Case Citation: (2024) ibclaw.

in 41 DRAT

Reportable/Non-Reportable

Misc. Appeal No. 34 of 2023-DRAT-Kolkata

IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA
Misc. Appeal No. 34 of 2023
(Arising out of S.A. 564 of 2023 in DRT-III, Kolkata)

THE HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA

CHAIRPERSON

1. Union Bank of India, Overseas Branch (49560) 9, India Exchange

Place, Kolkata – 700 001, West Bengal;

2. Authorised Officer, Union Bank of India, Asset Recovery Branch,

14/1B, Ezra Street, Kolkata – 700 001, West Bengal.
,,, Appellants
-Versus-

Dilshad Elahi, Son of Sri Mohammad Farooq and Proprietor of

a proprietorship firm namely, M/s. Global Tanning Industries, residing at 4A,
4th Floor, 50, Lower Range, Kolkata – 700 019, West Bengal.
… Respondent

Counsel for the Appellants … Mr. Pankaj Kumar Mukherjee

Counsel for Respondent … Mr. Nimish Mishra

Mr. Debjit Mukherjee
Ms. Mitul Chakraborty
Ms. Anindita Maity

JUDGMENT : 3rd May, 2024

THE APPELLATE TRIBUNAL :

1. Instant appeal has arisen against an order dated 12.10.2023

passed by Learned DRT-III, Kolkata in S.A. 564 of 2023 (Dilshad Elahi
& Others -vs- Union Bank of India & Others) whereby Learned DRT
held the Sale Notice to be bad in law. Accordingly, Appellant Bank was
directed not to proceed with the sale. Feeling aggrieved, Appellant
Bank preferred the appeal.
2. I have heard the Learned Counsel for the parties and perused
the record.
3. As per the pleadings, facts of the case are that on 26.3.2019
Appellant Bank sanctioned/enhanced loan/Credit Facilities to the
Respondent No. 1. Loan Account was classified as N.P.A. on
29.3.2020. Notice under Section 13 (2) of the SARFAESI Act was

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issued on 16.4.2022. A representation to the same was given on
4.2.2023 which was replied on 13.4.2023. Possession Notice was
issued on 23.5.2023. SARFAESI Application was filed challenging the
Possession Notice. Sale Notice dated 1.7.2023 was challenged by the
SARFAESI Applicant before the Learned DRT which became infructuous
for want of bidder. Thereafter, a subsequent Sale Notice dated
18.8.2023 was again challenged by the SARFAESI Applicant by filing
I.A. 2383 of 2023 which too became infructuous for want of bidder.
Thereafter, subsequent Sale Notice dated 21.9.2023 was again
challenged by filing I.A. 2754 of 2023 which was allowed vide order
dated 12.10.2023.
4. I have heard the Learned Counsel for the parties and perused
the record.
5. It is an admitted position that the impugned Sale Notice was a
subsequent Sale Notice and not the first Sale Notice. Learned DRT has
recorded that Sale Notice was dated 21.9.2023 which was published in
the newspaper on 27.9.2023 and the date of auction sale was fixed on
13.10.2023. Learned DRT has placed reliance upon the judgment of
the Hon’ble High Court for the State of Telangana at Hyderabad in Sri
Sai Annadhatha Polymers & Another -vs- The Canara Bank, (2018 SCC
OnLine Hyd 178) and Celir LLP -vs- Bafna Motor (Mumbai) Private
Limited & Others [(2024) 2 SCC 1]. Accordingly it was held that clear
30 days notice should have been issued by the secured creditor to
grant a right to the Borrower to redeem the property and thereafter 15
days notice should have been issued under Rule 9 (1) of the Security
Interest (Enforcement) Rules, 2002 (hereinafter referred to as the
Rules) as it is a case of subsequent sale.
6. Learned Counsel for Appellant would submit that Learned DRT
has erred in holding that even in subsequent sale, clear 30 days notice
should have been issued by the secured creditor; rather once a notice
is issued, there is no requirement of fresh 30 days notice for
subsequent sale.

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7. Per contra, Learned Counsel for Respondent would submit that
the right of redemption by the Borrower extinguishes as soon as Sale
Notice is published in compliance of Rule 9 (1) of the Rules.
Accordingly, it is imperative that clear 30 days notice should be given
by the secured creditor so that the Borrower may have an opportunity
to get the property redeemed before the date of publication of notice
for public auction and thereafter a notice of sale can only be issued.
Learned Counsel has placed reliance upon the judgment of Hon’ble
Apex Court reported in Mathew Varghese -vs- M. Amritha Kumar &
Others [(2014) 5 SCC 610), Sri Sai Annadhatha Polymers & Another -
vs- The Canara Bank, (2018 SCC OnLine Hyd 178) and Celir LLP -vs-
Bafna Motor (Mumbai) Private Limited & Others [(2024) 2 SCC 1].
8. The only controversy in this matter is on the issue as to whether
in the case of subsequent sale fresh 30 days notice under Rule 8 (6) is
required or not?
Rules 8 (6) and 9 (1) of the Security Interest (Enforcement)
Rules, 2002 are as under :
“8. Sale of immoveable secured assets
(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):”

“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 (6) of rule 8 or notice of sale has been served to
the borrower:”

“Section 13 (8) SARFAESI Act reads as under:

“(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 -

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(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]”

9. We are conscious of the fact that in a recent judgment in CELIR

LPP -vs- Bafna Motors (Mumbai) Private Limited & Others
[(2024 2 SCC 1] the Hon’ble Apex Court has dealt with all the issues
relating to the auction sale as well as compliance of the provisions of
the Act as well as the Rules. The Hon’ble Apex Court has dealt with the
issue on the sanctity of public auction. Hon’ble the Apex Court has
placed reliance upon a judgment in Valji Khimji And Company -vs-
Official Liquidator of Hindustan Nitro Product (Gujarat) Limited
& Others [(2008) 9 SCC 299] wherein it was held that once an
auction is confirmed, the same can be interfered only on very limited
grounds as otherwise no auction would ever be complete.
10. Hon’ble Apex Court in Bafna Motors (supra) has reiterated the
case of K. Kumara Gupta -vs- Sri Markendaya and Sri
Omkareswara Swamy Temple & Others [(2022) 5 SCC 710]
wherein the Hon’ble Apex Court in paragraph 17 it has held that:
“17. The sale pursuant to the public auction can be set
aside in eventuality where it is found on the basis of material on
record That the property had been sold away at a throwaway
price and/or on a wholly inadequate consideration because of the
fraud and/or collusion and/or after any material irregularity
and/or illegality is found in conducing/holding the public auction.
After the public auction is held and the highest bid is received
and the property is sold in a public auction in favour of a highest
bidder, such a sale cannot be set aside on the basis of some
offer made by third parties subsequently and that too when they
did not participate in the auction proceedings and made any
offer and/or the offer is made only for the sake of making it and
without any serious intent. In the present case, as observed
hereinabove, though Shri Jagat Kumar immediately after
finalising the auction stated that he is ready and willing to pay a
higher price, however, subsequently, he backed out. If the

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auction-sale pursuant to the public auction is set aside on the
basis of such frivolous and irresponsible representations made
by such persons then the sanctity of a public auction would be
frustrated and the rights of a genuine bidder would be adversely
affected."

11. Further Hon’ble Apex Court has reiterated in Case Law and has
held in Eva Agro Feeds Private Limited -vs- Punjab National
Bank [(2023) SCC OnLine 1138] wherein it was held that there can be
no absolute or unfettered discretion on the part of the Liquidator to
cancel an auction which is otherwise valid. Hence it was held by the
Hon’ble Apex Court that in the case of Bafna Motors (supra) that :
“86. Thus, what is discernible from above is that, it is
the duty of the courts to zealously protect the sanctity of any
auction conducted. The courts ought to be loath in interfering
with auctions, otherwise it would frustrate the very object and
purpose behind auctions and deter public confidence and
participation in the same.
87. Any other interpretation of the amended Section
13 (8) will lead to a situation where multiple redemption offers
would be encouraged by a mischievous borrower, the
members of the public would be dissuaded and discouraged
from in participating in the auction process and the overall
sanctity of the auction process would be frustrated thereby
defeating the very purpose of the SARFAESI Act. Thus, it is in
the larger public interest to maintain the sanctity of the auction
process under the SARFAESI Act.”
“96. More than a decade back, this Court had expressed
serious concern despite its repeated pronouncements in regard
to the High Courts ignoring the availability of statutory remedies
under the RDBFI Act and the SARFAESI Act and exercise of
jurisdiction under Article 226 of the Constitution. Even after, the
decision of this Court in Satyawati Tondon (supra), it
appears that the High Courts have continued to exercise its writ
jurisdiction under Article 226 ignoring the statutory remedies
under the RDBFI Act and the SARFAESI Act.
Conduct of the Bank
97. The genesis of the entire case lies in the illegitimate
conduct of the Bank in placing different concerns above the
clear provisions of the law. First, there was failure on the part
of the Bank to issue sale certificate in favour of the auction
purchaser despite the fact that the entire payment of auction bid
was made. Secondly, although the right of redemption
clearly stood lapsed under Section 13 (8) of the SARFAESI Act
and auction having taken place wherein full bid amount was

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received, yet the Bank proceeded to accept the offer of full
payment of the Borrower which is clearly impermissible in law.
Once the auction notice is published in accordance with Section
13 (8) of the SARFAESI Act, then unless and until the auction is
held to be bad and illegal in the facts of the case, the right of
redemption of mortgage is not available to the borrower.”

12. In view of the law laid down by the Hon’ble Apex Court, now we
have to scrutinize whether the procedure, described in Rules 8 (6) and
9 (1) of The Rules, is followed by the secured creditors or not?
13. Now it is to be seen as to what are the rights of the Borrower
available to him under Section 13 (8) of the Act? At this stage it
would be apposite to refer to the provisions of Section 13 (8) of the
Act as was viewed in the old Act as well as in the amended Act of 2016
which are as under :
“Pre-amendment Section 13(8) of the SARFAESI Act
(8) If the dues of the secured creditor 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.

“Post-amendment Section 13(8) of the SARFAESI Act

(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.”

14. In the case of Mathew Varghese (supra) the Hon’ble Apex Court
has considered the importance of right of redemption of the Borrower.
Although the case of Mathew Varghese (supra) was under the

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provisions of the old Act but the difference in the old Act as well as in
the amended Act, as would appear from the provisions itself, is to the
effect that in the old Act the right of redemption was available to the
Borrower till the deed is executed while under the amended provisions
right is curtailed to an extent that the right of redemption is available
only till the date of publication of Sale Notice. However, as far as right
of redemption is concerned, the law laid down in the case of Mathew
Varghese (supra) still holds good, as has been reiterated by the
Hon’ble Apex Court in the case of Bafna Motors (supra). In Mathew
Varghese (supra) the Hon’ble Apex Court held that by virtue of the
stipulation contained in Section 13 (8) read 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
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. It is further held in
paragraph 33.3 that :
“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.”

15. It is further held in paragraph 34 that :

“x x x. 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 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.”

16. It is further held in paragraph 35 that :

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“35. X x x x x. 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 in a
casual manner or by not adhering to the prescriptions contained
under the SARFAESI Act and the abovesaid Rules mentioned by
us.”

17. It was further held in paragraph 38 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.” The law laid down in Ram Kishun -vs- State of
U.P. [(2012) 11 SCC 511] was reiterated wherein paragraph 13, 14
and 28 it was held that :
“13. Undoubtedly, public money should be recovered
and recovery should be made expeditiously. But it does not
mean that the financial institutions which are concerned only
with the recovery of their loans, may be permitted to behave like
property dealers and be permitted further to dispose of the
secured assets in any unreasonable or arbitrary manner in
flagrant violation of the statutory provisions.
14. A right to hold property is a constitutional right as
well as a human right. A person cannot be deprived of his
property except in accordance with the provisions of a statute.
(Vide Lachhman Dass v. Jagat Ram [(2007) 10 SCC 448] and
State of M.P. v. Narmada Bachao Andolan [(2011) 7 SCC 639]
Thus, the condition precedent for taking away someone's
property or disposing of the secured assets, is that the
authority must ensure compliance with the statutory provisions.
28. In view of the above, the law can be summarised to
the effect that the recovery of the public dues must be made
strictly in accordance with the procedure prescribed by law. The
liability of a surety is coextensive with that of the principal
debtor. In case there are more than one surety the liability is to
be divided equally among the sureties for unpaid amount of loan.
Once the sale has been confirmed it cannot be set aside unless a
fundamental procedural error has occurred or sale certificate had
been obtained by misrepresentation or fraud. (emphasis added)”

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18. It was further held in Mathew Varghese (supra) in paragraph 43
that :
“43. The above principles laid down by this Court also
make it clear that though the recovery of public dues should be
made expeditiously, it should be in accordance with the
procedure prescribed by law and that it should not frustrate a
constitutional right, as well as the human right of a person to
hold a property and that in the event of a fundamental
procedural error occurred in a sale, the same can be set aside.”

19. Ultimately in paragraph 53 of the judgment, Hon’ble Apex Court

held that once the sale does not take place pursuant to notice issued
under Rule 8 (6) and 9 (1) read along with Section 13 (8) for which
the entire blame cannot be thrown on the Borrower. It is imperative
that for effective sale, the procedure, prescribed above, will have to be
followed afresh as the notice issued earlier would lapse.
20. Division Bench of the Hon’ble Andhra Pradesh High Court in Sri
Sai Annadhatha Polymers (supra) has taken care of the amended
provisions of Rule 13 (8). It was held that :
“21. However, the amended provisions of Section 13(8) of
the SARFAESI Act bring in a radical change, inasmuch as the
right of the borrower to redeem the secured asset stands
extinguished thereunder on the very date of publication of the
notice for public auction under Rule 9(1) of the Rules of 2002. In
effect, the right of redemption available to the borrower under
the present statutory regime stands drastically curtailed and
would be available only till the date of publication of the notice
under Rule 9(1) of the Rules of 2002 and not till completion of
the sale or transfer of the secured asset in favour of the auction
purchaser. However, It is significant to note that Rule 8(6) of the
Rules of 2002 still continues to remain the same and thereunder,
the authorized officer of the secured creditor must necessarily
serve upon the borrower a notice of thirty days for sale of the
immovable secured asset taking recourse to one of the options
available under Rule 8(5) thereof.”

21. It was further held that “Therefore, even after the amendment of
Section 13 (8) of the SARFAESI Act, 2002 (hereinafter referred to as
the Act) such right of redemption would stand terminated immediately
upon publication of the Sale Notice under Rule 9 (1) of the Rules. A
secured creditor is bound to offer to the Borrower a clear 30 days

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notice period under Rule 8 (6) to enable him to exercise his right to
redemption. In consequence, a notice under Rule 9 (1) of the Rules,
2002 cannot be published prior to expiry of this thirty days period. In
the new scenario, post amendment of the Section 13 (8) of the
SARFAESI Act, such right of redemption would stand terminated
immediately upon publication of the Sale Notice under Rule 9 (1) of
the Rules.”
22. In Bafna Motors (supra) Hon’ble Apex Court considered the issue
of redemption of mortgagee under Section 16 of the Transfer of
Property Act, viz-a-viz, SARFAESI Act. It is held in paragraph 49 that:
“49. Thus, prior to the amendment of Section 13(8) of the
SARFAESI Act, this Court consistently held, that the borrower
shall continue to have a right of redemption of mortgage until
the execution of the conveyance of the secured asset by way of
a registered instrument. Furthermore, this Court in Mathew
Varghese (supra) found no inconsistency between the
unamended Section 13(8) of SARFAESI Act and the general right
of redemption under Section 60 of the Act 1882.”

23. Thereafter, Hon’ble Apex Court with approval considered the

judgment of the Hon’ble Telangana High Court in Sri Sai Annadhatha
Polymers (supra. The Hon’ble Apex Court has also considered the
judgment of the Hon’ble Telangana High Court in K.V.V. Prasad Rao
Gupta -vs- State Bank of India (2021 SCC OnLine TS 328) wherein
reliance is placed on Sri Sai Annadhatha Polymers (supra). It was held
by the Hon’ble Telangana High Court in paragraph 21 that :
“21. Thus from the above judgments it is clear that under
Rule 8(6) of the Rules of 2002, the petitioners are entitled for a
thirty day notice period enabling them to clear the loan and to
redeem the property as envisaged under Section 13(8) of the
SARFAESI Act, and that if they fail to repay the amount within
the stipulated period, after expiry of said period of 30 days, the
secured creditor is entitled to issue publication of sale notice
under Rule 9(1), and that on publication of such notice, the right
of borrower to redeem the property stands extinguished.”

24. Hon’ble Apex Court also considered that approval of its own
judgment in the case of Sakina & Another -vs- Bank of India & Others

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[(2021) 12 SCC 761] as regards the provisions of Section 13 (8) are
concerned. In paragraph 15 of the Sakina (supra) it was held that :
“15. Be it noted that on 1-9-2016 amendment to Section
13(8) of the 2002 Act came into force as a result of which the
dues of the secured creditor together with all costs, charges and
expenses incurred by him are required to be 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.”

25. It was held in paragraph 68 that :

“68. However, with the advent of the 2016 Amendment,
Section 13(8) of the SARFAESI Act now uses the expression
"before the date of publication 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” which by no stretch of imagination could be said to be in
consonance with the general rule under the Act 1882 that the
right of redemption is extinguished only after conveyance by
registered deed. Thus, in the light of clear inconsistency between
Section 13(8) of the SARFAESI Act and Section 60 of the Act
1882 the former special enactment overrides the latter general
enactment in light of Section 35 of the SARFAESI Act. Thus, the
right of redemption of mortgage is available to the borrower
under the SARFAESI Act only till the publication of auction notice
and not thereafter, in light of the amended Section 13(8).”

26. Hon’ble Apex Court in paragraph 88 in Bafna Motors (supra) held

that
“88. In view of the aforesaid discussion, we hold that as
per the amended Section 13(8) of the SARFAESI Act, once the
borrower fails to tender the entire amount of dues with all cost &
charges to the secured creditor before the publication of auction
notice, his right of redemption of mortgage shall stand
extinguished/waived on the date of publication of the auction
notice in the newspaper in accordance with Rule 8 of the
Rules of 2002.”

27. Hence it is absolutely clear that the right of redemption has been
granted in favour of the Borrower which is a sacrosanct right.
28. Hon’ble Apex Court, in the case of Bafna Motors (supra), has
reiterated the laws laid down in National Spot Exchange Limited

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-vs- Anil Kohli, Resolution Professional for Dunar Foods Limited
[(2022) 11 SCC 761] that :
“102. x x x x where the law is clear the consequence
thereof must follow. The High Court has no option but
implement the law. The relevant observations made in it
are being reproduced below: -
"15.1. In Mishri Lal [BSNL -vs- Mishri Lal, (2011) 14
SCC 739: (2014) 1 SCC (L&S) 387], it is observed that
the law prevails over equity if there is a conflict. It is
observed further that equity can only supplement the law
and not supplant it.
15.2. In Raghunath Rai Bareja [Raghunath Rai Bareja -vs-
Punjab National Bank, (2007) 2 SCC 230], in paras 30 to
37, this Court observed and held as under: (SCC pp. 242-
43)
"30. Thus, in Madamanchi Ramappa -vs-
Muthaluru Bojjappa [AIR 1963 SC 1633] (vide para
12) this Court observed: (AIR p. 1637)
12.... [What is administered in Courts is justice
according to law, and considerations of fair
play and equity however important they may
be, must yield to clear and express provisions
of the law."
31. In Council for Indian School Certificate Examination v.
Isha Mittal [(2000) 7 SCC 521] (vide para 4) this Court
observed: (SCC p. 522)
‘4.... Considerations of equity cannot prevail and do
not permit a High Court to pass an order contrary to
the law.’
32. Similarly, in P.M. Latha v. State of Kerala [(2003) 3
SCC 541: 2003 SCC (L&S) 339] (vide para 13) this Court
observed: (SCC p. 546)
'13. Equity and law are twin brothers and law should
be applied and interpreted equitably but equity
cannot override written or settled law.
33. In Laxminarayan R. Bhattad -vs- State of
Maharashtra [(2003) 5 SCC 413] (vide para 73) this Court
observed: (SCC p. 436)
‘73. It is now well settled that when there is a
conflict between law and equity the former shall
prevail.'
34. Similarly, in Nasiruddin -vs- Sita Ram Agarwal [(2003)
2 SCC 577] (vide para 35) this Court observed: (SCC p.
588)
'35. In a case where the statutory provision is plain
and unambiguous, the court shall not interpret the

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same in a different manner, only because of harsh
consequences arising therefrom.'
35. Similarly, in E. Palanisamy -vs- Palanisamy [(2003) 1
SCC 123] (vide para 5) this Court observed: (SCC p. 127)
'5. Equitable considerations have no place where the
statute contained express provisions.
36. In India House -vs- Kishan N. Lalwani [(2003) 9 SCC
393] (vide para 7) this Court held that: (SCC p. 398)
'7. ... The period of limitation statutorily prescribed
has to be strictly adhered to and cannot be relaxed
or departed from for equitable considerations.’ …”

29. Now it is to be seen as to whether in the case of subsequent

sale, 30 days notice, under Rule 8 (6) of the Rules, is required or not?
Whether 15 days notice, before issuing notice under 1st Proviso to Rule
9 (1) of the Rules, is required or not? It was held by Hon’ble Apex
Court in Bafna Motors (supra) in paragraph 37 that :
“37. From the above provisions under Rule 8(6) it is clear
that the authorised officer of the Bank shall serve on the
borrower a notice of thirty days for sale of immovable property,
and that if the sale of such secured assets is by way of public
auction, the Bank/secured creditor, shall cause publication of
such notice in two leading newspapers, one in vernacular,
language having sufficient circulation in the locality by setting
the out the terms of sale, mentioned in the said provision; and
under sub-rule (1) of Rule 9, such sale of immovable of property
under these Rules shall not 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.”

30. It has been held by the Hon’ble Apex Court in Mathew Varghese
(supra) in paragraph 53 that :
“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 transfer of the secured asset on
any subsequent date by relying upon the notification issued
earlier. In other words, once the sale does 9 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

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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.”

31. Right of redemption of the Borrower is a sacrosanct right as

provided under the law. The amended provisions of Section 13 (8) of
the Act bring in a radical change, inasmuch as the right of the
borrower to redeem the secured asset stands extinguished thereunder
on the very date of publication of the notice for public auction
under Rule 9 (1) of the Rules. In effect, the right of redemption
available to the borrower under the present statutory regime stands
drastically curtailed and would be available only till the date of
publication of the notice under Rule 9 (1) of the Rules and not till
completion of the sale or transfer of the secured asset in favour of the
Auction Purchaser. However, it is significant to note that Rule 8 (6) of
the Rules still continues to remain the same and thereunder, the
Authorized Officer of the secured creditor must necessarily serve upon
the borrower a notice of 30 days for sale of the immovable secured
asset taking recourse to one of the options available under Rule 8 (5)
thereof. Therefore, even if the amendment of Section 13 (8) of the
Act, Secured Creditor is bound to afford to the Borrower a clear 30
days notice period under Rule 8 (6) to enable him to exercise his right
of redemption. In consequence, a notice under Rule 9 (1) cannot be
published prior to expiry of 30 days period. In the new scenario post
amendment of Section 13 (8) of the Act, such right of redemption

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would stand terminated immediately upon publication of the Sale
Notice under Rule 9 (1) of the Rules. Proviso attached to Rule 9 (1)
simply provides that if the sale of immoveable property by one of the
methods specified by Sub-rule (5) of Rule 8 fails, sale is required to be
conducted again. The Authorised Officer shall serve, affix and publish
notice of sale on not less than 15 days to the Borrower for any
subsequent sale. It means that in case of subsequent sale, the period
of 30 days, as required under Rule 9 (1) is curtailed to 15 days. This
proviso of Rule 9 (1) in no manner curtailed the period of notice
provided under Rule 8 (6). Had it been the intention of the
Legislature, that period provided under Rule 8 (6) would also have to
be amended by the legislature. But intentionally Rule 8 (6) is not
amended but the period in subsequent sale is curtailed to 15 days. It
means that even in the case of subsequent sale, provisions of Rule 8
(6) have to be followed by the Authorised Officer. Accordingly, it is
incumbent upon the Authorised Officer, even in case of subsequent
sale, to comply the provisions of Rule 8 (6) as well as proviso to Rule 9
(1). Law nowhere curtails the right to redemption available to the
Borrower under Section 13 (8) of the Act in case of a subsequent sale.
Accordingly, I am of the considered view that even in case of
subsequent sale, Authorised Officer is required to issue 30 days notice
under Rule 8 (6) and thereafter 15 days notice under Proviso attached
to Rule 9 (1).
32. On the basis of the discussion made above, I am of the
considered opinion that in the present case, as has been noted earlier,
it is a case of subsequent sale wherein Sale Notice was issued on
21.9.2023 which was published in newspaper on 27.9.2023 and the
date of auction sale was fixed on 13.10.2023 which is clearly in
violation of Rule 8 (6) and Proviso 1 of Rule 9 (1) of the Rules.
Accordingly, I am of the considered view that the Learned DRT
although has not recorded this reasoning in detail but ultimate decision

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is correct. Accordingly, I do not find any infirmity in the impugned
order. Appeal is liable to be dismissed.

ORDERED

Appeal is dismissed. Impugned order dated 12.10.2023, passed

by Learned DRT-III, Kolkata in S.A. 564 of 2023 (Dilshad Elahi &
Others -vs- Union Bank of India & Others), is affirmed.
Let a copy of judgment be circulated amongst all in DRTs under
the jurisdiction of DRAT, Kolkata.
No order as to costs.
File be consigned to Record room.
Copy of the order be supplied to Appellant and the Respondents
and a copy be also forwarded to the concerned DRT.
Order dictated, signed, dated and pronounced in open Court.

(Anil Kumar Srivastava,J)

Chairperson
Dated: 3rd May, 2024
ac

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