S. KARTHIK & ORS. versus N. SUBHASH CHAND JAIN & ORS. on 23 September 2021

1. It will be relevant to note that this Court in the case ofMathew Varghese itself has held that in the event of any such saleproperly notified after giving a 30 days’ clear notice to theborrower does not take place as scheduled for the reasons, whichare not solely attributable to the borrower, then the securedcreditor cannot effect the sale and he will have to initiate theprocedure de novo. [Para 56][1136-F-H]

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A2. It could be seen that immediately after the notice wasissued on 21.1.2012, the guarantors approached the DRT,Chennai, by way of S.A. No. 69 of 2012. The guarantors gave animpression to the DRT, Chennai, that they can sell the propertywithin 15 days and make the payment of the entire considerationwithin 15 days, and that the balance amount could be settled withinBone month. Acting on the representation of the guarantors, theDRT, Chennai, vide order dated 27.2.2012 granted interim stayfor a period of 30 days, restraining the respondent-Bank fromproceeding further, pursuant to the sale notice dated 21.1.2012.However, this was subject to deposit of 50% of the outstandingCamount within the said period. It could thus be seen that the saleas per the notice dated 21.1.2012, which was scheduled to takeplace on 27.2.2012, could not take place on the scheduled dateon account of interim orders passed by the DRT, Chennai, whichwere passed on the representation of the guarantors. [Para57][1137-A-C]D

3. It could thus be seen that the Second Sale Notice dated9.7.2012 was in continuation of the proceedings of the First SaleNotice dated 21.1.2012, which sale could not be effected only onaccount of the interim orders passed by the DRT, Chennai, onthe representation made by the appellants and respondent Nos.E2 to 4. It could further be seen that even in view of the law laiddown by this Court in the case of Mathew Varghese, since thesale scheduled on 27.2.2012, as per the First Sale Notice dated21.1.2012, could not be held due to the reasons attributable solelyto the guarantors, there was no necessity of again following the Fsame procedure of providing a 30 days’ clear notice. In any case,the respondent-Bank issued a fresh Second Sale Notice on9.7.2012 to the appellants, scheduling the sale on 20.7.2012.There is a substantial distinction of facts in the present case ascompared to those in the case of Mathew Varghese. In the caseof Mathew Varghese after the dismissal of S.A., the respondent-GBank had surreptitiously accepted the tender of the auctionpurchaser on the very next day of dismissal of S.A. without issuinga notice to the guarantors/borrowers and also confirmed the sale,and only after the confirmation of sale and receipt of the entireamount, informed the borrowers/guarantors about the sale beingHconfirmed. It is not the case here. In the present case, after the S.A. was dismissed on 2.7.2012, the respondent-Bank againissued a fresh Notice on 9.7.2012 scheduling the sale on 20.7.2012.[Para 60][1138-A-E]

4. The facts in the case of Mathew Varghese are alsodistinguishable inasmuch as though between the date ofpublication of notice in the newspapers and the date scheduledfor sale, a clear 30 days’ period was provided, but insofar as theindividual notice to the borrowers/guarantors and the datescheduled for sale, a 30 days’ clear period was not provided. Andthis was with regard to the very first notice. On the aforesaidpremise, this Court in the case of Mathew Varghese held thatthe word ‘or’ used in Rule 9 of the said Rules will have to be readas ‘and’, and that there should be a clear 30 days’ period betweenthe date of publication of notice in the newspapers as well asindividual notice to the borrower/guarantor and the datescheduled for sale. Clearly, in the present case, there has beencompliance with the same, insofar as the first notice is concerned,whereas in the case of Mathew Varghese, there was no 30 days’period between individual notice and the date of sale. [Para61][1138-E-H]

5. The appellants had an opportunity for redemption of themortgage and clearing their properties from encumbrances.However, the appellants, even during this period, did not avail ofthe said opportunity. [Para 64][1139-E-F]

6. It is to be noted that in the meanwhile, the auctionpurchaser had bid for the properties at Items ‘A’ and ‘C’ in theSchedule of Properties in the Second Sale Notice dated 9.7.2012(i.e. the properties at Items ‘A’ and ‘D’ in the Schedule ofProperties in the First Sale Notice dated 21.1.2012). In the saidsale, which was held on 20.7.2012, the auction purchaser was thesuccessful bidder having bid for Rs.1,45,66,000/- andRs.3,40,55,000/- respectively, in all totaling to Rs.4,86,21,000/-.Upon payment of the entire amount, the sale was confirmed on21.7.2012. Not only that, the sale was duly registered on 14.9.2012after the auction purchaser had spent a sum of Rs.38,89,880/-towards the registration charges. It is to be noted that theappellants instead of complying with the directions, had filed I.A.No.437 of 2012 in S.A. No. 227 of 2012 seeking certain directions AB

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Awith regard to deposit of the amount in some other account. TheDRT, Chennai, vide order dated 12.9.2012, dismissed the saidI.A. No.437 of 2012, and thereby, granted liberty to therespondent- Bank to proceed with the sale. It is only thereafter,that the sale came to be registered in favour of the auctionpurchaser on 14.9.2012. It is, thus, clear that the sale came to beBregistered in favour of the auction purchaser in view of the libertygranted by the DRT, Chennai, in its order dated 12.9.2012. [Para65][1139-F-H; 1140-A-B]

7. Even thereafter, the guarantors continued with theirCeffort to prolong the proceedings. Various orders came to bepassed in the Civil Revision Petitions, which we have alreadyreferred to hereinabove. In one of the orders passed by the HighCourt, i.e., the order dated 30.4.2013, the appellants were alsodirected to deposit the amount collected by way of rent beforethe DRT, Chennai. Finally, finding that after the confirmation ofDsale and after the issuance of the sale certificate, the Court couldnot interfere, the said Civil Revision Petitions came to bedismissed on 29.7.2013. [Para 66][1140-C-D]

8. It could thus be seen that the appellants had more thanone opportunity for redemption of the mortgage. However, fromEtheir conduct, it appears that they were only interested inprotracting the litigation. It is the appellants at whose interventionand on whose incorrect representation, the sale, which wasscheduled to be held on 27.2.2012 in pursuance of the noticedated 21.1.2012, could not be held. Even after the dismissal ofFS.A. No. 69 of 2012 on 2.7.2012, the respondent -Bank againissued a Second Sale Notice on 9.7.2012 scheduling the sale on20.7.2012 in which the auction purchaser emerged as a successfulbidder. It is thus clear that the appellants had enough time from21.1.2012 till 2.7.2012 for redemption of their mortgagedproperties. However, they did not avail of that opportunity. EvenGafter the auction purchaser emerged successful in the bid andhad paid the bid money, an opportunity was given by the DRT,Chennai, vide order dated 7.8.2012, to the appellants to depositthe amount of Rs.4.80 crore within one month. However, withoutcomplying with the same, the appellants continued with their H

dilatory tactics by filing an application being I.A. No. 437 of 2012in S.A. No. 227 of 2012. Even thereafter, they continued with theproceedings before the High Court, wherein certain interimorders were passed, and finally, the High Court, finding that inview of the sale being confirmed and the sale being registeredno interference could be warranted, dismissed the Civil RevisionPetitions. Thereafter again, they approached this Court by wayof Special Leave Petitions, which were subsequently withdrawn.Ideally, the litigation ought to have stopped at least at that stage.[Para 68][1140-G-H; 1141-A-D]

9. The facts in the case of Mathew Varghese and the factsin the present case are totally different. In any case, in view ofthe observations made in paragraph 53 of the judgment of thisCourt in the case of Mathew Varghese, this Court is of the viewthat since the sale scheduled on 27.2.2012 in pursuance to thenotice dated 21.1.2012 could not be held on account of the reasonssolely attributable to the appellants/guarantors, there was nonecessity to provide 30 days’ period in the Second Sale Noticedated 9.7.2012, which was in continuation of the First Sale Noticedated 21.1.2012. [Para 70][1141-F-G]

10. The appellants had ample opportunities for redemptionof mortgage, they failed to avail of the said opportunities. [Para73][1142-E]

11. Even if viewed from another angle, the claim of theappellants is not sustainable. The two judges Bench of This Courtin the case of Mathew Varghese, has heavily relied on thejudgment of the three judges Bench of this Court in the case ofNarandas Karsondas. It has been held by this Court in the caseof Narandas Karsondas, that the right of redemption, which isembodied in Section 60 of the Transfer of Property Act, is availableto the mortgagor unless it has been extinguished by the act ofparties. It has been held, that only on execution of the conveyanceand registration of transfer of the mortgagor’s interest byregistered instrument, that the mortgagor’s right of redemptionwill be extinguished. In the present case, the DRT, Chennai, videorder dated 12.9.2012, had granted liberty to the respondent-Bank to proceed with the sale. The sale came to be registered infavour of the auction purchaser on 14.9.2012. As such, in any AB

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Acase, the mortgagor’s right of redemption stood extinguished on14.9.2012. The Division Bench of the Madras High Court had,therefore, rightly dismissed the Civil Revision Petitions, videorder dated 29.7.2013. The said order of the Madras High Courtdated 29.7.2013 came to be challenged before this Court by wayof Special Leave Petitions. This Court, vide order dated 7.7.2014,Bhad issued limited notice in the said Special Leave Petitions.However, vide order dated 17.4.2015, the said Special LeavePetitions came to be dismissed as withdrawn. It is in the thirdround of litigation, that the DRT, Chennai, allowed the S.A. No.227 of 2012, vide order dated 25.6.2018. Applying the law, as laidCin the case of Narandas Karsondas and in the case of MathewVarghese, the order passed by the DRT, Chennai, dated 25.6.2018,was not sustainable insofar as setting aside the sale notice dated9.7.2012 and the consequent sale. The DRAT, Chennai, hasrightly reversed the same, which has been upheld by the HighCourt vide the impugned judgment. [Para 74][1142-E-H; 1143-DA-C]

12. This Court will have to take into consideration thepurpose with which the SARFAESI Act came to be enacted.Unlike international banks, the banks and financial institutionsin India did not have power to take possession of securities and Esell them. It was, therefore, noticed, that it had resulted in slowpace of recovery of defaulting loans and mounting levels of non-performing assets of banks and financial institutions. It was alsonoticed that there were certain areas in which the banking andfinancial sector did not have a level playing field as compared to Fother participants in the financial markets in the world. It wasfurther noticed that the existing legal framework relating tocommercial transactions had not kept pace with the changingcommercial practices and financial sector reforms. As such, theSARFAESI Act was enacted with the purpose for securitizationand empowering banks and financial institutions to takeGpossession of the securities and to sell them without theintervention of the Court. [Para 76][1143-D-G]

13. In the present case, it would show that, every attempthas been made to frustrate the purpose of the SARFAESI Act.The respondent-Bank was required to indulge in three rounds ofH

litigations, out of which, the two have reached upto this Court.[Para 77][1143-G-H]

14. Though the auction purchaser emerged as the successfulbidder, in the bids held on 20.7.2012, and though the sale wasconfirmed on 21.7.2012, and though the sale has been registeredin his favour on 14.9.2012, for a period of last 9 years, he couldnot enjoy the fruits of the said sale. Not only that, but theappellants continued to enjoy the rent of the properties, theownership of which vests in the auction purchaser. [Para 78][1143-H; 1144-A]

15. The excess amount, which remained with therespondent-Bank, has rightly been directed to be paid torespondent No. 3 by the DRT, Chennai, which has beenconcurrently upheld by the DRAT, Chennai, as well as the HighCourt. [Para 81][1144-E-F]

16. The appeals are therefore found to be without merit,and as such, are dismissed with costs. The appellants shall paythe costs quantified at Rs.1,00,000/- (Rupees One lakh only)payable each to the Respondent Bank and the auction purchaser.Pending applications, if any, shall also stand disposed of. [Para83][1144-H]

17. While dismissing the appeals, taking into considerationthe fact that, though the auction purchaser has be- come the ownerof the properties at Items ‘A’ and ‘D’ of the Schedule of Propertiesin the First Sale Notice dated 21.1.2012, he could not enjoy thefruits of the same, and that the appellants have continued to enjoythe rent of the properties, we find that this is a fit case whereinthe powers under Article 142 of the Constitution of India need tobe invoked. [Para 84][1145-A-B]

18. This Court, therefore, direct the appellants to handoverthe vacant and peaceful possession of the properties at Items ‘A’and ‘D’ of the Schedule of Properties in the First Sale Noticedated 21.1.2012, within a period of 8 weeks from the date of thisjudgment to the auction purchaser. We further direct theappellants to pay the rent, received by them, from the saidproperties, since 15.9.2012 till date, within a period of threemonths from the date of this judgment. However, in the facts of AB

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Athis case, this Court do not intend to pass any orders with regardto interest on the said amount. [Para 85][1145-C]

Mathew Varghese v. M. Amritha Kumar and Others(2014) 5 SCC 610 : [2014] 2 SCR 736; Vasu P. Shettyv. Hotel Vandana Palace and Others (2014) 5 SCC 660B: [2014] 9 SCR 38; J. Rajiv Subramaniyan and Anotherv. Pandiyas and Others (2014) 5 SCC 651 : [2014] 3SCR 1140; Kalpesh P.C. Surana v. Indian Bank (2010)3 CTC 287; Dwarika Prasad v. State of Uttar Pradeshand Others (2018) 5 SCC 491 : [2018] 3 SCR 29;Shakeena and Anr. v. Bank of India & Ors. (2019) SCCCOnline SC 1059; Narandas Karsondas v. S.A. Kamtamand Another (1977) 3 SCC 247 : [1977] 2 SCR 341 –referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 5920-5923 of 2021.

From the Judgment and Order dated 18.11.2019 of the High Courtof Judicature at Madras in W.P. Nos.28034, 28036, 30710 and 30712 ofF2019.

K. V. Viswanathan, Sr. Adv., Vinodh Kanna B., Ravi Raghunath,Advs. for the Appellants.

Mrs. Anitha Shenoy, Sr. Adv., K. K. Mani, Ms. T. Archana, SajuGJakob, Ms. Rupali Sharma, Ms. Mili, Sadaf Wali, Devansh Gupta,Ms. Mayuri Raghuvanshi, Vyom Raghuvanshi, Ms. Purvat Wali, Ms.Aarti Kumar, Advs. for the Respondents.

The Judgment of the Court was delivered by

B. R. GAVAI, J.

1. Leave granted.

2. This case is a classic example as to how an ingenious litigant,by taking recourse to a series of proceedings one after the other, hasbeen successful in blocking the enforcement of a security interest, createdin favour of a secured creditor, thereby defeating the very purpose forwhich the Securitisation and Reconstruction of Financial Assets andEnforcement of Security Interest Act, 2002 (hereinafter referred to as‘the SARFAESI Act’) was enacted.

3. The present appeals challenge the common judgment and orderdated 18.11.2019 passed by the High Court of Judicature at Madras inWrit Petition Nos. 30710 and 30712 of 2019 filed by respondent No.1-N. Subhash Chand Jain herein (hereinafter referred to as ‘the auctionpurchaser’) and in Writ Petition Nos. 28034 and 28036 of 2019 filed bythe appellants herein, thereby disposing of all the four writ petitions.

4. The facts, in brief, giving rise to the present appeals are asunder:

Ace Concrete Private Limited (hereinafter referred to as ‘theborrower’) was a company engaged in the manufacture and sale ofready mixed concrete and related business activities.

The borrower had availed loans from respondent No.5 –IndianOverseas Bank (hereinafter referred to as ‘the respondent-Bank’). Theappellants and respondent Nos. 2 to 4 herein had mortgaged their fourproperties as collateral security and executed guarantee for the creditfacility granted to the borrower. As per the sanction of the respondent-Bank dated 30.3.2010, the respondent-Bank extended financial assistanceto the tune of Rs.21,14,00,000/- to the borrower. The guarantees, whichwere signed and executed by the appellants and respondent Nos. 2 to 4,were for an amount of Rs.22,74,74,000/-.

It appears that thereafter there was a transaction/Memorandumof Understanding between the borrower and one M/s. AKR HoldingsPrivate Limited (hereinafter referred to as ‘AKR Holdings’), as perwhich the entire share-capital of the borrower was to be transferred toAKR Holdings and the Management was also to be transferred in favourof AKR Holdings. As per the agreement, AKR Holdings was to take A

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Aover the entire liability of the borrower and also to get the four mortgagedproperties released to the appellants and respondent Nos. 2 to 4. It is,however, the contention of the appellants that the said AKR Holdings incollusion with the respondent-Bank sold all the assets of the borrowerhypothecated to the respondent-Bank and also did not get the mortgagedproperties released, as agreed. The borrower was, therefore, categorisedBas ‘Non-Performing Asset (NPA)’ on 1.4.2011.

The respondent-Bank on 23.5.2011 issued notice under Section13(2) of the SARFAESI Act for a liability of Rs.20,24,05,000/-. It is thecontention of the appellants that the respondent-Bank instead ofproceeding against the actual borrowers, i.e., the new Management,Cwho had taken over the control/management of the borrower, invokedits power mala fidely against the subsisting guarantors. As such, videreply dated 11.7.2011, the appellant Nos. 1 and 6, and respondent Nos. 3and 4 denied the claim of the respondent-Bank. According to theappellants, ignoring the same, on 25.8.2011, the respondent-Bank tookDsymbolic possession of all the four properties. The respondent-Bankissued a sale notice dated 21.1.2012 (First Sale Notice) in respect of allthe four mortgaged properties claiming a sum of Rs.23,39,54,702/- asoutstanding. The date of sale was scheduled to be 27.2.2012.

On 20.2.2012, the appellants and respondent Nos. 2 to 4 filed aESecuritisation Application being S.A. No.69 of 2012 before the DebtsRecovery Tribunal-III, Chennai (hereinafter referred to as ‘the DRT,Chennai’), thereby praying to quash the First Sale Notice dated 21.1.2012.The DRT, Chennai, vide order dated 27.2.2012 granted an interim stayrestraining the respondent-Bank from proceeding further with the FirstSale Notice dated 21.1.2012 for a period of 30 days. However, this wasFsubject to deposit of 50% of the outstanding amount within the saidperiod.

On 28.3.2012, a sum of Rs.12.25 crores was remitted to therespondent-Bank after sale of the mortgaged property at Item ‘B’ in theSchedule of Properties. The said sale was through a private treaty.GAccording to the appellants, they had already deposited an amount ofRs.50 lakh on 17.8.2011 and 23.8.2011, i.e., prior to the issuance of theFirst Sale Notice dated 21.1.2012.

Vide order dated 2.7.2012, the DRT, Chennai, dismissed S.A. No.69 of 2012 filed by the appellants and respondent Nos. 2 to 4.H

After the dismissal of S.A. No.69 of 2012, the respondent-Bankissued a fresh sale notice dated 9.7.2012 (Second Sale Notice) callingupon the appellants and respondent Nos. 2 to 4 to pay the revisedoutstanding amount of Rs.11,99,53,926/- within 10 days. The date ofsale for the remaining three mortgaged properties was scheduled to be20.7.2012.

Being aggrieved by the said Second Sale Notice dated 9.7.2012,the appellants and respondent Nos. 2 to 4 filed S.A. No.227 of 2012before the DRT, Chennai, thereby praying to quash the Second SaleNotice dated 9.7.2012, inter alia, on the ground that the auction/sale hasbeen fixed before the expiry of 30 days from the date of service ofSecond Sale Notice. There is some dispute with regard to the actualdate of filing of the said S.A.No.227 of 2012. However, for adjudicationof the present appeals, it is not necessary to go into the said aspect.

On 20.7.2012, the mortgaged properties at Item ‘A’ and Item ‘D’of the Schedule of Properties mentioned in the First Sale Notice dated21.1.2012 were sold for a sale consideration of Rs.4,86,21,000/- to theauction purchaser.

Vide interim order dated 24.7.2012, the DRT, Chennai, directedthe appellants and respondent Nos. 2 to 4 to deposit Rs. 1 crore to showtheir bona fides and granted a month’s time to procure prospectivepurchasers to clear the entire dues by selling the mortgaged properties.Accordingly, an amount of Rs.1 crore came to be deposited on 31.7.2012.

The claim of the appellants and respondent Nos. 2 to 4 before theDRT, Chennai, in S.A. No. 227 of 2012 came to be resisted by therespondent-Bank by filing a reply statement dated 2.8.2012.

The DRT, Chennai, passed an interim order dated 7.8.2012,thereby restraining the respondent-Bank from bringing the mortgagedproperties for sale pursuant to the Second Sale Notice dated 9.7.2012for a period of 30 days subject to deposit of Rs.4,80,00,000/- by theappellants and respondent Nos. 2 to 4 within the said period, failing whichthe said interim order dated 7.8.2012 was to stand vacated.

However, instead of complying with the said order, the guarantorsfiled an application being I.A. No.437 of 2012 in S.A. No.227 of 2012.By the said application, they sought a direction that the amount so directedto be deposited (i.e. Rs.4,80,00,000/-) by the DRT, Chennai, vide orderdated 7.8.2012, should be permitted to be deposited either in the A

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Apurchasers account or in separate suspense account in the IndianOverseas Bank, Kilpauk Branch. This was on the pretext of an ongoinginvestigation by the CBI with regard to some fraudulent activities of theOfficers of the respondent-Bank. The said I.A. No.437 of 2012 came tobe dismissed by the DRT, Chennai, on 12.9.2012. Vide the said orderdated 12.9.2012, the respondent-Bank was granted liberty to proceedBwith the sale and the main S.A. No.227 of 2012 was directed to beposted for final hearing on 20.9.2012

After the deposit of the balance sale consideration by the auctionpurchaser on 12.9.2012, a sale certificate came to be issued on 13.9.2012.CBeing aggrieved by the order passed by the DRT, Chennai, dated12.9.2012, Civil Revision Petition No.3487 of 2012 came to be filed beforethe High Court of Judicature at Madras. Another Civil Revision PetitionNo.3597 of 2012 came to be filed against the interim order passed bythe DRT, Chennai, dated 7.8.2012 in S.A. No. 227 of 2012 before theMadras High Court.D

During the pendency of the said Civil Revision Petitions beforethe Madras High Court, a Third Sale Notice dated 27.9.2012 was issuedby the respondent-Bank for recovery of a sum of Rs.6,76,07,054/-. Thedate of sale was scheduled to be 30.10.2012.

EVide various interim orders passed in the said Civil RevisionPetitions, the Madras High Court restrained the respondent-Bank andthe auction purchaser from taking physical possession of the mortgagedproperties. During the pendency of the said Civil Revision Petitions, asum of Rs.12 crore was paid to the respondent-Bank against the sale ofmortgaged property at Item ‘C’ of the Schedule of Properties in FirstFSale Notice dated 21.1.2012, owned by respondent No.3-ShanthiSivasamy.

Vide common order dated 29.7.2013, the High Court dismissedthe said Civil Revision Petitions. The appellants and respondent Nos. 2to 4 challenged the said order dated 29.7.2013 before this Court by filingGSpecial Leave Petition (Civil) Nos. 28402 and 28403 of 2013. This Courtvide order dated 7.7.2014 issued notice in the said Special Leave Petitionsconfined to the question as to whether any excess payment made by theappellants and respondent Nos. 2 to 4 was to be refunded by therespondent-Bank. This Court also directed the Debts Recovery AppellateTribunal, Chennai (hereinafter referred to as ‘the DRAT, Chennai’), toH

dispose of M.A.(S.A.) No.70 of 2014 expeditiously and preferably withina month’s time.

The said Special Leave Petition (Civil) Nos. 28402 and 28403 of2013 filed by the appellants and respondent Nos. 2 to 4 were permittedto be withdrawn by this Court vide order dated 17.4.2015. While grantingleave to withdraw, this Court observed that since the special leave petitionsare withdrawn, there will be no impediment for the Tribunal to pass finalorders.

It appears that in the meantime on 21.6.2013 since the appellantsand respondent Nos. 2 to 4 were unrepresented, the S.A. No.227 of2012 came to be dismissed in default by the DRT, Chennai. An applicationbeing M.A. No.112 of 2013 was preferred by the appellants andrespondent Nos. 2 to 4 to recall the said dismissal order dated 21.6.2013.The said application was rejected on 20.9.2013. The said order came tobe challenged by the appellants and respondent Nos. 2 to 4 before theHigh Court by filing C.R.P. PD. No.4410 of 2013. However, the saidC.R.P. PD. No.4410 of 2013 came to be dismissed by the High Courtvide order dated 3.12.2013 with liberty to the appellants and respondentNos. 2 to 4 to approach the DRAT, Chennai. It appears that the appellantsand respondent Nos. 2 to 4 approached the DRAT, Chennai, by filingM.A. (S.A.) No.70 of 2014. The DRAT, Chennai, vide order dated10.7.2014 allowed the said M.A. (S.A.) No.70 of 2014 and directed theDRT, Chennai, to restore S.A. No.227 of 2012 and dispose of the samein accordance with law as expeditiously as possible.

It also appears from the record that there were certainproceedings initiated at the instance of the auction purchaser praying fortransfer of the proceedings from the DRT-III, Chennai, which was seizedof S.A. No.227 of 2012, wherein the auction purchaser reached uptothe High Court, but could not succeed.

It appears from the record that in the meantime the thirdrespondent-Shanthi Sivasamy filed I.A. No.903 of 2016 in S.A. No.227of 2012 seeking refund of the excess amount of Rs.4.48 crore lying withthe respondent-Bank claiming that she was the owner of the mortgagedproperty situated at Chrompet, Chennai, that was sold and that the excessmoney lying with the respondent-Bank belonged to her.

The DRT, Chennai, vide order dated 25.6.2018, allowed S.A.No.227 of 2012 and set aside the Second Sale Notice dated 9.7.2012

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Aand consequent sale of the mortgaged properties and imposed cost ofRs.50,000/- on the respondent-Bank for wilfully violating the provisionsof law. Vide the said order dated 25.6.2018, the DRT, Chennai, directedthe respondent-Bank to refund the amounts paid by the auction purchaseralong with 10% interest per annum. It further directed the respondent-Bank to refund the surplus sum of Rs.4.48 crore to the third respondent-BShanthi Sivasamy with 10% interest per annum.

The aforesaid order dated 25.6.2018 passed by the DRT, Chennai,came to be challenged before the DRAT, Chennai, by the respondent-Bank as well as by the auction purchaser by filing appeals being R.A.(S.A.) No.143 of 2018 and R.A. (S.A.) No. 141 of 2018 respectively.C

Vide common order dated 6.9.2019, the DRAT, Chennai, allowedboth the appeals and set aside the order dated 25.6.2018 passed by theDRT, Chennai. It, however, maintained the direction of the DRT, Chennai,insofar as the payment of excess amount to the third respondent isconcerned.D

The said order dated 6.9.2019 passed by the DRAT, Chennai,came to be challenged by the appellants before the High Court by filingWrit Petition Nos. 28034 and 28036 of 2019. The auction purchaser alsochallenged the said order dated 6.9.2019 passed by the the DRAT,Chennai, before the High Court by filing Writ Petition Nos. 30710 andE30712 of 2019.

Vide the impugned common order dated 18.11.2019, all the fourwrit petitions were disposed of. Hence, the present appeals by way ofspecial leave.5. We have heard Shri K.V. Viswanathan, learned Senior CounselFappearing on behalf of the appellants, Ms. Anitha Shenoy, learned SeniorCounsel appearing on behalf of the respondent-Bank, Mr. K.K. Mani,learned counsel appearing on behalf of the auction purchaser andMr. Saju Jakob, learned counsel appearing on behalf of respondent No.3.

6. Shri K.V. Viswanathan, learned Senior Counsel appearing onGbehalf of the appellants, submitted that in the Second Sale Notice dated9.7.2012, the period given for paying revised outstanding dues was only10 days. Learned Senior Counsel submitted that the date fixed for auctionwas immediately on the next day, i.e., the 11[th] day. Learned Senior Counseltherefore submits that the said notice was in blatant breach of Rule 8(6)Hand Rule 9(1) of the Security Interest (Enforcement) Rules, 2002

(hereinafter referred to as ‘the said Rules’). It is submitted that the saidRules statutorily mandate that there must be 30 days’ time gap betweenthe date of notice and the date of sale of the immovable assets.

Relying on the judgment of this Court in the case of MathewVarghese v. M. Amritha Kumar and others[1], the learned Senior Counselsubmits that if the sale does not take place pursuant to a notice issuedunder Rules 8 and 9 of the said Rules, then the procedure prescribed bythe said Rules will have to be followed afresh, and a fresh notice of 30days’ period will have to be given.

Relying on the judgment of this Court in the case of Vasu P. Shettyv. Hotel Vandana Palace and others[2], Shri K.V. Viswanathan, learnedSenior Counsel, would submit that the sale, which is in breach of themandatory requirements imposed by the Rules, would be null and void.He submits that it has been held by this Court in the case of Vasu P.Shetty (supra) that the earlier attempts of the borrower to thwart thesale would not constitute a waiver, and the Bank could not be relievedfrom its obligation to follow the mandatory procedure contained in theRules. He further submits that this Court, in the case of J. RajivSubramaniyan and another v. Pandiyas and others[3], has reiteratedthe same legal position.

Learned Senior Counsel further submits that the respondent-Bankalso understood that even for a subsequent notice, a 30 days’ mandatoryperiod has to be provided inasmuch as in the First Sale Notice dated21.1.2012, and in the Third Sale Notice dated 27.9.2012, a period ofmore than one month has been provided. It is only with regard to theSecond Sale Notice dated 9.7.2012, a period of only 10 days has beenprovided. It is submitted that this has been done in haste and with a malafide intention.

Learned Senior Counsel would further submit that the contentionof the respondent-Bank that the Second Sale Notice dated 9.7.2012 is acontinuation of the First Sale Notice dated 21.1.2012 is totally erroneous.He submitted that the schedule of the properties in the First Sale Noticedated 21.1.2012 and in the Second Sale Notice dated 9.7.2012 is totallydifferent. Not only that, but the amount called upon to be paid is alsototally different.

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AShri Viswanathan further submits that the finding of all theAuthorities, i.e., the DRT, Chennai, the DRAT, Chennai, as well as theHigh Court, that the third respondent-Shanthi Sivasamy was entitled tothe excess amount is contrary to the record and the pleadings. Hesubmitted that the amount that was received, was received from thesale of all the four mortgaged properties of which two were sold throughBa private treaty and the remaining two were sold through an auctionsale. As such, the excess amount, which was generated, was on accountof the sale of all the four mortgaged properties and not only on accountof the sale of the mortgaged property of the respondent No.3. He furthersubmits that it was a consistent stand of the appellants as well as theCrespondent Nos. 2 to 4 that the said amount was required to be kept bythe respondent-Bank in an Escrow account so that in the event the auctionsale in respect of properties at Item ‘A’ and Item ‘D’ of the Schedule ofProperties in First Sale Notice dated 21.1.2012 is set aside, the amountcan be refunded to the auction purchaser with interest. It is, however,submitted that the said amount has, in an illegal manner, been permittedDto be withdrawn by the respondent No.3, along with interest accruedthereon.

Shri Viswanathan, learned Senior Counsel, further submits thatthe present appeals need to be allowed by quashing and setting aside thesale in respect of properties at Items ‘A’ and ‘D’ of the Schedule ofEProperties in the First Sale Notice dated 21.1.2012. He further submitsthat a direction needs to be issued to respondent No.3 to pay back theamount to the respondent-Bank, which should be directed to utilise thesaid amount to compensate the auction purchaser.

7. Ms. Anitha Shenoy, learned Senior Counsel appearing on behalfFof the respondent-Bank, submits that the Second Sale Notice dated9.7.2012 cannot be construed to be a fresh notice, but a continuation ofthe First Sale Notice dated 21.1.2012. Learned Senior Counsel submitsthat the Second Sale Notice dated 9.7.2012 was issued in line with thelaw laid down by the Division Bench of the Madras High Court in theGcase of Kalpesh P.C. Surana v. Indian Bank[4]. It is submitted that ithas been held in the case of Kalpesh P.C. Surana (supra) that though a30 days’ period is to be provided for auction sale in the First Notice,there is no requirement under the law to provide a 30 day’s clear periodin the subsequent notice. She further submits that though the DRT, H4 (2010) 3 CTC 287

Chennai, the DRAT, Chennai, and the High Court had granted severalopportunities to the appellants to make the payments, they have defaultedto do so. It is submitted that only in pursuance to the directions of theDRT, Chennai, dated 12.9.2012, the sale was completed in favour of theauction purchaser. Learned Senior Counsel therefore submits that sincethe respondent-Bank has always acted in compliance with the orderspassed by the Tribunals and the High Court, no fault could be attributedto the respondent-Bank.

8. Shri K.K. Mani, learned counsel appearing on behalf of therespondent No.1-the auction purchaser, submitted that on account ofthe litigation, though the auction purchaser has deposited the entire amountin the year 2012 itself, he is deprived of the benefit of the said sale.Learned counsel relying on the judgment of this Court in the case ofDwarika Prasad v. State of Uttar Pradesh and others[5], submittedthat though the appellants have lost before all the forums in severalrounds of litigation and that the auction purchaser by virtue of law is theowner of the properties since 2012 onwards, he is being deprived of thebenefit of the rent from the properties at Items ‘A’ and ‘D’ of the Scheduleof Properties in First Sale Notice dated 21.1.2012, which rent is beingreceived by the appellants. Learned counsel also relying on the judgmentof this Court in the case of Shakeena and Anr. v. Bank of India &Ors.[6], further submits that the role of the respondent-Bank in the presentcase also needs to be noted. He submits that though the respondent-Bank could very well have taken steps under Section 14 of theSARFAESI Act for recovery of physical possession, for last 9 years,the respondent-Bank has not taken any steps.

9. Shri Saju Jakob, learned counsel appearing for respondent No.3-Shanthi Sivasamy, submits that all the appellants are either Promoters/Directors or their direct relatives. He submits that respondent No.3 isnot directly related to any of the Promoters or Directors but is relatedonly through marriage of her daughter in one of the appellants’ family.He submits that the amount of Rs.12 crore received by the respondent-Bank was with regard to Third Sale Notice dated 27.9.2012, which wasonly with respect to the mortgaged property at Item ‘C’ in the Scheduleof Properties in First Sale Notice dated 21.1.2012 owned exclusively byher. He submits that since the said sale notice was for an amount of 5 (2018) 5 SCC 491

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ARs.6,76,07,054/-, the excess amount of Rs.4.48 crore was lying with therespondent-Bank in respect of sale of the said property. It is submittedthat the amount towards the First and Second Sale Notice was alreadyaccounted by the respondent-Bank through sale of the mortgagedproperties at Items ‘A’, ‘B’ and ‘D’ in the Schedule of Properties in theFirst Sale Notice dated 21.1.2012, which properties belonged either toBPromoters/Directors or their family members. Learned counsel submitsthat since the Third Sale Notice dated 27.9.2012 was only for an amountof Rs.6,76,07,054/- and in respect of the property owned by the respondentNo.3, there is no error in directing refund of the excess amount alongwith interest to the respondent No.3.C10. The sheet-anchor of the contentions made on behalf of theappellants is that even in case of Second Sale Notice dated 9.7.2012, amandatory period of 30 days has to be provided. It is therefore thesubmission on behalf of the appellants that since the Second Sale Noticedated 9.7.2012 does not provide for 30 days’ mandatory period andDprovides for a period of only 10 days, the said notice and the consequentsale is invalid in law. Heavy reliance has been placed on the judgment ofthis Court in the case of Mathew Varghese (supra).

11. This Court in the case of Mathew Varghese (supra) haselaborately considered the provisions of Section 13(1), 13(8), 35 and 37Eof the SARFAESI Act so also Rules 8 and 9 of the said Rules. We,therefore, do not wish to burden the present judgment by reproducing allthose provisions since they have already been reproduced and consideredin the case of Mathew Varghese (supra). We only refer to the relevantparagraphs, which are relied upon by the learned counsel for the parties.F12. Before adverting to the observations made by this Court inthe case of Mathew Varghese (supra), it will be relevant to note thefacts therein.

The first and second respondents therein stood as guarantors inrespect of a credit facility granted by the fourth respondent Bank thereinGin favour of a Company called ‘Jerry Merry Exports Pvt. Ltd.’. Asguarantors, they created an equitable mortgage in favour of the fourthrespondent Bank therein by depositing the title deeds of their property.When the transaction became a non-performing asset, the respondent-Bank issued notices under Section 13(2) and 13(4) of the SARFAESIAct. The guarantors filed a Securitisation Application (S.A.) No.20 ofH

2007 before the DRT, Ernakulam, challenging the possession notice issuedunder Section 13(4) of the SARFAESI Act. After issuance of noticesunder Section 13(2) and 13(4) of the SARFAESI Act, the respondent-Bank issued a notice on 14.8.2007 to the guarantors as well as others ofits intention to sell the property under Rule 8(6) of the said Rules byfixing a reserve price of Rs.1,25,00,000/-. On 23.8.2007, the respondent-Bank published its notice of sale of property in Indian Express andMathrubhoomi, inviting tenders-cum-auction from the public. Theguarantors vide notice dated 30.8.2007 were informed by the respondent-Bank about the publication made on 23.8.2007. In pursuance of the tendernotice, the appellant-Mathew Varghese and one M/s Kent Constructionsubmitted their tenders on 30.8.2007 and 1.9.2007 respectively. Theguarantors filed a writ petition being WP No.27182 of 2007 before theKerala High Court challenging the proceedings initiated under theSARFAESI Act. The said writ petition was disposed of by a learnedsingle judge of the Kerala High Court by order dated 20.9.2007. TheHigh Court after taking note of the Original Application (OA) filed bythe respondent-Bank as well as Securitisation Application (SA) filed bythe guarantors, directed the DRT to hear the parties and dispose of thecases without any delay. While disposing of the writ petition, the HighCourt also gave liberty to the parties to settle the liability and directedthe respondent-Bank to defer the sale posted on 25.9.2007 by six weeks.While doing so, the High Court imposed a condition on the guarantors todeposit a sum of Rs.10 lakh before the date of sale, i.e., 25.9.2007. Assuch, the sale, which was scheduled to be held on 25.9.2007, waspostponed. Even after the expiry of period of six weeks prescribed inthe order of the High Court dated 20.9.2007, the sale was not effected.It was the case of the guarantors that in pursuance of the order passedby the High Court, they had deposited a sum of Rs.10 lakh with therespondent-Bank. The said S.A. No.20 of 2007 came to be dismissedby the DRT vide order dated 27.12.2007. Immediately on the next day,i.e., 28.12.2007, the respondent-Bank accepted the tender of theappellant-Mathew Varghese and asked him to deposit 25% of the amounton that day itself, which was accordingly deposited. He was asked topay the balance amount within 15 days. Mathew Varghese depositedthe balance amount on 11.1.2008. After deposit of 25% of the bid amounton 31.12.2007 by Mathew Varghese, the fourth respondent-Bankconfirmed the sale in his favour and granted him further time of 15 daysfor depositing the balance amount.

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A13. It is only upon deposit of the balance amount by MathewVarghese on 11.1.2008 and the confirmation of the sale in his favour, thefourth respondent-Bank informed the guarantors on 2.2.2008 about theconfirmation of the sale in favour of Mathew Varghese and also thereceipt of the entire consideration. The respondent-Bank directed theguarantors to collect the balance amount available with it. As such, theBguarantors filed Review Petition in the Writ Petition, which was disposedof on 20.9.2007. The said review petition was dismissed on 12.2.2008giving liberty to the guarantors to challenge the sale. The guarantorsthereafter filed another Writ Petition being Writ Petition No.5876 of 2008on 18.2.2008, challenging the vires of the 2002 Rules. It was their specificCcase that the respondent-Bank had acted surreptitiously in selling theproperty without informing them. The said writ petition was dismissedby the learned single judge of the High Court by order dated 12.6.2009.Being aggrieved thereby, an appeal was carried before the Division Benchof the High Court. The Division Bench of the High Court took the viewthat the sale was not conducted in a fair and proper manner inasmuch asDwhen the sale was initially postponed by six weeks from 25.9.2007, therespondent-Bank ought to have renotified the sale or at least extendedthe time for receiving further tenders. The Division bench set aside thesale by imposing a condition that the guarantors furnish a demand draftof Rs.2,00,00,000/- from a local branch of a nationalized bank in favourEof Mathew Varghese and hand over the same to him within a period oftwo months from the date of the order. The Division Bench furtherdirected that if payment was not made, as directed, the sale in favour ofMathew Varghese would stand confirmed and the writ appeal wouldautomatically stand dismissed. There were further directions to the sub-Registrar with regard to restoration of the property etc.F

14. The guarantors did not make the payment within the said date,as directed by the Division Bench. Instead, an application was filed bythe guarantors, thereby seeking for further six weeks’ time to effect thepayment of Rs.2,00,00,000/- to Mathew Varghese. In the said application,the Division Bench passed an order dated 18.6.2010 extending the timeGperiod till 20.6.2010. It appears that the guarantors had agreed to sell theproperty in favour of Mr. Koshi Phillip. The High Court therefore by thesaid order dated 18.6.2010 directed said Mr. Koshi Phillip to deposit anamount of Rs.2,03,00,000/- before the respondent-Bank and furtherdirected that on such deposit being made, the sale made by the respondent-HBank in favour of Mathew Varghese stood cancelled and the respondent- Bank should effect the sale in favour of said Mr. Koshi Phillip. In thisbackground, Mathew Varghese had approached this Court.

15. It will be relevant to refer to the following observations of thisCourt in the case of Mathew Varghese (supra):

“29.1. A plain reading of sub-section (8) would show that aborrower can tender to the secured creditor the dues togetherwith all costs, charges and expenses incurred by the securedcreditor at any time before the date fixed for sale or transfer. Inthe event of such tender once made as stipulated in the saidprovision, the mandate is that the secured asset should not be soldor transferred by the secured creditor. It is further reinforced tothe effect that no further step should also be taken by the securedcreditor for transfer or sale of the secured asset. The contingencystipulated in the event of the tender being made by a debtor of thedues inclusive of the costs, charges, etc., would be that such tenderbeing made before the date fixed for sale or transfer, the securedcreditor should stop all further steps for effecting the sale ortransfer. That apart, no further step should also be taken fortransfer or sale.

29.2. When we analyse in depth the stipulations contained in thesaid sub-section (8), we find that there is a valuable right recognisedand asserted in favour of the borrower, who is the owner of thesecured asset and who is extended an opportunity to take all effortsto stop the sale or transfer till the last minute before which thesaid sale or transfer is to be effected. Having regard to such avaluable right of a debtor having been embedded in the said sub-section, it will have to be stated in uncontroverted terms that thesaid provision has been engrafted in the SARFAESI Act primarilywith a view to protect the rights of a borrower, inasmuch as, suchan ownership right is a constitutional right protected under Article300-A of the Constitution, which mandates that no person shall bedeprived of his property save by authority of law.

29.3. Therefore, dehors the extent of borrowing made andwhatever costs, charges were incurred by the secured creditor inrespect of such borrowings, when it comes to the question ofrealising the dues by bringing the property entrusted with thesecured creditor for sale to realise money advanced without A

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approaching any court or tribunal, the secured creditor asa TRUSTEE cannot deal with the said property in any manner it likesand can be disposed of only in the manner prescribed inthe SARFAESI Act.

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29.4. Therefore, the creditor should ensure that the borrower wasclearly put on notice of the date and time by which either the saleor transfer will be effected in order to provide the requiredopportunity to the borrower to take all possible steps for retrievinghis property or at least ensure that in the process of sale the securedasset derives the maximum benefit and the secured creditor oranyone on its behalf is not allowed to exploit the situation of theborrower by virtue of the proceedings initiated underthe 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 theproperty without approaching the court or Tribunal.

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30. Therefore, by virtue of the stipulations contained under theprovisions of the SARFAESI Act, in particular, Section 13(8), anysale or transfer of a secured asset, cannot take place without dulyinforming the borrower of the time and date of such sale or transferin order to enable the borrower to tender the dues of the securedcreditor with all costs, charges and expenses and any such sale ortransfer effected without complying with the said statutoryrequirement would be a constitutional violation and nullify theultimate sale.

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31. Once the said legal position is ascertained, the statutoryprescription contained in Rules 8 and 9 have also got to beFexamined as the said Rules prescribe as to the procedure to befollowed by a secured creditor while resorting to a sale after theissuance of the proceedings under Sections 13(1) to (4) ofthe SARFAESI Act. Under Rule 9(1), it is prescribed that no sale ofan immovable property under the Rules should take place beforethe expiry of 30 days from the date on which the public notice ofGsale is published in the newspapers as referred to in the proviso tosub-rule (6) of Rule 8 or notice of sale has been served to theborrower. Sub-rule (6) of Rule 8 again states that the authorisedofficer should serve to the borrower a notice of 30 days for thesale of the immovable secured assets. Reading sub-rule (6) ofRule 8 and sub-rule (1) of Rule 9 together, the service of individual H

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notice to the borrower, specifying clear 30 days’ time-gap foreffecting any sale of immovable secured asset is a statutorymandate. It is also stipulated that no sale should be affected beforethe expiry of 30 days from the date on which the public notice ofsale is published in the newspapers. Therefore, the requirementunder Rule 8(6) and Rule 9(1) contemplates a clear 30 days’individual notice to the borrower and also a public notice by wayof publication in the newspapers. In other words, while thepublication in newspaper should provide for 30 days’ clear notice,since Rule 9(1) also states that such notice of sale is to be inaccordance with the proviso to sub-rule (6) of Rule 8, 30 days’clear notice to the borrower should also be ensured as stipulatedunder 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 bein 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 newspaperpublication, one of which should be in “vernacular language” withsufficient circulation in the locality by setting out the terms of thesale. While setting out the terms of the sale, it should contain thedescription of the immovable property to be sold, the knownencumbrances of the secured creditor, the secured debt for whichthe property is to be sold, the reserve price below which the salecannot be effected, the time and place of public auction or thetime after which sale by any other mode would be completed, thedeposit of earnest money to be made and any other details whichthe authorised officer considers material for a purchaser to knowin order to judge the nature and value of the property.

33. Such a detailed procedure while resorting to a sale of animmovable secured asset is prescribed under Rules 8 and 9(1). Inour 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 thestipulation contained in Section 13(8) read along with Rules 8(6)and 9(1), the owner/borrower should have clear notice of 30 daysbefore the date and time when the sale or transfer of the securedasset would be made, as that alone would enable the owner/borrower to take all efforts to retain his or her ownership by AB

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Atendering the dues of the secured creditor before that date andtime.

33.2. Secondly, when such a secured asset of an immovableproperty is brought for sale, the intending purchasers should knowthe nature of the property, the extent of liability pertaining to theBsaid property, any other encumbrances pertaining to the saidproperty, the minimum price below which one cannot make a bidand the total liability of the borrower to the secured creditor. Since,the proviso to sub-rule (6) also mentions that any other materialaspect should also be made known when effecting the publication,it would only mean that the intending purchaser should have entireCdetails about the property brought for sale in order to rule out anypossibility of the bidders later on to express ignorance about thefactors connected with the asset in question.

33.3. Be that as it may, the paramount objective is to providesufficient time and opportunity to the borrower to take all effortsDto safeguard his right of ownership either by tendering the dues tothe creditor before the date and time of the sale or transfer, orensure that the secured asset derives the maximum price and noone is allowed to exploit the vulnerable situation in which theborrower is placed.”

E16. It could thus be seen that this Court has held that the creditorshould ensure that the borrower was clearly put on notice of the dateand time by which either the sale or transfer will be effected in order toprovide the required opportunity to the borrower to take all possible stepsfor retrieving his property or at least to ensure that in the process of sale,Fthe secured asset derives the maximum benefit, and that the securedcreditor or anyone on its behalf, is not allowed to exploit the situation ofthe borrower. This Court held that Rule 9(1) of the said Rules prescribedthat no sale of an immovable property under the said Rules should takeplace before the expiry of 30 days from the date on which the publicnotice of sale was published in the newspapers or notice of sale hasGbeen served to the borrower. This Court further held that the expression“or” in Rule 9(1) should be read as “and” and as such there should beclear notice of 30 days between the notice of sale to the borrower soalso the publication in the newspaper and the actual date of sale. ThisCourt held that this would serve twin purpose. Firstly, the owner/borrowerHshould have clear notice of 30 days before the date and time when the sale or transfer of the secured asset would be made inasmuch as, thatwould enable the owner/borrower to take all efforts to retain his or herownership by tendering the dues of the secured creditor before that dateand time. Secondly, when such a secured asset of an immovable propertyis brought for sale, the intending purchasers should know the nature ofthe property, the extent of liability pertaining to the said property, anyother encumbrances pertaining to the said property, the minimum pricebelow which one cannot make a bid and the total liability of the borrowerto the secured creditor. This Court further held that the purpose of theRule is to ensure that the secured asset derives the maximum price, andno one is allowed to exploit the vulnerable situation in which the borroweris placed.

17. After referring to the judgment of this Court in the case ofNarandas Karsondas v. S.A. Kamtam and another[7], this Court in thecase of Mathew Varghese (supra) observed thus:

“38. On a reading of the above paragraphs, we are able to discernthe ratio to the effect that a mere conferment of power to sellwithout intervention of the court in the mortgage deed by itselfwill not deprive the mortgagor of his right to redemption, that theextinction of the right of redemption has to be subsequent to thedeed conferring such power, that the right of redemption is notextinguished at the expiry of the period, that the equity ofredemption is not extinguished by mere contract for sale and thatthe mortgagor’s right to redeem will survive until there has beencompletion of sale by the mortgagee by a registered deed. Theratio is also to the effect that the power to sell should not beexercised unless and until notice in writing requiring payment ofthe principal money has been served on the mortgagor. The aboveproposition of law of course was laid down by this Courtin Narandas Karsondas [(1977) 3 SCC 247] while construingSection 60 of the TP Act. But as rightly contended by Mr ShyamDivan, we fail to note any distinction to be drawn while applyingthe abovesaid principles, even in respect of the sale of securedassets created by way of a secured interest in favour of the securedcreditor under the provisions of the SARFAESI Act, read along withthe relevant Rules. We say so, inasmuch as, we find that evenwhile setting out the principles in respect of the redemption of a A

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mortgage by applying Section 60 of the TP Act, this Court hasenvisaged the situation where such mortgage deed providing forresorting to the sale of the mortgage property without theintervention of the Court. Keeping the said situation in mind, itwas held that the right of redemption will not get extinguishedmerely at the expiry of the period mentioned in the mortgage deed.It was also stated that the equity of redemption is not extinguishedby mere contract for sale and the most important and vital principlestated was that the mortgagor’s right to redeem will survive untilthere has been completion of sale by the mortgagee by a registereddeed. The completion of sale, it is stated, can be held to be sounless and until notice in writing requiring payment of the principalmoney has been served on the mortgagor. Therefore, it was heldthat until the sale is complete by registration of sale, the mortgagordoes not lose the right of redemption. It was also made clear thatit was erroneous to suggest that the mortgagee would be actingas the agent of the mortgagor in selling the property.

39. When we apply the above principles stated with reference toSection 60 of the TP Act in respect of a secured interest in asecured asset in favour of the secured creditor under the provisionsof the SARFAESI Act and the relevant Rules applicable, underSection 13(1), a free hand is given to a secured creditor to resortto 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 fullright to redeem the property by tendering all the dues to the securedcreditor at any time before the date fixed for sale or transfer.Under sub-section (8) of Section 13, as noted earlier, the securedasset should not be sold or transferred by the secured creditorwhen such tender is made by the borrower at the last momentbefore the sale or transfer. The said sub-section also states thatno further step should be taken by the secured creditor for transferor sale of that secured asset. We find no reason to state that theprinciples laid down with reference to Section 60 of the TP Act,which is general in nature in respect of all mortgages, can haveno application in respect of a secured interest in a secured assetcreated in favour of a secured creditor, as all the abovestatedprinciples apply on all fours in respect of a transaction as betweenthe debtor and secured creditor under the provisions ofthe SARFAESI Act.”

18. It could thus be seen that this Court observed that the equityof redemption is not extinguished by mere contract for sale and that themortgagor’s right to redeem will survive until there has been completionof sale by the mortgagee by a registered deed. This Court furtherobserved that applying the principles stated with reference to Section 60of the Transfer of Property Act in respect of a secured interest in asecured asset in favour of the secured creditor under the provisions ofthe SARFAESI Act and the relevant Rules applicable, a free hand isgiven to a secured creditor to resort to a sale without the intervention ofthe court or tribunal. It has, however, been held that under Section 13(8),it is clearly stipulated that the mortgagor, i.e., the borrower, who isotherwise called as a debtor, retains his full right to redeem the propertyby tendering all the dues to the secured creditor at any time before thedate fixed for sale or transfer. This Court further held that if the tenderis made by the borrower at the last moment before the sale or transfer,the secured asset should not be sold or transferred by the secured creditor.This Court held that there was no reason as to why the general principlelaid down by this Court in the case of Narandas Karsondas (supra)with reference to Section 60 of the Transfer of Property Act could nothave application in respect of a secured interest in a secured asset createdin favour of a secured creditor. It has been held that the said principleswill apply on all fours in respect of a transaction as between the debtorand secured creditor under the provisions of the SARFAESI Act.

19. The most relevant observation of this Court could be found inparagraph 53 of the judgment in the case of Mathew Varghese (supra),which reads thus:

“53. We, therefore, hold that unless and until a clear 30 days’notice is given to the borrower, no sale or transfer can be resortedto by a secured creditor. In the event of any such sale properlynotified after giving 30 days’ clear notice to the borrowerdid not take place as scheduled for reasons which cannotbe solely attributable to the borrower, the secured creditorcannot effect the sale or transfer of the secured asset onany subsequent date by relying upon the notification issuedearlier. In other words, once the sale does not take placepursuant to a notice issued under Rules 8 and 9, read alongwith Section 13(8) for which the entire blame cannot bethrown on the borrower, it is imperative that for effecting AB

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Athe sale, the procedure prescribed above will have to befollowed afresh, as the notice issued earlier would lapse. Inthat respect, the only other provision to be noted is sub-rule (8) ofRule 8 as per which sale by any method other than public auctionor public tender can be on such terms as may be settled betweenthe parties in writing. As far as sub-rule (8) is concerned, theBparties referred to can only relate to the secured creditor and theborrower. It is, therefore, imperative that for the sale to be effectedunder Section 13(8), the procedure prescribed under Rule 8 readalong with Rule 9(1) has to be necessarily followed, inasmuch asthat is the prescription of the law for effecting the sale as hasCbeen explained in detail by us in the earlier paragraphs by referringto Sections 13(1), 13(8) and 37, read along with Section 29 andRule 15. In our considered view any other construction will bedoing violence to the provisions of the SARFAESI Act, in particularSections 13(1) and (8) of the said Act.”

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20. This Court, in unequivocal terms, held that unless and until aclear 30 days’ notice is given to the borrower, no sale or transfer can beresorted to by a secured creditor. It further held that in the event of anysuch sale properly notified after giving a 30 days’ clear notice to theEborrower did not take place as scheduled for reasons, which cannot besolely attributable to the borrower, the secured creditor cannot effectthe sale or transfer of the secured asset on any subsequent date byrelying upon the notification issued earlier. This Court held that once thesale does not take place pursuant to a notice issued under Rules 8 and 9,read with Section 13(8) for which the entire blame cannot be thrown onFthe borrower, it is imperative that for effecting the sale, the procedureprescribed will have to be followed afresh.

21. In the light of these observations, we have to consider thefactual position in the present matter.

22. It is not in dispute that an equitable mortgage in favour of therespondent-Bank guaranteeing the loan taken by the borrower was inrespect of four properties. The chart showing the schedule of properties,the owners (as mentioned in the First Sale Notice dated 21.1.2012) andthe mode of sale is as under:

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S. KARTHIK & ORS. v. N. SUBHASH CHAND JAIN & ORS.

[B. R. GAVAI, J. ]

“SALE NOTICE DT. 21.01.2012 -SCHEDULE OF PROPERTIES

23. It can thus be seen that the properties at Items ‘B’ and ‘C’ inthe Schedule of Properties in First Sale Notice dated 21.1.2012 havebeen sold through a private treaty, and as such, the said sales are notimpugned in the present appeals. It is only the properties at Items ‘A’and ‘D’ in the Schedule of Properties in First Sale Notice dated 21.1.2012,which have been sold consequent to Second Sale Notice dated 9.7.2012by public auction in favour of the auction purchaser, are impugned. Wewill therefore have to examine the correctness of the submission thatsince the Second Sale Notice dated 9.7.2012 provided for a period ofonly 10 days, the auction sale held on 20.7.2012 is vitiated in view of thelaw laid down by this Court in the case of Mathew Varghese (supra).For that, it will be necessary to refer to various orders passed by theTribunals as well as the High Court.

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24. It is not in dispute that the First Sale Notice dated 21.1.2012notifying auction sale on 27.2.2012 was for recovery of Rs.23,39,54,702/- and in respect of all the four scheduled properties at Items ‘A’, ‘B’, ‘C’and ‘D’. It is also not in dispute that the First Sale Notice dated 21.1.2012provided for a clear period of 30 days’ notice.

A

B25. It is pertinent to note that immediately after the First SaleNotice was issued on 21.1.2012, a Securitisation Application being S.A.No. 69 of 2012 under Section 17(1) of the SARFAESI Act came to befiled before the DRT, Chennai, by the appellants and respondent Nos. 2to 4. It will be relevant to refer to the interim order passed by DRT,Chennai, on 27.2.2012 in S.A. No. 69 of 2012, which reads thus:C

“4. The Ld. Counsel for the applicant submitted that he can sellthe property within 15 days and make substantial payment (entiresale consideration) with the bank within 15 days and the balanceamount due to the bank will be settled within one month. If aninterim injunction is not granted at this juncture, it will causeDirreparable injury to the applicants.

5. Hence in the interest of justice interim stay is granted for aperiod of 30 days restraining the respondent bank from proceedingfurther pursuant to the sale notice dated 21.01.2012 subject todeposit of 50% of the outstanding amount within the period. ForEcompliance call on 29.03.2012.”

26. It could thus be seen that the counsel for the applicants therein,i.e., the appellants and the respondent Nos. 2 to 4 herein submitted thatthe applicants could sell the property within 15 days and make substantialpayment, i.e., the entire sale consideration with the respondent-BankFwithin 15 days, and the balance amount due to the respondent-Bank willbe settled within one month. Acting on the said statement made by theappellants and respondent Nos. 2 to 4, the DRT, Chennai, granted interimstay for a period of 30 days restraining the respondent-Bank fromproceeding further pursuant to the First Sale Notice dated 21.1.2012.GHowever, this was subject to deposit of 50% of the outstanding amountwithin the said period. The matter was kept for compliance on 29.3.2012.

27. It is not in dispute that during the pendency of the said S.A.No.69 of 2012, an amount of Rs.12.25 crore, which was received fromthe sale of mortgaged property at Item ‘B’ through a private treaty on28.3.2012, was remitted to the respondent-Bank. It is the furtherH

contention of the appellants that they had also deposited a sum of Rs.50lakh with the respondent-Bank prior to the receipt of First Sale Noticedated 21.1.2012, and as such, an amount of Rs.12.75 crore was alreadypaid to the respondent-Bank.

28. When the said S.A. No.69 of 2012 came up for final hearingbefore the DRT, Chennai, on 2.7.2012, the DRT, Chennai, made thefollowing observation:

“As I said earlier, the impugned Sale Notice was published in twodailies namely, New Sunday Express and Dinamani on 22.1.2012.The applicants have no case that these dailies have no widecirculation in the locality. It is also evident that Sale Notice wasproperly served to the borrower. It is evident that there is clearnotice of 30 days from the date on which public notice of sale ispublished in newspapers. Therefore, there is no violation of sub-rule (1) of Rule 9 as contended. Hence I could not find any meritin the contention raised by the Ld. Counsel for the applicants.”

29. With these observations, S.A. No.69 of 2012 came to bedismissed by the DRT, Chennai, vide order dated 2.7.2012.

30. After the said S.A. No. 69 of 2012 was dismissed, therespondent-Bank issued a fresh notice on 9.7.2012 (Second Sale Notice),thereby informing the guarantors that an amount of Rs. 11,99,53,926/-was due to the respondent-Bank. It was therefore informed that sale ofthe mortgaged properties at Items ‘A’, ‘C’ and ‘D’ in the Schedule ofProperties in the First Sale Notice dated 21.1.2012 will be held on20.7.2012. The Schedule of Properties in the Second Sale Notice dated9.7.2012 consisted of three properties out of four properties mentionedin the earlier notice dated 21.1.2012 (First Sale Notice) excluding theproperty mentioned at item ‘B’ in the First Sale Notice, which was soldby a private treaty on 28.3.2012.

31. The second round of litigation starts with S.A. No.227 of 2012.It is the contention of the appellants that the guarantors had immediatelychallenged the Second Sale Notice dated 9.7.2012 before the DRT,Chennai, by filing S.A. No.227 of 2012 on 18.7.2012. However, on accountof some technical difficulties, S.A. No.227 of 2012 could be first heardon 24.7.2012. On 24.7.2012, the DRT, Chennai, passed the followingorder in S.A. No.227 of 2012:

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1128SUPREME COURT REPORTS

A“Advanced. Both parties present. Heard. Petitioner agreed todeposit Rs.1 crore within 2.8.2012 to show their bonafides. Theywant breathing time to procure prospective purchaser to clear theentire dues within one month from today by selling the remainingproperty. They want one month time since it is Aady month, nosale would be taken place. Hence for compliance, call on 2.8.2012.”B

32. It could thus be seen that the guarantors represented to theDRT, Chennai, that they want some breathing time to procure prospectivepurchaser and that they would clear the entire dues of the respondent-Bank within one month from that day by selling the remaining property.

C33. The matter thereafter came up for hearing on 7.8.2012 onwhich date the DRT, Chennai, passed the following interim order:

“8. The applicants have made out a strong case and the balanceof convenience is also in their favour. Therefore, interim injunctionis granted for 30 days restraining the Authorised Officer ofDrespondent bank from brining the properties described in theSchedule for sale consequent upon the impugned Auction SaleNotice dated 9.7.2012, subject to deposit of Rs.4,80,00,000/-(Rupees Four Crores Eighty Lakhs only) with the respondent bankwithin the period, failing which this order will stand vacated.”

34. Perusal of the aforesaid interim order would reveal that anEinterim injunction was granted for a period of 30 days restraining theAuthorised Officer of the respondent-Bank from bringing the propertiesdescribed in the Schedule for sale consequent upon the impugned SaleNotice dated 9.7.2012. This was made subject to deposit ofRs.4,80,00,000/- with the respondent-Bank within the said period. It was,Fhowever, clarified that failing the same, the interim order would standvacated. The matter was kept for compliance on 10.9.2012.

35. However, instead of complying with the said order, theguarantors filed an application being I.A. No.437 of 2012 in S.A. No.227of 2012. By the said application, they sought a direction that the amountGso directed to be deposited (i.e. Rs.4,80,00,000/-) by the DRT, Chennai,vide order dated 7.8.2012, should be permitted to be deposited either inthe purchasers account or in separate suspense account in the IndianOverseas Bank, Kilpauk Branch. This was on the pretext of an ongoinginvestigation by the CBI with regard to some fraudulent activities of theOfficers of the respondent-Bank. The said I.A. No.437 of 2012 came toH

be dismissed by the DRT, Chennai, on 12.9.2012. Vide the said orderdated 12.9.2012, the respondent-Bank was granted liberty to proceedwith the sale and the main S.A. No.227 of 2012 was directed to beposted for final hearing on 20.9.2012.

36. The orders passed by the DRT, Chennai, dated 7.8.2012 and12.9.2012 came to be challenged by the appellants and respondent Nos.2 to 4 before the High Court of Judicature at Madras by way of CivilRevision Petitions being C.R.P No.3597 of 2012 and C.R.P. No.3487 of2012 respectively. On 9.11.2012, the Madras High Court passed thefollowing order in the said Civil Revision Petitions:

“2. Considering the submissions made by the learned senior counselfor the petitioners that the Petitioners are prepared to pay entiredues to the Bank including the amount deposited by the auctionpurchaser, without prejudice to their other contentions, and takinginto account the fact that the ultimate beneficiary in the Bank inview of the offer of the Petitioners to make the entire payment,we restrain the bank and the auction purchaser from taking physicalpossession of the properties from the Petitioners and their tenants,until further orders.”

37. It could thus be seen that again a representation was made tothe Division Bench of the High Court that the appellants were preparedto pay entire dues to the respondent-Bank including the amount depositedby the auction purchaser, without prejudice to their other contentions.Acting on the said representation, the Division Bench of the High Courtgranted interim protection to the appellants.

38. It appears that in the meantime since the property at Item ‘C’belonging to respondent No.3 could not be sold in pursuance of the earliersale notices, a third notice dated 27.9.2012 was issued in respect ofproperty at Item ‘C’. It further appears that in the said Civil Revisionproceedings, the Division Bench of the Madras High Court was informedabout the said sale notice and the appellants again made a representationthat they were willing to make payment of the entire amount. It will berelevant to refer to the following part of the order passed by the DivisionBench of the Madras High Court dated 15.11.2012 in the Civil Revisionproceedings:

“5. Taking into consideration the affidavit filed by the Petitionersagreeing to pay the entire amount within 90 days and part payment A

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of Rs.4,80,00,000/- within 45 days and also in view of the submissionmade by the Bank that there would be no bidders in casepermission is not granted to confirm the bid, we stay the auctionscheduled to be held on Friday 16 November 2012.”

A

39. When the Civil Revision Petitions were listed on 8.1.2013,Bthe Division Bench of the Madras High Court passed the following order:

“2. The learned senior counsel for the petitioners submitted that,the petitioners have now identified a purchaser by name RedbrickRealtors Private Limited and they have agreed to purchase theproperty at Old No.99, New No.51, Anna Salai, Nagalkeni, PammalCVillage, Chromepet, Chennai-44 (Item No.4) for a totalconsideration of Rs.12 crores. The prospective purchaser hastaken a demand draft for a sum of Rs.75 lakh in the name ofrespondent Bank. Even though the prospective purchaser hasagreed to settle the remaining amount within a period of sixtydays, during the course of submission, the representative of theDprospective purchaser sought 90 days time to pay the remainingamount. The prospective purchaser agreed to file an affidavitindicating that a sum of Rs.6 crore will be paid on or before28.3.2013 and the balance amount will be paid on or before26.4.2013.

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… … …

5. The Director, Redbrick Realtors Private Limited, is directed tofile an affidavit indicating that a sum of Rs.6 crores would be paidby 26 March 2013 and the balance of Rs.5.25 crore would bepaid on or before 26 April 2013. The affidavit should contain aFclear undertaking that in case of failure to adhere to the time limit,the purchase has no objection for forfeiting the amount of Rs.75lakhs.”

40. On, 22.1.2013, the Division Bench passed the following order:

“2. Pursuant to our earlier orders dated 8.1.2013 and 11.1.2013,Gthe Bank is permitted to appropriate the amount of Rs.75 lakhstowards the loan account of M/s Ace Concrete Pvt. Ltd. Similarly,the amount of Rs.6 crore payable by the prospective purchaser,as per our earlier order dated 8.1.2013 shall be paid to the loanaccount of M/s Ace Concrete Pvt. Ltd. On such payment, theHBank is permitted to appropriate the said amount.”

41. It appears that during the pendency of the proceedings beforethe High Court, the mortgaged property at Item ‘C’ was sold by a privatetreaty, and an amount of Rs. 9 crore was paid by the purchaserM/s. Redbrick Realtors Private Limited on different dates. It is also thecontention of the appellants that an amount of Rs.3 crore was depositedon 2.4.2013 by late Shri C. Surendran in compliance of the undertakinggiven to the High Court.

42. When the said Civil Revision Petitions came up for hearing on30.4.2013, a grievance was made on behalf of the auction purchaserthat even after issuance of sale certificate, he was not able to enjoy thefruits of the sale. It was also contended that the guarantors were collectinghuge amount of rent of more than Rs.4 lakh, and though the auctionpurchaser was the owner of the property, he was deprived of the same.It will be relevant to refer to the following observations of the DivisionBench in the said order dated 30.4.2013 passed in the Civil RevisionPetitions:

“….According to him, even after issuance of sale certificate, asearly as on 30.09.2012, they are not able to enjoy the fruits of thesale. Further, according Petitions, if the petitioner is allowed tocollect rent from the premises in question, they have to facehardship in getting back the rent collected by the petitioner duringthe pendency of the Civil Revision Petitions. In view of this, weare of the opinion that ends of justice will be met by directing thepetitioners to deposit the amount collected by way of rent beforethe Debt Recovery Tribunal No.III, Chennai.

2. Consequently, the petitioner is directed to deposit the amountcollected by way of rent before the Debt Recovery Tribunal No.III,Chennai.”

43. It will be further relevant to note that it was sought to beurged on behalf of the respondent-Bank that balance amount of Rs.4.48crore was lying with the respondent-Bank. However, the EPF and ESIauthorities were pressuring to make payment to them. The Division Benchof the High Court vide order dated 30.4.2013 therefore directed thatstatus quo be maintained with regard to the said amount.

44. The said Civil Revision Petitions were finally heard anddismissed by the Division Bench of the High Court on 29.7.2013. Whiledismissing the said Civil Revision Petitions, the Division Bench of theHigh Court observed thus:

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A“10. Under such circumstances, after the confirmation of saleand after the issue of sale certificate, when that issue is not beforethis Court, certainly, we cannot entertain the request of the learnedSenior Counsel appearing for the petitioners to set aside the sale.Further, as pointed out earlier, with regard to the orders which areunder challenge in these Civil Revision Petitions, no infirmity hasBbeen brought to the notice, of this Court. Consequently, both theCivil Revision Petitions are dismissed. Connected MiscellaneousPetitions are closed.

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Further, this Court is constrained to impose costs ofRs. 5,000/- on the petitioners, payable to the Chief Justice ReliefCfund, far the reason that, though, from the very beginning of theargument, it was brought to the notice of the learned Senior Counselappearing for the petitioners that this Court cannot entertain anysubmission regarding the, alleged irregularity or illegality in thesale effected and this Court cannot set aside the sale also in theDabsence of any challenge to the same, this Court has beenpressurized by the learned Senior Counsel appearing for thepetitioners to grant the relief of setting aside the sale ,and by this,in the considered opinion of this Court, the time of this Court hasbeen wasted, Whatever be the length of time consumed inadvancing arguments with regard to the relief sought in the CivilERevision Petitions, certainly, arguments have to be heard by thisCourt, But, arguments at length cannot be allowed for a reliefwhich is not sought in these Civil Revision Petitions.”

45. It could thus be seen that the Division Bench of the HighCourt also imposed costs of Rs.5,000/- on the petitioners therein as itFwas of the view that the learned counsel for the petitioners therein hadexceeded in his limit while arguing the matter.

46. Litigation did not stop right there, rather it came upto thisCourt by way of Special Leave Petition (Civil) Nos. 28402 and 28403 of2013. This Court vide order dated 7.7.2014 in the said Special LeaveGPetitions, passed the following order:

“Issue notice confined to the question as to whether any excesspayment made by the petitioners is to be refunded by the bank.We also direct the Debts Recovery Appellate Tribunal to disposeof the appeal, M.A. (S.A.) No.70/2014, expeditiously preferablyHwithin a month’s time.”

47. It could thus be seen that this Court had issued notice confinedonly to the question as to whether any excess payment made by thepetitioners therein was to be refunded by the respondent-Bank. ThisCourt also directed the DRAT, Chennai to dispose of the appeal, M.A.(S.A.) No.70/2014, expeditiously preferably within a month’s time.

48. The said Special Leave Petitions subsequently were permittedto be withdrawn by this Court vide order dated 17.4.2015, which readsthus:

“The special leave petitions are permitted to be withdrawn.

Since, the special leave petitions are withdrawn, there is noimpediment for the Tribunal to pass final orders.”

49. It appears that in the meantime on 21.6.2013 since theappellants and respondent Nos. 2 to 4 were unrepresented, the S.A.No.227 of 2012 came to be dismissed in default by the DRT, Chennai.An application being M.A. No.112 of 2013 was preferred by theappellants and respondent Nos. 2 to 4 to recall the said dismissal orderdated 21.6.2013. The said application was rejected by the DRT, Chennai,vide order dated 20.9.2013. The said order came to be challenged by theappellants and respondent Nos. 2 to 4 before the High Court by filingC.R.P. No.4410 of 2013. However, the said C.R.P. No.4410 of 2013came to be disposed of by the High Court with liberty to the appellantsand respondent Nos. 2 to 4 to approach the DRAT, Chennai. It furtherappears that the appellants and the respondent Nos. 2 to 4 approachedthe DRAT, Chennai, by filing M.A. (S.A.) No.70 of 2014. The DRAT,Chennai, vide order dated 10.7.2014 allowed the said M.A. (S.A.) No.70of 2014 and directed the DRT, Chennai, to restore S.A. No.227 of 2012and dispose of the same in accordance with law as expeditiously aspossible.

50. It also appears from the record that there were certainproceedings initiated at the instance of the auction purchaser praying fortransfer of the proceedings from the DRT-III, Chennai, which was seizedof S.A. No.227 of 2012, which reached upto the High Court, whereinthe auction purchaser could not succeed.

51. It appears from the record that in the meantime the thirdrespondent-Shanthi Sivasamy filed I.A. No.903 of 2016 in S.A. No.227of 2012 seeking refund of the excess amount of Rs.4.48 crore lying withthe respondent-Bank claiming that she was the owner of the mortgaged A

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Aproperty situated at Chrompet, Chennai, that was sold and that the excessmoney lying with the respondent-Bank belonged to her.

52. The third round of litigation begins with the order passed byDRT, Chennai, dated 25.6.2018 in S.A. No.227 of 2012 in pursuance ofthe order of the DRAT, Chennai, dated 10.7.2014 restoring S.A. No.227Bof 2012. The relevant paragraphs of the order dated 25.6.2018 passedby the DRT, Chennai, in S.A. No.227 of 2012 read thus:

“10.8 From the perusal of records and written submissions filedby all the parties, It is evident that the first respondent bank didnot follow the procedure as far as the subject impugned sale noticeCis concerned as warranted under law and it is settled principle oflaw that every notice of sale shall have a distinct cause of actionand hence requires the statutory compliance of Rule 9(1) of theSecurity Interest (Enforcement) Rules, 2002, which mandatesissuance of 30 days clear notice to the borrowers before initiatingthe process of sale. As the respondent bank has failed to adhereDto the same, the sale notice dated 9.7.2012 scheduling the sale on20.7.2012 is riddled with infirmity and hence is liable to be setaside. Accordingly, owing to infirmities the sale notice dated9.7.2012 is set aside, Consequent to which, the sale purported tohave been conducted and confirmed in favour of the secondErespondent over Item ‘A’ and ‘C’ schedule properties is also setaside.

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Point 8 (III)

11.0 In the result SA No. 227/2012 is allowed setting aside thesale notice’ dated 9.7.2012 and the consequent sale of Item ‘A’Fand ‘C’ schedule properties of the subject impugned sale noticewith costs of Rs.· 50,000 /- payable by the 1st respondent bank tothe appellant for willfully violating the provisions of law andcontinuing their allegation on the same ground for several yearswithout conceding to their defect and correcting themselves atGthe first opportune time, This fact is evident, when the samerespondent bank, in the same matter, had got issued yet anothersale notice trying to bring the Item ‘B’ schedule mentioned propertyof the subject impugned sale notice by a sale notice dated 27.9.2012scheduling the sale to 30.10.2012, which concludes that the firstrespondent bank is very much aware of the compliance ofHprovisions of law, but had willfully, exhibited their disrespect for the same, owing to which imposition of costs is necessitated as adeterrent and not to repeat the same.

11. l Further, in view of the foregoing, the First Respondent bankis directed to refund the amounts as received from the2[nd] respondent/auction purchaser together with interest @ 10%p.a. (simple) from the respective dates of receipt till the date ofpayment in full.

11.2 The further facts of the case is that during the pendency ofthese proceedings, the appellants had augmented funds to the tuneof Rs. 5,23,92,946/- and remitted the same. Both parties viz., theappellants and the 1[st] respondent bank had filed their calculationmemos into this Tribunal, where under it has been commonlyconceded to and accepted that a sum of Rs. 4,48,00,000/- beingthe surplus sale proceeds of ‘B’ schedule property is lying withthe bank from the date of deposit by the auction purchaser ofitem ‘B’ schedule property, which was sold pursuant to the salenotice dated 27.09.2012 scheduling the auction sale to 30.10.2012,and which sale was never challenged and thus attained finality.Therefore, the 1[st] respondent bank is directed to refund the saidsum of Rs. 4,48,00,000/- (sic however, a sum of Rs. 4,46 crores isclaimed by the 4[th] appellant in IA No. 903/2013) to the 4[th] appellantherein, who is the owner/mortgagor of the said Item ‘B’ scheduleproperty since that is the property which has been sold forrecovering the overdue amounts after adjusting the payments madeby the appellants, together with subsequent interest @ 10% p.a.(simple) from the date of receipt till the date of actual payment bythe 1[st] respondent bank.”

53. It could thus be seen that the DRT, Chennai, came to theconclusion that the notice dated 9.7.2012, scheduling the sale on20.7.2012, was contrary to the provisions as contained in Rule 9(1) ofthe said Rules, and as such, was liable to be set aside. Consequently, thesale purported to have been conducted and confirmed in favour of theauction purchaser over Item ‘A’ and Item ‘C’ properties in the Scheduleof Properties in Second Sale Notice dated 9.7.2012 was also set aside.Vide the said order dated 25.6.2018, the DRT, Chennai, directed therespondent-Bank to refund the amounts as received from the auctionpurchaser together with interest at the rate of 10% per annum. TheDRT, Chennai, also directed the respondent-Bank to refund sum of AB

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ARs.4.48 crore with interest at the rate of 10% per annum to respondentNo.3, who was the owner and mortgagor of the property sold pursuantto the notice dated 27.9.2012. While allowing S.A. No. 227 of 2012, theDRT, Chennai, had also imposed costs of Rs.50,000/- on the respondent-Bank.

B54. Being aggrieved thereby, the auction purchaser as well as therespondent-Bank approached the DRAT, Chennai, by filing R.A. (S.A.)No.141 of 2018 and R.A. (S.A.) No.143 of 2018 respectively. Videcommon order dated 6.9.2019, the DRAT, Chennai, allowed the saidappeals. The DRAT, Chennai, reversed the order of the DRT, Chennai,dated 25.6.2018 insofar as setting aside the sale and imposition of costsCis concerned. However, insofar as direction to pay amount of Rs.4.48crore with interest at the rate of 10% per annum to respondent No.3 isconcerned, the same was maintained.

55. Being aggrieved thereby, four writ petitions were filed beforethe Madras High Court; two writ petitions being Writ Petition Nos. 28034Dand 28036 of 2019 were filed by the appellants and two writ petitionsbeing Writ Petition Nos. 30710 and 30712 of 2019 were filed by theauction purchaser. The writ petitions filed by the auction purchaser waswith limited grievance that though he had purchased the properties, hewas deprived of the rent realised therefrom since 2012 onwards, andEtherefore, either the borrowers or the respondent-Bank should be directedto pay him the rent realized from the properties purchased by him in theyear 2012 or in the alternative, to set aside the auction and refund theamount deposited by him with interest. Insofar as the present appellantsare concerned, they were aggrieved by the finding of the DRAT, Chennai,reversing the order passed by the DRT, Chennai, setting aside the sale.F

56. It will be relevant to note that this Court in the case of MathewVarghese (supra) itself has held that in the event of any such sale properlynotified after giving a 30 days’ clear notice to the borrower does nottake place as scheduled for the reasons, which are not solely attributableto the borrower, then the secured creditor cannot effect the sale and heGwill have to initiate the procedure de novo. Therefore, the question, thatwill have to be considered, is, as to whether the sale, which was notifiedas per the notice dated 21.1.2012, could not take place on the datescheduled in the said notice for the reasons, which are solely attributableto the guarantors or not.

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57. It could be seen that immediately after the notice was issuedon 21.1.2012, the guarantors approached the DRT, Chennai, by way ofS.A. No.69 of 2012. The guarantors gave an impression to the DRT,Chennai, that they can sell the property within 15 days and make thepayment of the entire consideration within 15 days, and that the balanceamount could be settled within one month. Acting on the representationof the guarantors, the DRT, Chennai, vide order dated 27.2.2012 grantedinterim stay for a period of 30 days, restraining the respondent-Bankfrom proceeding further, pursuant to the sale notice dated 21.1.2012.However, this was subject to deposit of 50% of the outstanding amountwithin the said period. It could thus be seen that the sale as per thenotice dated 21.1.2012, which was scheduled to take place on 27.2.2012,could not take place on the scheduled date on account of interim orderspassed by the DRT, Chennai, which were passed on the representationof the guarantors.

58. It is not in dispute that notice dated 21.1.2012 clearly provideda 30 days’ period as prescribed in the said Rules. It is also not in disputethat as per the representation made to the DRT, Chennai, on 27.2.2012,the appellants did not settle the entire amount within a period of onemonth. It appears that S.A. No.69 of 2012 was pending till 2.7.2012 andit came to be dismissed on the said date, i.e., 2.7.2012. In the meanwhile,the appellants had sold the property at Item ‘B’ in the Schedule ofProperties in the First Sale Notice dated 21.1.2012 through a privatetreaty for an amount of Rs.12.25 crore, and the said amount was depositedwith the respondent-Bank. However, it is not in dispute that the entireclaim of the respondent-Bank was not satisfied till 2.7.2012 on whichdate the DRT, Chennai, dismissed S.A. No.69 of 2012.

59. After dismissal of S.A. No.69 of 2012 on 2.7.2012 by theDRT, Chennai, a fresh notice dated 9.7.2012 (Second Sale Notice) cameto be issued by the respondent-Bank to the appellants. In the said notice,the Schedule of Properties was the same as that in the First Sale Noticedated 21.1.2012, except the property at Item ‘B’, which was sold througha private treaty. Therefore, in the Second Sale Notice dated 9.7.2012,the property at Item ‘C’ became Item ‘B’ and the property at Item ‘D’became Item ‘C’. The amount claimed in the Second Sale Notice dated9.7.2012 was Rs.11,99,53,926/-, i.e., the amount claimed in the First SaleNotice dated 21.1.2012 minus the amount realized from the sale ofproperty at Item ‘B’ through a private treaty.

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A60. It could thus be seen that the Second Sale Notice dated 9.7.2012was in continuation of the proceedings of the First Sale Notice dated21.1.2012, which sale could not be effected only on account of the interimorders passed by the DRT, Chennai, on the representation made by theappellants and respondent Nos. 2 to 4. It could further be seen that evenin view of the law laid down by this Court in the case of MathewBVarghese (supra), since the sale scheduled on 27.2.2012, as per theFirst Sale Notice dated 21.1.2012, could not be held due to the reasonsattributable solely to the guarantors, there was no necessity of againfollowing the same procedure of providing a 30 days’ clear notice. Inany case, the respondent-Bank issued a fresh Second Sale Notice onC9.7.2012 to the appellants, scheduling the sale on 20.7.2012. There is asubstantial distinction of facts in the present case as compared to thosein the case of Mathew Varghese (supra). In the case of MathewVarghese (supra) after the dismissal of S.A., the respondent-Bank hadsurreptitiously accepted the tender of the auction purchaser on the verynext day of dismissal of S.A. without issuing a notice to the guarantors/Dborrowers and also confirmed the sale, and only after the confirmationof sale and receipt of the entire amount, informed the borrowers/guarantors about the sale being confirmed. It is not the case here. In thepresent case, after the S.A. was dismissed on 2.7.2012, the respondent-Bank again issued a fresh Notice on 9.7.2012 scheduling the sale onE20.7.2012.61. The facts in the case of Mathew Varghese (supra) are alsodistinguishable inasmuch as though between the date of publication ofnotice in the newspapers and the date scheduled for sale, a clear 30days’ period was provided, but insofar as the individual notice to theFborrowers/guarantors and the date scheduled for sale, a 30 days’ clearperiod was not provided. And this was with regard to the very firstnotice. On the aforesaid premise, this Court in the case of MathewVarghese (supra) held that the word ‘or’ used in Rule 9 of the saidRules will have to be read as ‘and’, and that there should be a clear 30

days’ period between the date of publication of notice in the newspapersGas well as individual notice to the borrower/guarantor and the datescheduled for sale. Clearly, in the present case, there has been compliancewith the same, insofar as the first notice is concerned, whereas in thecase of Mathew Varghese (supra), there was no 30 days’ period betweenindividual notice and the date of sale.H

62. The matter does not rest at that. Immediately after the SecondSale Notice dated 9.7.2012 is issued, the appellants along with respondentNos. 2 to 4 filed S.A. No.227 of 2012 challenging the notice dated9.7.2012. There is some dispute between the parties with regard to thedate on which the said S.A. No.227 of 2012 was filed. However, in thelight of the view that we are taking, the same would not be relevant.

63. When the matter (S.A. No.227 of 2012) came up for hearingbefore the DRT, Chennai, on 24.7.2012, a representation was made bythe appellants to the DRT, Chennai, that they wanted some breathingtime to procure prospective purchaser to clear the entire dues withinone month from the said date by selling the remaining property. The saidS.A. No.227 of 2012 thereafter came up for hearing before the DRT,Chennai, on 7.8.2012. On the said date, the DRT, Chennai, passed anorder of interim injunction for a period of 30 days restraining therespondent-Bank from giving effect to the sale notice dated 9.7.2012subject to deposit of Rs.4.80 crore within the said period of 30 days.The said order dated 7.8.2012 also made it clear that on failure to makesuch payment, the said order would stand vacated.

64. It is not in dispute that in pursuance of the said order dated7.8.2012, the appellants have not deposited the amount of Rs.4.80 crorewithin 30 days. It is to be noted that the order dated 7.8.2012 was self-operative. On failure on the part of the appellants to deposit the amountof Rs.4.80 crore prior to 7.9.2012, the interim injunction stoodautomatically vacated. It could thus be seen that even on this occasion,the appellants had an opportunity for redemption of the mortgage andclearing their properties from encumbrances. However, the appellants,even during this period, did not avail of the said opportunity.

65. It is to be noted that in the meanwhile, the auction purchaserhad bid for the properties at Items ‘A’ and ‘C’ in the Schedule of Propertiesin the Second Sale Notice dated 9.7.2012 (i.e. the properties at Items‘A’ and ‘D’ in the Schedule of Properties in the First Sale Notice dated21.1.2012). In the said sale, which was held on 20.7.2012, the auctionpurchaser was the successful bidder having bid for Rs.1,45,66,000/- andRs.3,40,55,000/- respectively, in all totaling to Rs.4,86,21,000/-. Uponpayment of the entire amount, the sale was confirmed on 21.7.2012.Not only that, the sale was duly registered on 14.9.2012 after the auctionpurchaser had spent a sum of Rs.38,89,880/- towards the registrationcharges. It is to be noted that the appellants instead of complying with AB

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Athe directions, had filed I.A. No.437 of 2012 in S.A. No.227 of 2012seeking certain directions with regard to deposit of the amount in someother account. The DRT, Chennai, vide order dated 12.9.2012, dismissedthe said I.A. No.437 of 2012, and thereby, granted liberty to the respondent-Bank to proceed with the sale. It is only thereafter, that the sale came tobe registered in favour of the auction purchaser on 14.9.2012. It is, thus,Bclear that the sale came to be registered in favour of the auction purchaserin view of the liberty granted by the DRT, Chennai, in its order dated12.9.2012.

66. Even thereafter, the guarantors continued with their effort toprolong the proceedings. Various orders came to be passed in the CivilCRevision Petitions, which we have already referred to hereinabove. Inone of the orders passed by the High Court, i.e., the order dated 30.4.2013,the appellants were also directed to deposit the amount collected byway of rent before the DRT, Chennai. Finally, finding that after theconfirmation of sale and after the issuance of the sale certificate, theDCourt could not interfere, the said Civil Revision Petitions came to bedismissed on 29.7.2013.

67. Being aggrieved thereby, the appellants approached this Courtby way of Special Leave Petition (Civil) Nos. 28402 and 28403 of 2013,wherein this Court issued notice vide order dated 7.7.2014. The saidESpecial Leave Petitions subsequently were permitted to be withdrawnby this Court vide order dated 17.4.2015. However, in view of theobservations made by this Court in its order dated 7.7.2014, the M.A.No.70 of 2014, which was filed before the DRAT, Chennai, challengingthe order of the DRT, Chennai dated 20.9.2013 refusing to restore theS.A. No.227 of 2012, which was dismissed in default, was heard onF10.7.2014 and the S.A. No.227 of 2012 was restored to the file. Asalready pointed out hereinabove, the said S.A. No.227 of 2012 wasallowed by the DRT, Chennai, vide order dated 25.6.2018, which orderwas reversed by the DRAT, Chennai, vide order dated 6.9.2019, and theorder of the DRAT, Chennai, dated 6.9.2019 was maintained by theGHigh Court vide the impugned judgment and order dated 18.11.2019.

68. It could thus be seen that the appellants had more than oneopportunity for redemption of the mortgage. However, from their conduct,it appears that they were only interested in protracting the litigation. It isthe appellants at whose intervention and on whose incorrectHrepresentation, the sale, which was scheduled to be held on 27.2.2012 in

pursuance of the notice dated 21.1.2012, could not be held. Even afterthe dismissal of S.A. No.69 of 2012 on 2.7.2012, the respondent-Bankagain issued a Second Sale Notice on 9.7.2012 scheduling the sale on20.7.2012 in which the auction purchaser emerged as a successful bidder.It is thus clear that the appellants had enough time from 21.1.2012 till2.7.2012 for redemption of their mortgaged properties. However, theydid not avail of that opportunity. Even after the auction purchaser emergedsuccessful in the bid and had paid the bid money, an opportunity wasgiven by the DRT, Chennai, vide order dated 7.8.2012, to the appellantsto deposit the amount of Rs.4.80 crore within one month. However,without complying with the same, the appellants continued with theirdilatory tactics by filing an application being I.A. No.437 of 2012 in S.A.No.227 of 2012. Even thereafter, they continued with the proceedingsbefore the High Court, wherein certain interim orders were passed, andfinally, the High Court, finding that in view of the sale being confirmedand the sale being registered no interference could be warranted,dismissed the Civil Revision Petitions. Thereafter again, they approachedthis Court by way of Special Leave Petitions, which were subsequentlywithdrawn. Ideally, the litigation ought to have stopped at least at thatstage.

69. However, after the M.A. No.70 of 2014 was allowed and theS.A. No.227 of 2012 was restored, it gave fresh lease to the litigation,wherein the S.A. No.227 of 2012 was allowed by the DRT, Chennai.The order of the DRT, Chennai, was reversed by the DRAT, Chennai,which was in turn upheld by the High Court vide the impugned judgment.

70. As we have already discussed hereinabove, the facts in thecase of Mathew Varghese (supra) and the facts in the present case aretotally different. In any case, in view of the observations made inparagraph 53 of the judgment of this Court in the case of MathewVarghese (supra), we are of the view that since the sale scheduled on27.2.2012 in pursuance to the notice dated 21.1.2012 could not be heldon account of the reasons solely attributable to the appellants/guarantors,there was no necessity to provide 30 days’ period in the Second SaleNotice dated 9.7.2012, which was in continuation of the First Sale Noticedated 21.1.2012.

71. Insofar as the reliance placed on the judgment of this Court inthe case of J. Rajiv Subramaniyan (supra) is concerned, the saidjudgment relies on the judgment of this Court in the case of Mathew A

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AVarghese (supra). However, on facts, the issue in the said case wasdifferent. In the said case, the property was sold by the respondent-Bank through a private treaty. This Court found that there were no termssettled in writing between the borrowers and the Bank that the sale canbe effected by a private treaty, and as such, it was in violation of theprovisions of Rule 8 (8) of the said Rules.B

72. In the case of Vasu P. Shetty (supra), after the first noticewas issued, the same was challenged before the High Court. Thoughthe High Court did not grant stay against the scheduled auction, it grantedstay against the confirmation of sale. It was the Bank’s case therein thatin view of the partial stay order by the High Court, nobody came forwardCto participate in the auction and the exercise went into futility. Afterdismissal of the writ petition, it came to the notice of the Bank that therewere other encumbrances on the property, which required the reserveprice to be changed. Thereafter, there were proposals exchanged betweenthe Bank and the borrower with regard to One Time Settlement (‘OTS’).DOn failure to arrive at OTS, a fresh notice came to be issued. In the saidnotice, the mandatory period of 30 days from the date of publication wasnot provided. The matter was proceeded in this background.

73. The present case is totally on different facts. Though theappellants had ample opportunities for redemption of mortgage, theyEfailed to avail of the said opportunities.

74. Even if viewed from another angle, the claim of the appellantsis not sustainable. The two-judges Bench of this Court in the case ofMathew Varghese (supra), has heavily relied on the judgment of thethree-judges Bench of this Court in the case of Narandas KarsondasF(supra). It has been held by this Court in the case of Narandas Karsondas(supra), that the right of redemption, which is embodied in Section 60 ofthe Transfer of Property Act, is available to the mortgagor unless it hasbeen extinguished by the act of parties. It has been held, that only onexecution of the conveyance and registration of transfer of themortgagor’s interest by registered instrument, that the mortgagor’s rightGof redemption will be extinguished. In the present case, the DRT, Chennai,vide order dated 12.9.2012, had granted liberty to the respondent-Bankto proceed with the sale. The sale came to be registered in favour of theauction purchaser on 14.9.2012. As such, in any case, the mortgagor’sright of redemption stood extinguished on 14.9.2012. The Division BenchHof the Madras High Court had, therefore, rightly dismissed the Civil Revision Petitions, vide order dated 29.7.2013. The said order of theMadras High Court dated 29.7.2013 came to be challenged before thisCourt by way of Special Leave Petitions. This Court, vide order dated7.7.2014, had issued limited notice in the said Special Leave Petitions.However, vide order dated 17.4.2015, the said Special Leave Petitionscame to be dismissed as withdrawn. It is in the third round of litigation,that the DRT, Chennai, allowed the S.A. No.227 of 2012, vide orderdated 25.6.2018. Applying the law, as laid in the case of NarandasKarsondas (supra) and in the case of Mathew Varghese (supra), theorder passed by the DRT, Chennai, dated 25.6.2018, was not sustainableinsofar as setting aside the sale notice dated 9.7.2012 and the consequentsale. The DRAT, Chennai, has rightly reversed the same, which hasbeen upheld by the High Court vide the impugned judgment.

75. It is further relevant to note that, this Court in the case ofDwarika Prasad (supra) and in the case of Shakeena (supra) heldthat the right to redemption stands extinguished on the sale certificategetting registered.

76. We will have to take into consideration the purpose with whichthe SARFAESI Act came to be enacted. Unlike international banks, thebanks and financial institutions in India did not have power to takepossession of securities and sell them. It was, therefore, noticed, that ithad resulted in slow pace of recovery of defaulting loans and mountinglevels of non-performing assets of banks and financial institutions. Itwas also noticed that there were certain areas in which the banking andfinancial sector did not have a level playing field as compared to otherparticipants in the financial markets in the world. It was further noticedthat the existing legal framework relating to commercial transactionshad not kept pace with the changing commercial practices and financialsector reforms. As such, the SARFAESI Act was enacted with thepurpose for securitization and empowering banks and financial institutionsto take possession of the securities and to sell them without the interventionof the Court.

77. If we look at the facts in the present case, it would show that,every attempt has been made to frustrate the purpose of the SARFAESIAct. The respondent-Bank was required to indulge in three rounds oflitigations, out of which, the two have reached upto this Court.

78. Though the auction purchaser emerged as the successful bidder,in the bids held on 20.7.2012, and though the sale was confirmed on A

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A21.7.2012, and though the sale has been registered in his favour on14.9.2012, for a period of last 9 years, he could not enjoy the fruits of thesaid sale. Not only that, but the appellants continued to enjoy the rent ofthe properties, the ownership of which vests in the auction purchaser.

79. In that view of the matter, we do not find any merit insofar asBthe challenge to the notice dated 9.7.2012 is concerned.

80. That leaves us with the other issue raised by Shri K.V.Viswanathan, learned Senior Counsel. Shri Viswanathan submitted thatthe amount received by the respondent-Bank was on account of sale ofall the four properties mentioned in the First Sale Notice dated 21.1.2012,Cand as such, the direction to pay an amount of Rs.4.48 crore with interestonly to respondent No.3 is not sustainable.

81. We find no merit in this submission. The property at Item ‘B’of the Schedule of Properties in First Sale Notice dated 21.1.2012 wassold through a private treaty during the pendency of the first round ofDlitigation. The properties at Item ‘A’ and Item ‘D’ of the Schedule ofProperties in First Sale Notice dated 21.1.2012 came to be sold inpursuance of the sale taken place on 20.7.2012, which was in pursuanceof the Second Sale Notice dated 9.7.2012. As such, the only propertyleft was the property at Item ‘C’ belonging to the respondent No.3 inrespect of which a third notice dated 27.9.2012 came to be issued. It isEonly in pursuance of the said notice dated 27.9.2012, that the property atItem ‘C’ was sold by a private treaty to M/s. Redbrick Realtors PrivateLimited. As such, the excess amount, which remained with therespondent-Bank, has rightly been directed to be paid to respondent No.3by the DRT, Chennai, which has been concurrently upheld by the DRAT,FChennai, as well as the High Court.

82. Even on equitable grounds, rest of the guarantors are eitherthe Promoters/Directors or their family members, it is only the respondentNo.3, who happens to be outside the family and is only connected onaccount of her daughter being married in the family of one of theGPromoters/Directors. As such, on equitable grounds, we do not find anyreason to interfere with the said direction.

83. The appeals are therefore found to be without merit, and assuch, are dismissed with costs. The appellants shall pay the costsquantified at Rs.1,00,000/- (Rupees One lakh only) payable each to therespondent-Bank and the auction purchaser. Pending applications, if any,Hshall also stand disposed of.

84. While dismissing the appeals, taking into consideration thefact that, though the auction purchaser has become the owner of theproperties at Items ‘A’ and ‘D’ of the Schedule of Properties in the FirstSale Notice dated 21.1.2012, he could not enjoy the fruits of the same,and that the appellants have continued to enjoy the rent of the properties,we find that this is a fit case wherein the powers under Article 142 ofthe Constitution of India need to be invoked.

85. We, therefore, direct the appellants to handover the vacantand peaceful possession of the properties at Items ‘A’ and ‘D’ of theSchedule of Properties in the First Sale Notice dated 21.1.2012, within aperiod of 8 weeks from the date of this judgment to the auction purchaser.We further direct the appellants to pay the rent, received by them, fromthe said properties, since 15.9.2012 till date, within a period of threemonths from the date of this judgment. However, in the facts of thiscase, we do not intend to pass any orders with regard to interest on thesaid amount.

Ankit Gyan

Appeals dismissed.

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