 15 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 petitioners were aware about the auction having taken place in the month of March, 2020 and that the applicant is the successful bidder and the auction purchaser, the petitioners did not join the applicant as a party respondent in the Special Civil Application. The applicant was also not joined as a proper and necessary party in the Securitization Application No. 5 of 2020 before the Tribunal.

3.17 The applicant therefore made an application for impleading him as a party in Special Civil Application No. 796 of 2021, which was allowed by this Court vide order dated 9th March, 2021.

3.18 Thereafter, this Court (Coram: Mr. Nikhil S. Kariel, J.) passed following order on 6th August, 2021 in Special Civil Application No. 796 of 2021, relegating the petitioners to approach the Debts Recovery Appellate Tribunal (for short, 'DRAT') to challenge the order dated 28th December, 2020 passed by the Tribunal, whereby the Tribunal dismissed the Securitization Application No. 5 of 2020 and the order of status quo which was granted on 18th December, 2021 by this Court was extended upto 6th September, 2021.

"1. Heard learned Advocate Mr. M.B. Gohil Page 16 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 for the petitioners, learned Advocate Mr. Vivek Sevak for the respondent No.1-Bank and learned Advocate Mr. Mohitkumar R. Gupta for the respondent No.2 - auctioned purchaser.

2. By way of this petition the petitioners have inter alia challenged the orders passed by the learned Debts Recovery Tribunal, Ahmeadabd-1 dated 14.12.2020 and 28.12.2020.

3. Learned Advocate Mr. Gohil, at the outset, submits that while he is well aware about the decision of the Hon'ble Supreme Court where the Hon'ble Supreme Court has laid down the law that ordinarily this Court should not interfere in matters under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, more particularly in view of the fact of alternative and efficacious remedy being available, yet the petition had been preferred at the relevant point of time since the learned Debts Recovery Appellate Tribunal where the appeal is provided against the order of learned Debts Recovery Tribunal was not functioning. He further submits that this petition may be disposed of by extending the interim relief granted by this Court vide order dated 18.01.2021 for a reasonable period of time, till which time, he may prefer an appeal before the learned Debts Recovery Appellate Tribunal.

4. This submission is opposed by the Page 17 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 learned Advocate Mr. Sevak for the respondent-Bank and learned Advocate Mr. Gupta for the respondent No.2.

5. Since it appears that an interim relief has been enuring in favour of the petitioners since January, 2021 and since the learned Advocates for the respondents are not able to dispute the contention that at the relevant point of time the learned Debts Recovery Appellate Tribunal was not functioning, and more particularly taking into account the prevailing COVID- 19 pandemic situation, this Court is of the opinion that the request made by learned Advocate Mr. Gohil, since it is reasonable deserves to be granted.

6. In this view of the matter, the following order is passed : - Interim relief granted by this Court vide order dated 18.01.2021 that is of maintaining status-quo with regard to the property in question is extended for a period of four weeks i.e. up till 06.09.2021. It is further made clear that if no interim directions are passed by the learned Debts Recovery Appellate Tribunal by the said date, the interim protection granted by this Court would be deemed to have been vacated.

7. With the above observations and directions, the present petition stands disposed of.

8. In view of disposal of main matter, the Civil Application No. 2 of 2021 would not Page 18 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 survive, hence the same is disposed of accordingly.

9. It is clarified that this Court has not gone into the merits of the matter."

3.19 The petitioner thereafter preferred appeal before the DRAT with an application for condonation of delay and by order dated 8th September, 2021, the DRAT condoned the delay.

3.20 The petitioners also preferred an application on 9th September, 2021 before the DRAT to place the matter on Board, seeking interim protection. Accordingly, the matter was fixed on 16th September, 2021. The petitioners also preferred Misc. Civil Application No. 5 of 2021 in Special Civil Application No. 796 of 2021 for extension of order of status quo but the same was withdrawn.

3.21 Learned Advocate for the petitioners did not press the Misc. Civil Application No. 5 of 2021 in view of the statement made by the learned Advocate for the respondent-Bank that they have given an undertaking before the Tribunal that they shall not proceed further till 9th September, 2021.

3.22 As there was no stay in operation of Page 19 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 any authority, the respondent-Bank executed the sale deed in favour of the applicant on 16th September, 2021.

3.23 The petitioners therefore has preferred this petition seeking following reliefs:

"28. ...

{A} Your Lordships may be pleased to issue a writ of Mandamus or any othe appropriate writ order or directions in the form of Mandamus or any other appropriate writ, restraining the Respondent Bank in taking any steps to remove the belongings of the petitioners from the impugned property and also further stays the letter dated 17/09/2021 with its consequential effects, pending admission and final disposal of the Appeal No. 14 of 2021 pending before the Ld. DRAT, Mumbai, as the same being illegal, arbitrary and colorable exercise of powers at the hands of the respondents;

{B} Pending admission and final disposal of this application, the respondent Bank be directed not to dispossess the petitioners from their residential premises and the Petitioners be permitted to occupy and use his property and further the Respondents and / or the Officers of the respondents or any person on their behalf or on behalf of the Bank be restrained from taking any further steps whatsoever and the parties be directed to Page 20 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 maintain status quo forthwith;

{C} ..."

3.24 This Court passed following order on 23rd September, 2021:

"1. Heard learned advocate Mr. S.S. Panesar for learned advocate Mr. M.B.Gohil for the petitioners and learned advocate Mr.V.N. Sevak appearing for the respondent-Bank on advance copy.

2. Learned advocate Mr. Panesar submitted that learned advocate Mr. Gohil has some personal difficulty due to death in the family and therefore, he is out of station.

3. Learned advocate Mr. Panesar further pointed out that this Court (Coram :

Hon'ble Mr. Justice Nikhil Kariel), by order dated 06.08.2021, passed the following order in Special Civil Application No. 796 of 2021:

"6. In this view of the matter, the following order is passed : - Interim relief granted by this Court vide order dated 18.01.2021 that is of maintaining status-quo with regard to the property in question is extended for a period of four weeks i.e. up till 06.09.2021. It is further made clear that if no interim directions are passed by the learned Debts Recovery Appellate Tribunal by the said date, the interim Page 21 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 protection granted by this Court would be deemed to have been vacated."

4. It was pointed out that the petitioner has approached the Debt Recovery Appellate Tribunal ['DRAT' for short] pursuant to the order passed by this Court. However, at present Chairperson of the DRAT is not available and the matter was last heard by the DRAT on 08.09.2021 and delay was condoned and thereafter, the mater was kept on 16.09.2021. It was submitted that immediately on 17.09.2021, the respondent- Bank has issued notice for removal of the goods from Bungalow No.39-Swagat Bungalows, Chandkheda, Ahmedabad by today i.e. 23.09.2021.

5. Learned advocate Mr. Sevak, who appears on advance copy submitted, that the petitioner has handed over possession of the property voluntarily in the year 2019 and thereafter, the petitioner has not taken out his belongings from the property.

6. Be that as it may, let learned advocate Mr. M.B.Gohil appear and argue the matter on Monday i.e. on 27.09.2019 on merits. Till then, the status quo order which was granted by this Court vide order dated 06.08.2021 shall continue upto 27.09.2021.

7. Issue Notice returnable on 29.09.2021. Learned advocate Mr. Sevak waives service of notice on behalf of the respondent- Bank. To be listed on top of the Board."

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C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 3.25 On 27th September, 2021, learned Advocate Mr. Gohil for the petitioners and learned Advocate Mr. Sevak for the Respondent- Bank made their submissions. On hearing both the sides, this Court admitted the matter and extended the interim relief granted vide order dated 23rd September, 2021 as under:

"Heard learned advocate Mr.M.B. Gohil for the petitioners and learned advocate Mr.V.N. Sevak for the respondent.

2. Rule returnable on 28th March, 2022.

3. By this petition, the petitioners have prayed for the following reliefs :

"(A) Your Lordships may be pleased to issue a writ of mandamus or any other appropriate writ order or directions in the form of mandamus or any other appropriate writ, restraining the respondent Bank in taking any steps to remove the belongings of the petitioners from the impugned property and also further stays the letter dated 17/09/2021 with its consequential effects, pending admission and final disposal of the Appeal No.14 of 2021 pending before the Ld. DRAT, Mumbai, as the same being illegal, arbitrary and colorable exercise of powers at the hands of the respondents;

(B) Pending admission and final disposal of this application, the Page 23 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 respondent Bank be directed not to dispossess the petitioners from their residential premises and the petitioners be permitted to occupy and use his property and further the respondents and/or the Officers of the respondents or any person on their behalf or on behalf of the Bank be restrained from taking any further steps whatsoever and the parties be directed to maintain status quo forthwith;

(C) Any other and/or further relief/s that this Hon'ble Court may deem fit looking to the facts and circumstances of the case may be awarded to the petitioner."

4. This Court passed the following order on 23rd September, 2021 :

"1. Heard learned advocate Mr. S.S. Panesar for learned advocate Mr. M.B.Gohil for the petitioners and learned advocate Mr.V.N. Sevak appearing for the respondent-Bank on advance copy.

2. Learned advocate Mr. Panesar submitted that learned advocate Mr. Gohil has some personal difficulty due to death in the family and therefore, he is out of station.

3. Learned advocate Mr. Panesar further pointed out that this Court (Coram :

Hon'ble Mr. Justice Nikhil Kariel), by Page 24 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 order dated 06.08.2021, passed the following order in Special Civil Application No. 796 of 2021:

"6. In this view of the matter, the following order is passed : -

Interim relief granted by this Court vide order dated 18.01.2021 that is of maintaining status-quo with regard to the property in question is extended for a period of four weeks i.e. up till 06.09.2021. It is further made clear that if no interim directions are passed by the learned Debts Recovery Appellate Tribunal by the said date, the interim protection granted by this Court would be deemed to have been vacated."

4. It was pointed out that the petitioner has approached the Debt Recovery Appellate Tribunal ['DRAT' for short] pursuant to the order passed by this Court. However, at present Chairperson of the DRAT is not available and the matter was last heard by the DRAT on 08.09.2021 and delay was condoned and thereafter, the mater was kept on 16.09.2021. It was submitted that immediately on 17.09.2021, the respondent-Bank has issued notice for removal of the goods from Bungalow No.39-Swagat Bungalows, Chandkheda, Ahmedabad by today i.e. 23.09.2021.

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C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021

7. Issue Notice returnable on 29.09.2021. Learned advocate Mr. Sevak waives service of notice on behalf of the respondent-Bank. To be listed on top of the Board."

5. Today, when the matter was called out, learned advocate for the Bank disclosed before the Court that the Bank has executed a sale-deed in favour of the auction purchaser on 16th September, 2021.

6. This Court vide order dated 6th August, 2021 granted interim relief in favour of the petitioners for a period of four weeks upto 6th September, 2021, so as to see that by the time petitioners approach the Debt Recovery Appellate Tribunal, they may not become Page 26 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 remediless.

7. Learned advocate Mr.Sevak has made a statement at bar that an undertaking was given before the chair person of the Debt Recovery Tribunal on behalf of the respondent Bank that the respondent Bank shall not take any further action till the application to condone delay preferred by the petitioners is heard by the Tribunal. Learned advocate Mr.Sevak further states that as the delay was condoned by the Tribunal and the matter was kept for hearing in September, 2021, and thereafter the chair person of the Tribunal demitted the office, the respondent Bank executed the sale-deed on 16th September, 2021.

8. In view of the above, there is a strong prima facie case in favour of the petitioners to grant interim relief as the balance of convenience would also tilt in favour of the petitioners if the stay of the sale-deed executed by the respondent Bank is not granted as well as the possession of the petitioners is not protected because the appeal which is pending before the Appellate Tribunal would become infructuous resulting into irreparable loss to the petitioners.

9. Learned advocate Mr.Gohil is also directed to file the details of schedule of payment by the petitioners, so as to see whether the provisions of Page 27 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 Sub-section 8 of Section 13 of the SARFAESI Act, 2002, can be invoked or not.

10. Learned advocate Mr.Gohil for the petitioners submitted that the petitioners are ready and willing to deposit a further amount of Rs.25 Lakh with the Registry of this Court, within a period of three weeks.

11. On condition to deposit Rs.25 Lakh with the Registry of this Court, within three weeks from today, the respondent Bank is directed not to dispossess the petitioners from the residential premises nor compel the petitioners to take the belongings of the petitioners out of the premises and let status quo be maintained with regard to the residential premises of the petitioners situated at 39, Swagat Bungalows-IV, New C.G. Road, Chandkheda, Ahmedabad.

12. Learned advocate for the petitioners is also directed to join auction purchaser Mr.Naresh Chand Gupta as respondent No.2."

3.26 Thereafter, the applicant-auction purchaser filed Civil Application No. 1 of 2021 in Special Civil Application No. 14232 of 2021 for vacating the interim relief under Article 226(3) of the Constitution of India.

4. Learned Advocate Mr. Kakkad appearing for the applicant-auction purchaser submitted that Page 28 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 the applicant has paid a sum of Rs.1,16,56,000/-, as directed by the respondent-Bank pursuant to the auction held on 11th March, 2020.

4.1 It was submitted that 25% amount was deposited in the month of March, 2020 and thereafter, 75% amount was deposited on 1st January, 2021, as intimated by the respondent- Bank, as there was no stay in operation of either the Tribunal or of this Court.

4.2 It was submitted that there is gross negligence on the part of the original petitioners-guarantors, inasmuch as the symbolic possession of the property in question was taken on 11th March, 2019 and the order under Section 14 of the Act of 2002 was passed by the learned Chief Metropolitan Magistrate on 3rd September, 2019, whereas, Special Civil Application No. 23285 of 2019 was filed only when the Presiding Officer of the Tribunal was not available for the period of four days and the petitioners did not take care and remained negligent for almost nine months in approaching the Tribunal under Section 17 of the Act of 2002.

4.3 It was further submitted that before the Tribunal also, the petitioners have prolonged the matter by taking time under the one or the Page 29 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 other pretext, as the petitioners were protected vide order dated 17th March, 2020, as the petitioners had deposited Rs.15,00,000/-, pursuant to the One Time Settlement Scheme. It was pointed out that after depositing Rs.15,00,000/-, the petitioner did not deposite any other amount before the Tribunal till the matter was finally heard in the month of December, 2020.

4.4 It was submitted that the applicant is a bona fide auction purchaser, who participated in the auction held by the respondent-Bank on 11th Marc, 2020.

4.5 It was submitted that the petitioners waited for considerably long time for the proceedings which were initiated before the Tribunal as well as before this Court and in view of that though the applicant was the successful purchaser in the auction conducted by the respondent-Bank in March, 2020. It was submitted that the sale deed was executed by the respondent-Bank on 16th March, 2021 when there was no stay order or any other order in operation since the undertaking given by the respondent- Bank before this Court as well as before the appellate Tribunal was upto only 9th September, 2021.

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C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 4.6 It was submitted that petitioners were never desirous and willing to pay the outstanding dues of the respondent-Bank and they neither paid any amount nor did they acted in a positive manner at any point of time right from the year 2012 and even when the second demand notice was issued by the respondent-Bank in the year 2018.

4.7 It was also pointed out that that the petitioners are guarantors and therefore they are equally liable to pay the outstanding dues of the respondent-Bank as that of the borrowers and in view of the fact that the sale deed has already been executed, now, the petitioners cannot invoke the provisions of Section 13(8) of the Act of 2002.

4.8 It was submitted that the applicant has invested his hard earned money and is in need of residential house and therefore he is a bona fide purchaser as the applicant arranged the funds by way of loan taken from his friends and relatives and with a view to repay the same, the applicant needs to sell the residential house in which he is residing at present so as to get better residential facilities.

4.9 It was therefore submitted that as the Page 31 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 petitioners have adopted the delay tactics and has not come before this Court or the Tribunal in time no further indulgence be shown by this Court and the interim relief granted by this Court be vacated as there is no prima facie case or balance of convenience in favour of the petitioners, as observed by this Court in the order dated 27th September, 2021.

5. On the other hand, learned Advocate Mr. Gohil appearing for the original petitioners submitted that this Court after considering the facts and after going through the records and after hearing the learned Advocates for the respective party passed the order dated 27th September, 2021, wherein, it has categorically recorded that there is a prima facie case and balance of convenience in favour of the petitioners and if the order passed by the Tribunal is stayed, the petitioner shall be put to irreparable loss as the residential property which is owned by the petitioners is already required to be salvaged by the petitioners by making full payment to the respondent-Bank.

5.1 Learned Advocate Mr. Gohil referred to the affidavit of the petitioners filed in Civil Application No. 1 of 2021 and submitted that the applicant was well aware about the pending Page 32 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 proceedings after the payment of 25% of the sale consideration. It was also submitted that the applicant was also aware of the final order passed in Securitization Application No. 5 of 2020 on 28th December, 2020, which was the first day of the Winter Vacation before this Court and therefore the applicant could not deposit the remaining 75% of the amount on 1st January, 2021.

5.2 It was submitted that there is gross violation of Rule 8(6) and Rule 9(1) of the Rules of 2002 on behalf of the respondent-Bank as no notice of sell was issued before 30 days by the respondent-Bank before confirming the sale. It was therefore submitted that there was mala fide intention on the part of respondent-Bank to procure money.

5.3 It was submitted that the respondent-Bank has taken advantage of the situation whereby when the Tribunal passed the order on 20th December, 2012, the respondent-Bank accepted the amount towards remaining 75% of the sale consideration from the applicant during the Winter Vacation and the very same modus operandi was repeated by executing the sale deed on 16th September, 2021 and thereby, the respondent-Bank did not intentionally extended the undertaking given before the Tribunal. It was therefore submitted Page 33 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 that the respondent-Bank has acted mala fide so as to deprive the petitioners of their valuable rights of salvaging their residential property, which was mortgaged though, the petitioners are ready and willing to deposit the entire amount as per the schedule given in the main matter pursuant to the order dated 27th September, 2021.

5.4 Learned Advocate Mr. Gohil relied on the following averments made at Paragraphs- 6.21 and 6.22 of the affidavit-in-reply filed for and on behalf of the petitioners;

"6.21 It is surprised to even read that the original petitioners who are contesting for more than one year are wrong and the applicant herein who belongs to middle class service going person is right who have purchased the litigation knowing full well that the controversy is on going and the appeal before Ld. DRAT could have been heard provided the Ld. Chair Person ought not to have retired.

6.22 Matter of record. However, it is humbly submitted that the applicant can manage a sum of 87 lakhs approximately in 3 days and for filing this application he has to take more than a week."

5.5 It was submitted that the petitioners have deposited Rs.25,00,000/-, pursuant to the order passed by this Court on 27th September, Page 34 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 2021, before the Registry of this Court on 18th October, 2021 so as to show the bona fides of the petitioners to repay the outstanding dues of the respondent-Bank.

5.6 In support of his submission, learned Advocate Mr. Gohil placed reliance on the decision of the Apex Court in the case of 'Mathew Varghese v. M. Amritha Kumar'1 to submit that the respondent-Bank is required to accept the proposal made by the petitioners for repayment as per the provisions of Section 13(8) of the Act of 2002 read with Rules 8(5), 8(6), 8(7) and 9(1) of the Rules of 2002 and the amount received from the applicant is required to be refunded to the applicant with interest, as directed by the Supreme Court in the aforesaid decision and the possession of the petitioners should be restored as the petitioners are ready and willing to pay the entire dues of the respondent-Bank within the stipulated time, as stated in the aforesaid affidavit.

6. Learned Advocate Mr. Sevak appearing for the respondent-Bank submitted that the respondent- Bank has acted bona fide and the allegations of mala fide leveled against the respondent-Bank are without any basis inasmuch as since 2012, the 1 (2014) 5 SCC 610;

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C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 petitioners are aware they are the guarantors and they have not paid any amount outstanding to the original borrowers for which the petitioners stood as guarantors.

6.1 It was pointed out that the petitioners never filed any application either before the respondent-Bank after March, 2020 to avail them the benefit of Section 13(8) of the Act of 2002 or before this Court or the Tribunal and thus the petitioners were never willing to pay the entire dues as per Section 13(8) of the Act of 2002. It was therefore submitted that the petitioners now cannot pray for availing them the benefit of Section 13(8) of the Act of 2002 by relying on the decision of the Apex Court in 'Mathew Varghese' (Supra).

7. Having heard the learned Advocates for the parties and having perused the material on record in detail and after considering the orders passed by the Tribunal as well as the conduct of the petitioners during the course of proceedings before the Tribunal, it appears that the petitioners have adopted delay tactics by not showing willingness to pay the outstanding dues of the respondent-Bank in spite of the undisputed fact that the petitioners are the guarantors of the amount advanced to the original borrowers by Page 36 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 the Respondent-Bank.

7.1 Since, the appeal filed by the petitioners is pending before the DRAT, so as not to affect the rights and contentions of the either side so that they can raise the same before the DRAT in the pending proceedings, only the question is considered, without entering into the merits of the matter, as to whether the interim relief granted by this Court on 27th September, 2021 should be continued during the pendency of the petition as well as the appeal filed by the petitioners before the DRAT or not.

7.2 On close scrutiny of the facts, which emerge from the record, it appears that the petitioners did not take any action after symbolic possession of the property in question was taken by the respondent-Bank in the month of March, 2019, till December, 2019 and they approached this Court only when the Presiding Officer of the Tribunal was on leave.

It is also pertinent to note that the though Chief Metropolitan Magistrate passed the order under Section 14 of the Act of 2002 on 3 rd September, 2019 it was also not challenged by the petitioners for almost three months before the Tribunal for the reasons best known to them.

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C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 Thus, the petitioners slept over the matter qua the actions taken by the respondent-Bank and only when the notice was issued by the Mamlatdar to take the physical possession of the residential property of the petitioners, the petitioners woke-up from slumber and filed the petition before this Court on the ground that the Presiding Officer of the Tribunal was on leave. This Court therefore granted interim protection to the petitioners so as to enable the petitioners to approach the Tribunal on or before 6th January, 2020.

7.3 The petitioners accordingly filed Securitization Application No. 5 of 2020 before the Tribunal but did not obtain the extension of the stay granted by this Court which was in operation till 8th January, 2020 and during the pendency of the Securitization Application, the physical possession of the property in question was taken over by the respondent-Bank on 11th March, 2020 and the same was also auctioned on 11th March, 2020 after giving requisite notice under Rules 8 and 9 of the Rules of 2002 to the petitioners. The petitioners however did not challenge or sought any relief from the Tribunal even after receipt of the notice under Rules 8 and 9 of the Rules of 2002. Therefore, the say of the petitioners that there is violation of Rules Page 38 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 8 and 9 of the Rules of 2002 is not tenable in view of the above undisputed facts. Therefore, the reliance placed on the decision of the Apex Court in 'Mathew Varghese' (Supra) would be of no help to the petitioners.

7.4 It is also pertinent to note that the petitioner instead of challenging the order passed by the Tribunal before the DRAT, approached this Court by filing Special Civil Application No. 796 of 2021. Considering the fact that the possession of the residential property of the petitioners was required to be taken over by the respondent-Bank, this Court protected the petitioners and ultimately relegated the petitioners to approach the DRAT vide order dated 6th August, 2021.

7.5 However, the petitioner did not get the extension of the stay order which was granted by this Court from the DRAT and therefore no fault can be found with the respondent-Bank in executing the sale deed in favour of the applicant-auction purchaser on 16th September, 2021 as there was no stay order in operation either against the respondent-Bank or the applicant-auction purchaser.

7.6 It would be relevant to refer to the Page 39 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 provisions of Section 13(8) of the Act of 2002, which reads as under:

"13.[(8) Where the amount of dues of the secured creditor together with all costs, charges and expenses incurred by him is tendered to the secured creditor 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,-- (i) the secured assets shall not be transferred by way of lease assignment or sale by the secured creditor; and

(ii) in case, any step has been taken by the secured creditor for transfer by way of lease or assignment or sale of the assets before tendering of such amount under this sub-section, no further step shall be taken by such secured creditor for transfer by way of lease or assignment or sale of such secured assets.]"

7.6.1 Rule 9(1) of the Rules of 2002 reads thus:

"9. Time of sale, issue of sale certificate and delivery of possession, etc.-[(1) No sale of immovable property under these rules, in first instance shall take place before the expiry of thirty days from the date on which the public notice of sale is published in newspapers as referred to in the proviso to sub-rule Page 40 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 (6) of rule 8 or notice of sale has been served to the borrower:

Provided further that if sale of immovable property by any one of the methods specified by sub rule (5) of rule 8 fails and sale is required to be conducted again, the authorized officer shall serve, affix and publish notice of sale of not less than fifteen days to the borrower, for any subsequent sale."

7.7 In view of the above provisions and considering the facts of this case, it cannot be said that the petitioner is entitled to get the benefit of the provisions of sub-Section (8) of Section 13 of the SARFAESI Act and the application made by the petitioner in the present proceedings on affidavit cannot be accepted just because the petitioners have deposited Rs.15,00,000/- in the year 2020 and further deposited Rs.25,00,000/- before the Registry of this Court on 18th October, 2021, pursuant to the order of this Court dated 27th September, 2021.

7.8 Therefore, the petitioners cannot be granted further time of 90 days to deposit the balance / remaining amount, subject to the confirmation from the respondent-Bank. The Supreme Court in the facts of the case of 'Mathew Varghese' (Supra) has held as under:

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C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 "26. In order to examine the correctness of the impugned judgment of the Division Bench, a serious look into Section 13, in particular sub-section (8) of the SARFAESI Act along with Rules 8 and 9 of the 2002 Rules is required. We, therefore, deem it appropriate to extract Sections 2(zc), 2(zf), 13(1) and (8) of the SARFAESI Act, as well as Rule 8 sub-rules (1), (3), (5) and (6) and also Rule 9(1) which are as under:

26.1 The SARFAESI Act "2. (zc) 'secured asset' means the property on which security interest is created;

*** (zf) 'security interest' means right, title and interest of any kind whatsoever upon property, created in favour of any secured creditor and includes any mortgage, charge, hypothecation, assignment other than those specified in Section 31;

13. Enforcement of security interest.-- (1) Notwithstanding anything contained in Section 69 or Section 69-A of the Transfer of Property Act, 1882 (4 of 1882), any security interest created in favour of any secured creditor may be enforced, without the intervention of the court or tribunal, by such creditor in accordance with the provisions of this Act.

*** (8) If the dues of the secured creditor Page 42 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 together with all costs, charges and expenses incurred by him are tendered to the secured creditor at any time before the date fixed for sale or transfer, the secured asset shall not be sold or transferred by the secured creditor, and no further step shall be taken by him for transfer or sale of that secured asset."

26.2 The Security Interest Rules, 2002 "8. Sale of immovable secured assets.-- (1) Where the secured asset is an immovable property, the authorised officer shall take or Cause to be taken possession, by delivering a possession notice prepared as nearly as possible in Appendix IV to these Rules, to the borrower and by affixing the possession notice on the outer door or at such conspicuous place of the property.

*** (3) In the event if possession of immovable property is actually taken by the authorised officer, such property shall be kept in his own custody or in the custody of any person authorised or appointed by him, who shall take as much care of the property in his custody as an owner of ordinary prudence would,under the similar circumstances, take of such property.

(5) Before effecting sale of the immovable property referred to in sub-

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C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 rule (1) of Rule 9, the authorised officer shall obtain valuation of the property from an approved valuer and in consultation with the secured Creditor, fix the reserve price of the property and may sell the whole or any part of such immovable secured assets by any of the following methods-

(a) by obtaining quotations from the persons dealing with similar secured assets or otherwise interested in buying the such assets; or

(b) by inviting tenders from the public;

(d) by private treaty.

(6) The authorised officer shall serve to the borrower a notice of thirty days for sale of the immovable secured assets, under sub-rule (5):

Provided that if the sale of such secured asset is being effected by either inviting tenders from the public or by holding public auction, the secured creditor shall cause a public notice in two leading newspapers one in_vernacular language having sufficient Circulation in the locality by setting out the terms of sale, which shall include-

(a) the description of the immovable property to be sold, including the details of the encumbrances known to the secured Page 44 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 creditor;

(b) the secured debt for recovery of which the property is to be sold;

(c) reserve price, below which the property may not be sold;

(d) time and place of public auction or the time after which sale by any other mode shall be completed.

(d) time and place of public auction or the time after which sale by any other mode shall be completed;

(e) depositing earnest money as may be stipulated by the secured creditor;

(f) any other thing which the authorised officer considers it material for a purchaser to know in order to judge the nature and value of the property. ...

***

9. Time of sale, issue of sale certificate and delivery of possession, etc.--(1) No sale of immovable property under these Rules shall take place before the expiry of thirty days from the date on which the public notice of sale is published in newspapers as referred to in the proviso to sub-rule (6) or notice of sale has been served to the borrower."

27. Under Section 13(1), it is provided that any security interest created in Page 45 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 favour of the secured creditor may be enforced without the intervention of the court and tribunal by such creditor in accordance with the provisions of this Act. The non obstante clause in the opening set of expressions contained in Section 13(1), as pointed out by Mr Singh, learned Senior Counsel for the borrowers, is restricted to section 69 or section 69- a of the tp act. Apart from noting the said statutory impediment, to be noted in Section 13(1), the more important feature to be noted is that a free hand is given to the secured creditor for the purpose of enforcing any security interest created in favour of secured creditor, without the intervention of the court or tribunal. The only other relevant aspect contained in the said subsection is that such enforcement should be in accordance with the provisions of this Act. A reading of Section 13(1), therefore, is clear to the effect that while on the one hand any secured creditor may be entitled to enforce the secured asset created in its favour on its own without resorting to any court proceedings or approaching the _ Tribunal, such enforcement should be in conformity with the other provisions of the SARFAESI Act.

28. Keeping the said stipulation contained in Section 13(1) in mind, it will have to be examined as to what are the other statutory requirements to be _ fulfilled when enforcement of a right created in favour of any secured creditor in respect of a security interest is created. As we Page 46 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 are concerned with the sale of property mortgaged by the borrowers, for the present we leave aside any other form or mode of enforcement, except the one relating to the equitable mortgage created in favour of the Bank. For that purpose, we find that sub-section (8) of Section 13 would be relevant.

29. A careful reading of sub-section (8), therefore, has to be made to apereciate the legal issue involved and the submissions made by the respective counsel on the said provision:

29.1 A plain reading of sub-section (8) would show that a borrower can tender to the secured creditor the dues together with all costs, charges and expenses incurred by the secured creditor at any time before the date fixed for sale or transfer. In the event of such tender once made as stipulated in the said provision, the mandate is that the secured asset should not be sold or transferred by the secured creditor. It is further reinforced to the effect that no further step should also be taken by the secured creditor for transfer or sale of the secured asset. The contingency stipulated in the event of the tender being made by a debtor of the dues inclusive of the costs, charges, etc., would be that such tender being made before the date fixed for sale or transfer, the secured creditor should stop all further steps for effecting the sale or transfer. That part, no further step should also be taken for transfer or sale.

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C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 29.2 When we analyse in depth the Stipulations contained in the said subsection (8), we find that there is a valuable right recognised and asserted in favour of the borrower, who is the owner of the secured asset and who is extended an opportunity to take all efforts to stop the sale or transfer till the last minute before which the said sale or transfer is to be effected. Having regard to such a valuable right of a debtor having been embedded in the said sub-section, it will have to be stated in uncontroverted terms that the said provision has been engrafted in the SARFAESI Act primarily with a view to protect the rights of a borrower, inasmuch as, such an ownership right is a constitutional right protected under Article 300-A of the Constitution, which mandates that no person shall be deprived of his property save by authority of law.

29.3 Therefore, de hors the extent of borrowing made and whatever costs, charges were incurred by the secured creditor in respect of such borrowings, when it comes to the question of realising the dues by bringing the property entrusted with the secured creditor for sale to realise money advanced without approaching any court or tribunal, the secured creditor as a trustee cannot deal with the said property in any manner it likes and can be disposed of only in the manner prescribed in the SARFAESI Act.

29.4 Therefore, the creditor should ensure that the borrower was clearly put on Page 48 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 notice of the date and time by which either the sale or transfer will be effected in order to provide the required opportunity to the borrower to take all possible steps for retrieving his property or at least ensure that in the process of sale the secured asset derives the maximum benefit and the secured or anyone on its behalf is not allowed the exploit the situation of the borrower by virtue of the proceedings initiated under the SARFAESI Act. More so, under Section 13(1) of the SARFAESI Act, the secured creditor is given a free hand to resort to sale of the property without approaching the court or Tribunal.

30. Therefore, by virtue of the stipulations contained under the provisions of the SARFAESI Act, in particular, Section 13(8), any sale or transfer of a secured asset, cannot take place without duly informing the borrower of the time and date of such sale or transfer in order to enable the borrower to tender the dues of the secured creditor with all costs, charges and expenses and any such sale or transfer effected without complying with the said statutory requirement would be a constitutional violation and nullify the ultimate sale.

31. Once the said legal position is ascertained, the statutory prescription contained in Rules 8 and 9 have also got to be examined as the said Rules prescribe as to the procedure to be followed by a secured creditor while resorting to a sale after the issuance of the proceedings Page 49 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 under Sections 13(1) to (4) of the SARFAESI Act. Under Rule 9(1), it is prescribed that no sale of an immovable property under the Rules should take place before the expiry of 30 days from the date on which the public notice of sale is published in the newspapers as referred to in the proviso to sub-rule (6) of Rule 8 or notice of sale has been served to the borrower. sub-rule (6) of Rule 8 again states that the authorised officer should serve to the borrower a notice of 30 days for the sale of the immovable secured assets. Reading sub-rule (6) of Rule 8 and subrule (1) of Rule 9 together, the service of individual notice to the borrower, specifying clear 30 days' time- gap for effecting any sale of immovable secured asset is a statutory mandate. It is also Stipulated that no sale should be affected before the expiry of 30 days from the date on which the public notice of sale is published in the newspapers. Therefore, the requirement under Rule 8(6) and Rule 9(1) contemplates a clear 30 days' individual notice to the borrower and also a public notice by way of publication in the newspapers. In other words, while the publication in newspaper should provide for 30 days' clear notice, since Rule 9(1) also states that such notice of sale is to be in accordance with the proviso to subrule (6) of Rule 8, 30 days' clear notice to the borrower should also be ensured as stipulated under Rule 8(6) as_ well. Therefore, the use of the expression "or" in Rule 9(1) should be read as "and" as that alone would be in Page 50 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 consonance with Section 13(8) of the SARFAESI Act.

32. The other prescriptions contained in the proviso to sub-rule (6) of Rule 8 relates to the details to be set out in the newseaper publication, one of should be in "vernacular language" with sufficient circulation in the locality by setting out the terms of the sale. While setting out the terms of the sale, it should contain the description of the immovable property to be sold, the known encumbrances of the secured creditor, the secured debt for which the property is to be sold, the reserve price below which the sale cannot be effected, the time and place of public auction or the time after which sale by any other mode would be completed, the deposit of earnest money to be made and any other details which the authorised officer considers material for a purchaser to know in order to judge the nature and value of the property.

33. Such a detailed procedure while resorting to a sale of an immovable secured asset is prescribed under rules 8 and 9(1). In our considered opinion, it has got a twin objective to be achieved:

33.1 In the first place, as already stated by us, by virtue of the stipulation contained in Section 13(8) read along with Rules 8(6) and 9(1), the owner/borrower should have clear notice of 30 days before the date and time when the sale or transfer of the secured asset would be Page 51 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 made, as that alone would enable the owner/borrower to take all efforts to retain his or her ownership by tendering the dues of the secured creditor before that date and time.

33.2 Secondly, when such a secured asset of an immovable property is brought for sale, the intending purchasers should know the nature of the property, the extent of liability pertaining to the said property, any other encumbrances pertaining to the said property, the minimum price below which one cannot make a bid and the total liability of the borrower to the secured creditor. Since, the proviso to sub-rule (6) also mentions that an other material aspect should also be made known when effecting the publication, it would only mean that the intending purchaser should have entire details about the property brought for sale in order to rule out any possibility of the bidders later on to express ignorance about the factors connected with the asset in question.

33.3 Be that as it may, the paramount objective is to provide sufficient time and opportunity to the borrower to take all efforts to safeguard his right of ownership either by tendering the dues to the creditor before the date and time of the sale or transfer, or ensure that the secured asset derives the maximum price and no one is allowed to exploit the vulnerable situation in which the borrower is placed.

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34. At this juncture, it will also be worthwhile to refer to Rules 8(1) to (3) and in particular sub-rule (3), in order to note the responsibility of the secured creditor vis-a-vis the secured asset taker possession of. Under sub-rule (1) of Rule 8, the prescribed manner in which the possession is to be taken by issuing the notice in the format in which such notice of possession is to be issued to the borrower is stipulated. Under sub-rule (2) of Rule 8 again, it is stated as to how the secured creditor should publish the notice of possession as prescribed under subrule (1) to be made in two _ leading newspapers, one of which should be in the vernacular language having sufficient circulation in the locality and also such publication should have been made seven days prior to the intention of taking possession. Sub-rule (3) of Rule 8 really casts much more onerous responsibility on the secured creditor once possession is actually taken by its authorised officer. Under Sub-rule (3) of Rule 8, the property taken possession of by the secured creditor should be kept in its custody or in the custody of a person authorised or appointed by it and it is stipulated such person holding possession should take as much care of the property in its custody as a owner of ordinary prudence would under similar circumstances take care of such property. The underlying purport of such a requirement is to ensure that under no circumstances, the rights of the owner till such right is transferred in the manner known to law is infringed. Merely Page 53 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 because the provisions of the SARFAESI act and the rules enable the secured creditor to take possession of such an immovable property belonging to the owner and also empowers to deal with it by way of sale or transfer for the purpose of realising the secured debt of the borrower, it does not mean that such wide power can be exercised arbitrarily or whimsically to the utter disadvantage of the borrower.

35. Under sub-rule (4) of Rule 8, it is further stipulated that the authorised officer should take steps for preservation and protection of secured assets insure them if necessary till they are sold or otherwise disposed of. Sub-rule (4), governs all secured assets, movable or immovable and a further responsibility is created on the authorised officer to take steps for the preservation and protection of secured assets and for that purpose can even insure such assets, until they are sold or otherwise disposed of. Therefore, a reading of Rules 8 and 9, in particular, sub-rules (1) to (4) and (6) of Rule 8 and sub-rule (1) of Rule 9 makes it clear that simply because a secured interest in a secured asset is created by the borrower in favour of the secured creditor, the said asset in the event of the same having become a non-performing asset cannot be dealt with in a light-hearted manner by way of sale or transfer or disposed of ina Casual manner or by not adhering to the prescriptions contained under the SARFAESI Act and the abovesaid Rules mentioned by us.

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36. Having analysed the relevant statutory prescriptions under the SARFAESI Act, as well as the 2002 Rules it will be necessary to refer to the decisions placed before us on the above aspects, before examining the manner in which the sale of the secured asset of the first and second respondents was dealt with by the fourth respondent Bank and by effecting the sale in favour of the appellant herein.

37. Mr Shyam Divan, learned Senior Counsel relied upon the decision in Narandas Karsondas, in which the right of a mortgagor as prescribed under section 60 of the tp act has been spelt out. Under section 60 of the tp act, at any time after the principal money fell due, there is a right in the mortgagor on payment or tender at a proper time and place of the mortgage money, to require a mortgagee to restore the property to the mortgagor with all rights prescribed as it stood prior to the mortgage. Under the proviso, the only impediment would be that if such a right of a mortgagor stood extinguished by the act of the parties or by the decree of a court. Certain other conditions are also stipulated in the said provision for the mortgagor to seek for redemption of the mortgaged property. Dealing with the said provision, this Court held as under in paras 34 and 35. Paras 34 and 35 are as under: (SCC p. 254) "34. The right of redemption which is embodied in Section 60 of the Transfer of Property Act is available to the Page 55 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 mortgagor unless it has been extinguished by the act of parties. The combined effect of Section 54 of the Transfer of Property Act and Section 17 of the Registration Act is that a contract for sale in respect of immovable property of the value of more than one hundred' rupees' without registration cannot extinguish the equity of redemption. In India it is only on execution of the conveyance and registration of transfer of the mortgagor's interest by registered instrument that the mortgagor's right of redemption will be extinguished. The conferment of power to sell without intervention of the court in a mortgage deed by itself will not deprive the mortgagor of his right to redemption.

The extinction of the right of redemption has to be subsequent to the deed conferring such power. The right of redemption is not extinguished at the expiry of the period. The equity of redemption is not extinguished by mere contract for sale.

35. The mortgagor's right to redeem will survive until there has been completion of sale by the mortgagee by a registered deed. In England a sale of property takes place by agreement but it is not so in our country. The power to sell shall not be exercised unless and until notice in writing requiring payment of the principal money has been served on the mortgagor. Further Section 69(3) of the Transfer of Property Act shows that when a sale has Page 56 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 been made in professed exercise of such a power, the title of the purchaser shall not be impeachable on the ground that no case had arisen to authorize the sale. Therefore, until the sale is complete by registration the mortgagor does not lose right of redemption." (emphasis added)

38. On a reading of the above paragraphs, we are able to discern the ratio to the effect that a mere conferment of power to sell without intervention of the court in the mortgage deed by itself will not deprive the mortgagor of his right to redemption, that the extinction of the right of redemption has to be subsequent to the deed conferring such power, that the right of redemption is not extinguished at the expiry of the period, that the equity of redemption fs not extinguished by mere contract for sale and that the mortgagor's right to redeem will survive until there has been completion of sale by the mortgagee by a registered deed. The ratio is also to the effect that the power to sell should not be exercised unless and until notice in writing requiring payment of the principal money has been served on the mortgagor. The above proposition of law of course was laid down by this Court in Narandas Karsondas while construing section 60 of the tp act. But as rightly contended by Mr Shyam Divan, we fail to note any distinction to be drawn while applying the above said principles, even in respect of the sale of secured assets created by way Page 57 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 of a secured interest in favour of the secured creditor under the provisions of the SARFAESI Act, read along with the relevant Rules. We say so, inasmuch as, we find that even while setting out the principles in respect of the redemption of a mortgage by applying section 60 of the tp act, this Court has envisaged the situation where such mortgage deed providing for resorting to the sale of the mortgage property without the intervention of the Court. Keeping the said situation in mind, it was held that the right of redemption will not get extinguished merely at the expiry of the period mentioned in the mortgage deed. It was also stated that the equity of redemption is not extinguished by mere contract for sale and the most important and vital principle stated was that the mortgagor's right to redeem will survive until there has been completion of sale by the mortgagee by a registered deed. The completion of sale, it is stated, can be held to be so unless and until notice in writing requiring payment of the principal money has been served on the mortgagor. Therefore, it was held that until the sale is complete by registration of sale, the mortgagor does not lose the right of redemption. It was also made clear that it was erroneous to suggest that the mortgagee would be acting as the agent of the mortgagor in selling the property.

39. When we apply the above principles stated with reference to section 60 of the tp act in respect of a secured interest in Page 58 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 a secured asset in favour of the secured creditor under the provisions of the SARFAESI Act and the relevant Rules applicable, under Section 13(1), a free hand is given to a secured creditor to resort to a sale without the intervention of the court or tribunal. However, under Section 13(8), it is clearly stipulated that the mortgagor i.e the borrower, who is otherwise called as a debtor, retains his full right to redeem the property by tendering all the dues to the secured creditor at any time before the date fixed for sale or transfer. Under sub-section (8) of Section 13, as noted earlier, the secured asset should not be sold or transferred by the secured creditor when such tender is made by the borrower at the last moment before the sale or transfer. The said sub-section also states that no further step should be taken by the secured creditor or transfer or sale of that secured asset. We find no reason to state that the principles laid down with reference to section 60 of the tp act, which is general in nature in respect of all mortgages, can have no application in respect of a secured interest in a secured asset created in favour of a secured creditor, as all the above stated principles apply on all fours in respect of a transaction as between the debtor and secured creditor under the provisions of the SARFAESI Act."

7.9 The Apex Court after considering the provisions of sub-Section (8) of Section 13 of the SARFAESI Act read with Rules 8 and 9 of the Page 59 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 Rules of 2002, came to the conclusion as under:

"50. section 29 of the rddb act is an enabling provision under which the Second and Third Schedules to the Income Tax Act, 1961 (43 of 1961) and the Income Tax Rules, 1962 can be applied as far as possible with necessary modifications as if the provisions and the Rules are referable to the debt due, instead of the income tax due. Therefore, fictionally, by virtue of section 29 of the rddb act, the mode and method by which a recovery of income tax can be resorted to under the Second and Third Schedules to the Income Tax Act and the Income Tax Rules, 1962 have to be followed. Therefore, reading Section 37 of the Sarfaesi Act and Section 29 of the RDDB Act, the only aspect which has to be taken care of is that while applying the procedure prescribed under Rule 15 of the Income Tax Rules, 1962***, no conflict with reference to any of the provisions of the Sarfaesi Act, takes place.

51. Mr Shyam Divan, learned Senior Counsel, also referred to Order 21 Rules 64 to 69 of the Civil Procedure Code in support of his submission that by virtue of Section 37 of the Sarfaesi Act, as it states that the provisions of the Sarfaesi Act will be in addition to and not in derogation of any other law for the time being in force apart from the Companies Act, the RDDB Act, etc., the provisions contained in CPC can also be imparted to Page 60 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 support the stand of Respondents 1 and 2. Since we have held that by applying Section 37 of the Sarfaesi Act, read along with Section 29 of the RDDB Act, the requirement of the statutory prescription under Section 13(8) read along with Rules

8 and 9(1) of the Security Interest Rules would be sufficiently supported, we do not find any necessity to delve into the submission made by referring to Rules 64 to 69 of Order 21 CPC.

52. Keeping the said basic principle in applying the above provisions in mind, when we refer to Rule 15 of Schedule II Part I of the Income Tax Act, 1961, in the first place it will have to be stated that a reading of the said Rule does not in any way conflict with either Section 13(8) of the Sarfaesi Act or Rules 8 and 9 of the 2002 Rules. As far as sub-rule (1) of Rule 15 is concerned, it only deals with the discretion of the Tax Recovery Officer to adjourn the sale by recording his reasons for such adjournment. The said Rule does not in any way conflict with either Rules 8 or 9 or Section 13, in particular subsection (1) or sub-section (8) of the Sarfaesi Act. Therefore, to that extent there is no difficulty in applying Rule

15. As far as sub-rule (2) is concerned, the same is clear to the effect that a sale of immovable property once adjourned under sub-rule (1) for a longer period than one calendar month, a fresh proclamation of sale should be made unless the defaulter consents to waive it. The said sub-rule also does not conflict with Page 61 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 any of the provisions of the Sarfaesi Act, in particular Section 13 or Rules 8 and 9. In fact there is no provision relating to grant of adjournment or issuance of a fresh proclamation for effecting the sale after the earlier date of sale was not adhered to in the Sarfaesi Act. In such circumstances going by the prescription contained in Section 37 of the Sarfaesi Act, as we have reached a conclusion that the provision contained in section 29 of the rddb act will be in addition to and not in derogation of the provisions of the Sarfaesi Act, the provisions contained in Rule 15, which is applicable by virtue of the stipulation contained in section 29 of the rddb act, whatever is stated in sub- rule (2) of Rule 15 should be followed in a situation where a notice of sale notified as per Rules 8 and 9(1) of the 2002 Rules, read along with Section 13(8) gets postponed. In our considered view such a construction of the provisions, namely, Sections 37, 13(8) and 37 of the Sarfaesi Act, read along with Section 29 with the aid of Rule 15 could alone be made and in no other manner.

53. We, therefore, hold that unless and until a clear 30 days' notice is given to the borrower, no sale or transfer can be resorted to by a secured creditor. In the event of any such sale properly notified after giving 30 days' clear notice to the borrower did not take place as scheduled for reasons which cannot be _ solely attributable to the borrower, the secured creditor cannot effect the sale or Page 62 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 transfer of the secured asset on any subsequent date by relying upon the notification issued earlier. In other words, once the sale does not take place pursuant to a notice issued under Rules 8 and 9, read along with Section 13(8) for which the entire blame cannot be thrown on the borrower, it is imperative that for effecting the sale, the procedure prescribed above will have to be followed afresh, as the notice issued earlier would lapse. In that respect, the only other provision to be noted is sub-rule (8) of Rule 8 as per which sale by any method other than public auction or public tender can be on such terms as may be settled between the parties in writing. As far as sub-rule (8) is concerned, the parties referred to can only relate to the secured creditor and the borrower. It is, therefore, imperative that for the sale to be effected under Section 13(8), the procedure prescribed under Rule 8 read along with Rule 9(1) has to be necessarily followed, inasmuch as that is the prescription of the law for effecting the sale as has been explained in detail by us in the earlier paragraphs by referring to Sections 13(1), 13(8) and 37, read along with Section 29 and Rule 15. In our considered view any other construction will be doing violence to the provisions of the Sarfaesi Act, in particular Sections 13(1) and (8) of the said Act.

54. Having pronounced the legal position as above, when we refer to the facts of Page 63 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 the present case, the initial sale was notified to take place on 25-9-2007. The paper publication was made on 23-82007. Therefore, applying Rule 9(1) read along with the proviso to sub-rule (6) of Rule 8, there can be no quarrel as to the procedure followed in effecting the publication for resorting to sale on 25-9- 2007. When it comes to the question of the intimation to the borrower as required under sub-rule (6) of Rule 8, we find that admittedly Respondents 1 and 2 were informed by the fourth respondent Bank only on 30-8-2007. Therefore, as the sale date was 25-9-2007 it did not fulfil the mandatory requirement of 30 clear days notice to the borrower as stipulated under sub-rule (6) of Rule 8. In fact, on this score itself it can be held that if the sale had been effected on 25-9-2007, it would not have been in accordance with Section 13(8) of the Sarfaesi Act, read along with Rules 8 and 9(1). But at the intervention of the Court, namely, the orders passed in M. Amritha Kumar v. Indian Bank dated 20-9-2007, the sale date fixed on 25-92007 was adjourned by six weeks. In any case, the sale was not effected even after the six weeks period expired as directed in the said order dated 20-9-2007. Securitisation Application No. 20 of 2007, came to be disposed of by the DRT only on 27-12-2007.

55. Therefore, once the securitisation application of the borrowers, namely, Respondents 1 and 2 was dismissed on 27- 12-2007, even assuming that there was no impediment for the secured creditor, Page 64 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 namely, the fourth respondent Bank to resort to sale under the provisions of the Sarfaesi Act, as held by us in the earlier paragraphs, there should have been a fresh notice issued in accordance with Rules 8(6) and 9(1) of the 2002 Rules.

Unfortunately, the fourth respondent Bank stated to have effected the sale on 28- 122007 by accepting the tender of the appellant and by way of further process, directed the appellant to deposit the 25% of the amount on that very day and also directed to deposit the balance amount within 15 days, which was deposited by the appellant on 11-1-2008. In fact, after the deposit of the 25% of the amount on 28-12- 2007, the fourth respondent Bank is stated to have confirmed the sale in favour of the appellant on 31-12-2007. After the deposit of the balance amount on 11-1-2008 by communication dated 22-2008, the fourth respondent Bank informed the _ first and second respondents about the confirmation of sale and thereby, provided no scope for Respondents 1 and 2 to tender the dues of the secured creditor, namely, the fourth respondent Bank with all charges, expenses, etc., as has been provided under Section 13(8) of the Sarfaesi Act. Therefore, the whole procedure followed by the fourth respondent Bank in effecting the sale on 28-12-2007 and the ultimate confirmation of the sale on 11-12008, stood vitiated as the same was not in conformity with the provisions of the sarfaesi act and the rules' framed thereunder. Though, such a_ detailed consideration of the legal issues was not Page 65 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 made by the Division Bench while setting aside the sale effected in favour of the appellant, having regard to the construction of the provisions of the Sarfaesi Act, the RDDB Act and the relevant Rules, we are convinced that the judgment of the Division Bench dated 8- 32010, passed in M. Amritha Kumar v. Union of India, was perfectly justified and we do not find any infirmity with the same."

7.10 Thus, in the facts before the Apex Court though the auction notice was given in the year 2007, no new notice was given to the borrower as required under Rules 8 and 9 of the Rules of 2002 and on that ground alone, though, the sale deed was executed in favour of the auction purchaser the Apex Court held in favour of the borrowers, granting them the benefit of Section 13(8) of the Act of 2002.

7.11 So far as the facts of the present case are concerned, the respondent-Bank issued requisite notice under Rules 8 and 9 of the Rules of 2002 to hold the auction on 11 th March, 2020, which was challenged by the petitioners before the Tribunal and therefore it cannot be said that no notice was issued by the respondent-Bank in compliance of Rules 8 and 9 of the Rules of 2002. Even, the Tribunal also found that the relevant rules of Rules of 2002 are duly complied with by the respondent-Bank and accordingly, Page 66 of 68 Downloaded on : Mon Jan 17 02:53:54 IST 2022 C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 Securitization Application No. 5 of 2020 was dismissed.

8. In view of the above, Civil Application No. 1 of 2021 filed by the applicant-auction purchaser deserves to be allowed and the same is allowed. The ad-interim-relief granted by this Court vide order dated 27th September, 2021, are hereby stands vacated.

8.1 The petitioners are directed to remove their belongings from the property in question within the period of four weeks from today and the possession of the property be handed over to the applicant auction purchaser during the pendency of the appeal before the DRAT, the physical possession whereof has already been taken over by the respondent-Bank.

8.2 The parties shall be bound by the decision, which may be taken by the DRAT in the pending appeal filed by the petitioners.

8.3 The applicant-auction purchaser shall file an undertaking before the DRAT to abide by the decision which may be taken in the pending appeal subject to further rights which may be available in accordance with law to challenge such a decision.

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C/SCA/14232/2021 JUDGMENT DATED: 26/10/2021 8.4 The DRAT shall hear the appeal of the petitioners as expeditiously as possible and preferably within the period of six months from the date of receipt of a copy of this order.

8.5 In view of the above findings, the main grievance raised in the Special Civil Application wold not survive and the same is also accordingly stands disposed of. Rule is discharged.

8.6 At this stage, learned Advocate Mr. Gohil requested that the amount of Rs.25,00,000/- deposited by the petitioners before the Registry of this Court be permitted to be withdrawn by the petitioners.

8.6.1 The request is acceded to and the permission is granted. The Registry is directed to refund the amount of Rs.25,00,000/- deposited by the petitioner by issuing an account payee cheque in the name of petitioner No.1.

(BHARGAV D. KARIA, J) UMESH/-

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