[2014] 2 S.C.R. 736 A MATHEW VARGHESE v. M. AMRITHA KUMAR & ORS. (Civil Appeal Nos. 1927-1929 of 2014) FEBRUARY 10, 2014 B [A.K. PATNAIK AND FAKKIR MOHAMED IBRAHIM KALIFULLA, JJ.] SEGUR/TISA T/ON AND RECONSTRUCT/ON OF C FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002: s.13(1) - Held: Any secured creditor may be entitled to enforce the secured asset created in its favour on its own without resorting to any court proceedings or approaching the0 Tribunal, however, such enforcement should be in conformity with the other provisions of the SARFAESI Act.

s.13(8) - Right of borrower - Held: There is a valuable right recognized and asserted in favour of the borrower, who E is the owner of the secured asset and who is extended an opportunity to take all efforts to stop the sale or transfer till the last minute before which the said sale or transfer is to be effected - Such an ownership right is a Constitutional Right protected under Article 300A of the Constitution, which F mandates that no person shall be deprived of his property save by authority of law - Therefore, de hors, the extent of borrowing made and whatever costs, charges were incurred by the secured creditor in respect of such borrowings, when it comes to the question of realizing the dues by bringing the G property entrusted with the secured creditor for sale to realize money advanced without approaching any Court or Tribunal, the secured creditor as a trustee cannot deal with the said property in any manner it likes and property. can be disposed of only in the manner prescribed in the SARFAESI Act -H 736 MATHEW VARGHESE v. M. AMRITHA KUMAR & 737 ORS.

Therefore, the creditor should ensure that the borrower was A clearly put on notice of the date and time by which either the sale or transfer will be effected in order to provide the required opportunity to the borrower to take all possible steps for retrieving his property or at least ensure that in the process of sale the secured asset derives the maximum benefit and B the secured creditor or anyone on its behalf is not allowed to exploit the situation of the borrower by virtue of the proceedings initiated under the SARFAESI Act - Constitution of India, 1950 - Article 300A. s.13(8) - Conflict with r.15(1) of Income Tax Rules, 1962 C - Held: r. 15 of the Income Tax Rules, 1962 does not in any way conflict with either s.13(8) of the SARFAESI Act or rr.8 and 9 of the Security Interest (Enforcement) Rules, 2002 - The sub-rule (1) of r. 15 only deals, with the discretion of the Tax. Recovery Officer to adjourn the sale by recording his reasons· D for such adjournment - As far as sub-rule (2) is concerned, the same is clear to the effect that a sale of immovable property once adjourned under sub-rule (1) for a longer period than one calendar month, a fresh proclamation of sale should be made unless the defaulter consents to waive it - The said E sub-rule also does not conflict with any of the provisions of the SARFAESI Act, in particular s.13 or rr.8 and 9.

s.35 - Non obstante clause - Held: s.35 states that the provisions of the SARFAESI Act will have overriding effect F notwithstanding anything inconsistent contained in any other law for the time being in force - Therefore, reading s.35 and s.37 together, it will have to be held that in the event of any of the provisions of RDDB Act not being inconsistent with the provisions of the SARFAESI Act, the application of both the G Acts, namely, SARFAESI Act and RDDB Act, would be complementary to each other - The effect of s.37 would, therefore, be that in addition to the provisions contained under the SARFAESI Act, in respect of proceedings initiated under the said Act, it will be in order for a party to fall back upon the H 738 SUPREME COURT REPORTS [2014] 2 S.C.R. A provisions of the other Acts mentioned in s.37 namely, the Companies Act, 1956, the Securities Contract& (Regulation) Act, 1956, the Securities and Exchange Board of India Act, 1992, the Recovery of Debts Due to Banks and Finances Institutions Act, 1993, or any other law for the time being in B forc.e - Recovery of Debts Due to Banks and Finances Institutions Act, 1993. SECURITY INTEREST (ENFORCEMENT) RULES, 2002:

C rr.8 and 9 - Procedure to be followed by a secured creditor while resorting to a sale after the issuance of the proceedings u/ss.13(1) to (4) of the SARFAESI Act - Held: Reading sub-rule (6) of r.8 and sub-rule (1) of r.9 together, the service of individual notice to the borrower, specifying clear D 30 days time gap for effecting any sale of immovable secured asset is a statutory mandate - No sale should be affected before the expiry of 30 days from the date on which the public notice of sale is published in the newspapers -Therefore, the requirement u/r.8(6) and r.9(1) contemplates E a clear 30 days individual notice to the borrower and also a public notice by way of publication in the newspapers. rr.8 and 9 - Sale effected in favour of appellant without complying with the mandatory requirement of 30 days notice to the borrower - High Court set aside the sale and passed F interim order directing the borrower to furnish demand draft of Rs.2 crores in favour of appellant and in case of non-payment directed to confirm sale in favour of appellant -Payment not made by borrowers - Request by borrowers for six weeks time to arrange money - By another interim order, G High Court extended time and permitted 8th respondent to deposit Rs.2.03 crores and on such deposit to cancel sale in favour of appellant - Held: Since very valuable rights of the appellant were at stakes, there was no justification at all for High Court to interfere with the said right in such a casual H manner by passing interim orders on flimsy grounds raised MATHEW VARGHESE v. M. AMRITHA KUMAR & 739

ORS. by borrowers - Ownership right which accrued in favour bf A appellant ought not to have been interfered with by the High Court - Interim orders set aside - Value of the property was knocked out in favour of the appellant for Rs. 1. 27 crores -Since proper procedure for effecting sale was not followed, the price fetched through the appellant cannot be held to be the B correct price for the mortgaged property - In the year 2010 the property could fetch Rs.2.03 crores while the price paid by the appellant was Rs.1.27 crores - Therefore, after giving credit of Rs.1.27 crores, the appellant directed to pay a further sum of Rs. 76 lacs to the borrowers. c Respondents no.1 and 2 stood guarantors in respect of credit facility for Rs.30 lacs granted by the 4th respondent bank and created an equitable mortgage in favour of bank by depositing the title deeds of their property. The transaction became non performing asset D and the respondent bank filed recovery suit. The respondent bank also issued a notice under Section 13(2) of SARFAESI Act for Rs. 77 lacs. The respondents no.1 and 2 filed a Securitisation Application before the ORT challenging the possession notice issued by E respondent bank and also restraining the bank from evicting them. The attempts for one time settlement between them failed and the bank withdrew its offer of OTS of Rs.55 lacs.

F On 14.8.2007, the 4th respondent bank issued a notice to Respondents no.1 and 2 of its intention to sell the property under Rule 8(6) of the Security. Interest (Enforcement) Rules, 2002 by fixing reserve price of Rs.1.25 crores. The notice was issued in two newspapers G inviting tenders-cum-auction from public. The appellant and one M/s KC submitted their tenders. Respondents no.1 and 2 filed a writ petition before the High Court. The single judge of the High Court disposed of the writ petition directing ORT to hear the H 740 SUPREME COURT REPORTS [2014] 2 S.C.R.

A parties and dispose of cases without delay and directed respondent bank to defer the sale posted on 25.9.2007 by six weeks by imposing condition on respondents no.1 and 2 to deposit Rs.10 lacs before the date of sale. On 27.12.2007, the ORT dismissed the Securitisation Application. On 28.12.2007, the 4th Respondent-Bank9 accepted the tender of Rs.1.27 crores offered by the appellant and asked the appellant to deposit 25% of the amount on that day itself and pay the balance amount within 15 days. The appellant complied with it. The C respondent bank confirmed the sale in favour of the appellant. Respondents no.1 and 2 were informed about the confirmation of sale and were directed to collect the balance amount available with the 4th Respondent-Bank. Respondents no.1 and 2 filed a writ petition challenging the vires of the Rules, 2002 on the ground that it violated D their right of redemption by denying them adequate opportunity and time to repay the borrowed sum and the action of the Bank in having acted surreptitiously in selling the property without informing them. The said writ petition was dismissed by the single judge on the ground E that the Respondents no.1 and 2 got an alternative efficacious remedy available under the SARFAESI Act. Respondents no.1 and 2 filed writ appeal. In the meantime, on 24.06.2009, the 4th Respondent-Bank transferred the property in favour of the appellant under F a duly registered certificate of sale.

By the impugned order, the Division Bench set aside the sale on the ground that it was not conducted in a fair and proper manner and imposed condition on G Respondents 1 and 2 to furnish a Demand Draft of Rs.2 crores in favour of the appellant and if payment is not made, as directed, the sale in favour of the appellant would stand confirmed and the writ appeal would automatically stand dismissed. In the event of the H payment of Rs.2 crores, the appellant was directed to MATHEW VARGHESE v. M. AMRITHA KUMAR & 741 ORS. hand over the original sale deed obtained by him from the A Bank to enable Respondents no.1 and 2 to approach the Sub-Registrar and Revenue Authorities for cancellation of registration, consequent mutation, etc.

Respondents no.1 and 2 did not make the payment 8 within the said date, as directed by the Division Bench. Instead an application was filed by the Respondents 1 and 2 seeking further six weeks time to effect the payment of Rs.2 crores. The Division Bench passed order on 18.06.2010, extending the time till 20.06.2010. The said C extension was granted by holding that on such deposit, sale made by the 4th Respondent-Bank in favour of the appellant would stand cancelled and the Bank should effect the sale in favour of the 8th Respondent. The 8th Respondent was directed to deposit Rs.2.03 crores before the 4th Respondent-Bank on 19.06.2010 and the D time granted for payment in terms of the judgment was extended till 20.06.2010. On 8.7.2010, after noting that appellant had not withdrawn the amounts deposited with the 4th respondent bank, the Division Bench allowed the I.A. and directed 4th respondent Bank to execute the sale E deed in favour of the 8th Respondent for the sale consideration of Rs.2.03 crores. The instant appeals were filed challenging the order of the Division Bench of the High Court .. F

Disposing of the appeals, the Court HELD: 1. Under Section 13(1) of the SARFAESI Act, it is provided that any security interest created in favour of the SECURED CREDITOR may be enforced without the intervention of the Court and Tribunal by such creditor G in accordance with the provisions of this Act. The non-obsta nte clause in the opening set of expressions contained in Section 13(1) is restricted to Section 69 or Section 69A of the T.P. Act. The only other relevant aspect contained in the said sub-section is that such H 742 SUPREME COURT REPORTS [2014] 2 S.C.R. A enforcement should be in accordance with the provisions of this Act. S~ction 13(1) says that while on the one hand, any SECURED CREDITOR may be entitled to enforce the SECURED ASSET created in its favour on its own without resorting to any court proceedings or approaching the B Tribunal, such enforcement should be in conformity with the other provisions of the SARFAESl·Act. [Paras 24) [767-G-H; 768-B-C]

2. Sub-section (8) of Section 13 states that a c borrower can tender to the SECURED CREDITOR the dues together with all costs, charges and expenses incurred by the SECURED CREDITOR at any time before the date fixed for sale or transfer. In .the event of such tender once made as stipulated in the said provision, the mandate is that the SECURED ASSET should not be sold D or transferred by the SECURED CREDITOR. It is further reinforced to the effect that no further step should also be taken by the SECURED CREDITOR for transfer or sale of the SECURED ASSET. There is a valuable right recognized and asserted in favour of the borrower, who E is the owner of the SECURED ASSET and who is extended an opportunity to take all efforts to stop the sale or transfer till the last minute before which the said sale or transfer is to be effected. Having regard to such a · valuable right of a debtor having been embedded in the F said sub-section, ·it will have to be stated in uncontroverted terms that the said provision has been engrafted in the SARFAESI Act primarily with a view to protect the rights of a borrower, inasmuch as, such an ownership right is a Constitutional Right protected under G Article 300A of the Constitution, which mandates that no person shall be deprived of his property save by authority of law. Therefore, de hors, the extent of borrowing made and whatever costs, charges were incurred by the SECURED CREDITOR in respect of such H borrowings, when it comes to the question of realizing MATHEW VARGHESE v. M. AMRITHA KUMAR & 743

ORS. the dues by bringing the property entrusted with the A SECURED CREDITOR for sale to realize money advanced without approaching any Court or Tribunal, the SECURED CREDITOR as a TRUSTEE cannot deal with the said property in any manner it likes and can be disposed of only in the manner prescribed in the 8 SARFAESI Act. Therefore, the creditor should ensure that the borrower was clearly put on notice of the date and time by which either the sale or transfer will be effected in order to provide the required opportunity to the borrower to take all possible steps for retrieving his C property or at least ensure that in the process of sale the SECURED ASSET derives the maximum benefit and the SECURED CREDITOR or anyone on its behalf is not allowed to exploit the situation of the borrower by vk1:ue of the proceedings initiated under the SARFAESI Act. 0 [Para 26) [768-F-H; 769-C-H; 770-A] Valji Khimji and Company vs. Official Liquidator of Hindustan NitroProduct (Gujarat) Limited and Ors. (2008) 9 SCC 299: 2008 (12) SCR 1; United Bank of India vs. Satyawati Tondon and Ors. (2010) 8 SCC 110: 2010 (9) SCR E . 1; Narandas Karsondas vs. S.A. Kamtam and Anr. (1977) 3 SCC 247: 1977 (2) SCR 341; Mardia Chemicals Ltd. and Ors. vs. Union of India and Ors. (2004) 4 SCC 311: 2004 (3) SCR 982 - referred to.

3. Rules 8 and 9 of the Security Interest · F (Enforcement) Rules, 2002 prescribe the procedure to be followed by a SECURED CREDITOR while resorting to a sale after the issuance of the proceedings under Section 13(1) to (4) of the SARFAESI Act. Under Rule 9(1), it is prescribed that no sale of an immovable property under · G the rules should take place before the expiry of 30 days from the date on which the public notice of sale is published in the newspapers as referred to in the proviso to sub-rule (6) of Rule 8 or notice of sale has been served to the borrower. Sub-rule (6) of Rule 8 again states that H 744 SUPREME COURT REPORTS [2014] 2 S.C.R. A the authorized officer should serve to the borrower a notice of 30 days for the sale of the immovable SECURED ASSETS. Reading sub-rule (6) of Rule, 8 and sub-rule (1) of Rule 9 together, the service of individual notice to the borrower, specifying clear 30 days time gap for effecting any sale of immovable SECURED ASSET is8 a statutory mandate. It is also stipulated that no sale should be affected before the expiry of 30 days from the date on which the public notice of sale is published in the newspapers. The use of the expression 'or' in Rule 9(1) should be read as 'and' as that alone woufd- l;>e in C consonance with Section 13(8) of the SARFAESI Act. The_ other prescriptions contained in the- proviso to sub-rule

(6) of Rule 8 relates to the details to be set out in the newspaper publication, one of which should be in 'vernacular language' with sufficient circulation in the D locality by setting out the terms of the sale. While setting out the terms of the sale, it should contain the description of the immovable property to be sold, the known encumbrances of the SECURED CREDITOR, the secured debt for which the property is to be sold, the E reserve price below which the sale cannot be effected, the time and place of public auction or the time after which sale by any other mode would be completed, the deposit of earnest money to be made and any oth~r details which the authorized officer considers material for a purchaser to know in order to judge the nature and value of the F property. Such a detailed procedure while resorting to a sale of an immovable SECURED ASSET is prescribed under Rules 8 and 9(1). The paramount objective is to provide sufficient time and opportunity to the borrower to take all efforts to safeguard his right of ownership G either by tendering the dues to the creditor before the date and time of the sale or transfer, or ensure that the SECURED ASSET derives the maximum price and no one is allowed to exploit the vulnerable situation in which the borrower is placed. [Paras 28 to 30] [770-D-G; 771-B-F; H 772-C-D] MATHEW VARGHESE v. M. AMRITHA KUMAR & 745 ORS.

4. Rules 8(1) to (3) and in particular sub-rule (3) A speaks about the responsibility of the SECURED CREDITOR vis-a-vis the SECURED ASSET taken possession of. Under sub-rule (1) of Rule 8, the prescribed manner in which the possession is to be taken by issuing the notice in the format in which such B notice of possession is to be issued to the borrower is stipulated. Under sub-rule (2) of Rule 8 again, it is stated as to how the SECURED CREDITOR should publish the notice of possession as prescribed under sub-rule (1) to be made in two leading newspapers, one of which should be in the vernacular language having sufficient C circulation in the locality and also such publication should have been made seven days prior to the intention of taking possession. Sub-rule (3) of Rule 8 really casts much more onerous responsibility on the SECURED CREDITOR once possession is actually taken by its D authorised officer. Under sub-rule (3) of Rule 8, the property taken possession of by the SECURED CREDITOR should be kept in its custody or in the custody of a person authorized or appointed by it and it is stipulated that such person holding possession should E take as much care of the property in its custody as a owner of ordinary prudence would under similar circumstances take care of such property. The underlining purport of such a requirement is to ensure that under no circumstances, the rights of the owner till Fsuch right is transferred in the manner known to law is infringed. A reading of Rules 8 and 9, in particular, sub-rule (1) to (4) and (6) of Rule 8 and sub-rule (1) of Rule 9 makes it clear that simply because a secured interest in a SECURED ASSET is created by the borrower in favour of the SECURED CREDITOR, the said asset in the event G of the same having become a NON-PERFORMING ASSET cannot be dealt with in a light-hearted manner by way of sale or transfer or disposed of in a casual manner or by not adhering to the prescriptions contained under the SARFAESI Act and the Rules. [paras 31, 32] [772-E-H; H

746 SUPREME COURT REPORTS [2014] 2 S.C.R. A 773-A-C, F-G] 5. A close reading of Section 37 shows that the provisions of the SARFAESI Act or the rules framed thereunder will be in addition to the provisions of the B RDDB Act. Section 35 of the SARFAESI Act states that the provisions of the SARFAESI Act will have overriding effect notwithstanding anything inconsistent contained in any other law for the time being in force. Therefore, reading Sections 35 and 37 together, it will have to be held that in the event of any of the provisions of RDDB C Act not being inconsistent with the provisions of the SARFAESI Act, the application of both the Acts, namely, SARFAESI Act and RDDB Act, would be complementary to each other. The HEADING of the said Section also makes the position clear that application of other laws are D not barred. The effect of Section 37 would, therefore, be that in addition to the provisions contained under the SARFAESI Act, in respect of proceedings initiated under the said Act, it will be in order for a party to fall back upon the provisions of the other Acts mentioned in Section 37, E namely, the Companies Act, 1956, the Securities Contracts (Regulation) Act, 1956, the Securities and Exchange Board of India Act, 1992, the Recovery of Debts Due to Banks and Finances Institutions Act, 1993, or any other law for the time being in force. [paras 42, 43] [780-F H; 781-A-C, H; 782-A-B]

Transcore Vs. Union of India and Anr. (2008) 1 SCC 125: 2006 (9) Suppl. SCR 785; Ram Kishun and Ors. vs. State of Uttar Pradesh and Ors. (2012) 11 SCC 511: 2012 (6) SCR 105; Bhinka and Ors. vs. Charan Singh AIR 1959 SC 960: G 1959 Suppl. SCR 798 - relied on. Eastern Counties etc. Railway Vs. Marriage (1861) 9 HLC 32 - referred to. Craias on Statute Law, Seventh Edition, p.207- referred H to. MATHEW VARGHESE v. M. AMRITHA KUMAR & 747 ORS.

6. The application of the SARFAESI Act will be in A addition to, in the instant case to Section 29 of the RDDB Act. Whatever stipulations contained in Section 29 as regards the application of certain provisions of the Income Tax Act, 1961 in particular Schedule 2 Part I Rule 15 of the Income Tax Rules, 1962 for effecting a sale or B transfer would apply automatically. Therefore, what is to be considered is as to what is the mode prescribed under the above provisions, namely, Rule 15 prescribed under Schedule 2 Part I of the Income Tax Rules, 1962. Section 29 of the RDDB Act is an enabling provision under which c the Second and Third schedule to the Income Tax Act, 1961 (43 of 1961) and the Income Tax Rules, 1962 can be applied as far as possible with necessary modifications as if the provisions and the rules are referable to the DEBT DUE, instead of the income tax due. Therefore, 0 fictionally, by virtue of Section 29 of the RDDB Act, the mode and method by which a recovery of income tax can be resorted to under the Second and Third Schedule to the Income Tax Act and the Income Tax Rules, 1962 have to be followed. Therefore, a reading Section 37 of the E SARFAESI Act and Section 29 of the RDDB Act, the only aspect which has to be taken care of is that while applying the procedure prescribed under Rule 15 of the Income Tax Rules, 1962, no conflict with reference to any of the provisions of the SARFAESI Act, takes place. [paras F45, 46] [783-B-H]

7. A reading of the Rule 15 of the Income Tax Rules, 1962 does not in any way conflict with either Section 13(8) of the SARFAESI Act or Rules 8 and 9 of the Rules, 2002. Sub-rule (1) of Rule 15 only deals with the discretion of G the Tax Recovery Officer to adjourn the sale by recording his reasons for such adjournment. The said Rule does not in any way conflict with either Rures 8 or 9 or Section 13, in particular sub-section (1) or sub-section (8) of the SARFAESI Act. Therefore, to that extent there is no H 748 SUPREME COURT REPORTS [2014] 2 S.C.R.

A difficulty in applying Rule 15. As far as sub-rule (2) is concerned, the same is clear to the effect that a sale of immovable property once adjourned under sub-rule (1) for a longer period than one calendar month, a fresh proclamation of sale should be made unless the defaulter B consents to waive it. The said sub-rule also does not conflict with any of the provisions of the SARFAESI Act, in particular Section 13 or Rules 8 and 9. In fact there is no provision relating to grant of adjournment or issuance of a fresh proclamation for effecting the sale after the c earlier date of sale was not adherered to in the SARFAESI Act. In such circumstances going by the prescription contained in Section 37 of the SARFAESI Act, the provision contained in Section 29 of the RDDB Act will be in addition to and not in derogation of the provisions of the SARFAESI Act, the provisions contained in Rule 15,0 which is applicable by virtue of the stipulation contained in Section 29 of the RDDB Act, whatever stated in sub-rule (2) of Rule 15 should be followed in a situation where a notice of sale notified as per Rules 8 and 9(1) of the E Securitisation Trust Rules, read along with Section 13(8) gets postponed. Such a construction of the provisions, namely, Sections 37, 13(8) and 37 of the SARFAESI Act, read along with Section 29 with the aid of Rule 15 could alone be made and in no other manner, therefore, hold that unless and until a clear 30 days notice is given to the F borrower, no sale or transfer can be resorted to by a SECURED CREDITOR. In the event of any such sale properly notified after giving 30 days clear notice to the borrower did not take place as scheduled for reasons which cannot be solely attributable to the borrower, the G SECURED C.REDITOR cannot effect the sale or transfer of the SECURED ASSET on any subsequent date by relying upon the notification issued earlier. In other words, once the sale does not take place pursuant to a notice issued under Rules 8 and 9, read along with H Section 13(8) for which the entire blame cannot be MATHEW VARGHESE v. M. AMRITHA KUMAR & 749

ORS. thrown on the borrower, it is imperative that for effecting A the sale, the procedure prescribed above will have to be followed afresh, as the notice issued earlier would lapse. As per sub-rule (8) of Rule 8, sale by any method other than public auction or public tender can be on such terms as may be settled between the parties in writing. B As far as sub-rule (8) is concerned, the parties referred to can only relate to the SECURED CREDITOR and the borrower. It is, therefore, imperative that for the sale to be effected under Section 13(8), the procedure prescribed under Rule 8 read along with 9(1) has to be necessarily c followed, inasmuch as that is the prescription of the law for effecting the sale. Any other construction will be doing violence to the provisions of the SARFAESI Act, in particular Section 13(1) and (8) of the said Act. [para 48, 49] [784-D-H; 785-A-H; 786-A-B] D 8. In the instant case, the initial sale was notified to take place on 25.09.2007. The paper publication was made on 23.08.2007. Respondents 1 and 2 were informed by the 4th Respondent-Bank only on 30.08.2007.

Therefore, as the sale date was 25.09.2007 it did not fulfill E the mandatory requirement of 30 clear days notice to the borrower as stipulated under sub-rule (6) of Rule 8. But at the intervention of the Court, the sale date fixed on 25.09.2007 was adjourned by six weeks. In any case, the sale was not effected even after the six weeks period F expired as directed. The Securitisation Application came to be disposed of by the ORT only on 27 .12.2007. Therefore, once the Securitisation Application was dismissed on 27.12.2007, even assuming that there was no impediment for the SECURED CREDITOR, namely, G the 4th Respondent-Bank to resort to sale under the provisions of the SARFAESI Act, there should have been a fresh notice issued in accordance with Rules 8(6) and 9(1) of the Rules, 2002. Unfortunately, the 4th Respondent-Bank stated to have effected the sale on H 750 SUPREME COURT REPORTS [2014] 2 S.C.R.

A 28.12.2007 by accepting the tender of the appellant and by way of further process, directed the appellant to deposit the 25% of the amount on that very day and also directed to deposit the balance amount within 15 days, which was deposited by the appellant on 11.01.2008. In B fact, after the deposit of the 25% of the amount on 28.12.2007, the 4th Respondent-Bank stated to have confirmed the sale in favour of the appellant on 31.12.2007. After the deposit of the balance amount on 11.01.2008, the 4th Respondent-Bank informed the c Respondents no.1 and 2 about the confirmation of sale and thereby, provided no scope for Respondents no.1 and 2 to tender the dues of the SECURED CREDITOR, namely, the 4th Respondent-Bank with all charges, expenses etc., as has been provided under Section 13(8) of the SARFAESI Act. Therefore, the whole procedure0 followed by the 4th Respondent-Bank in effecting the sale on 28.12.2007 and the ultimate confirmation of the sale on 11.01.2008, stood vitiated as the same was not in conformity with the provisions of the SARFAESI Act and the Rules framed thereunder. Though, such a detailed E consideration of the legal issues was not made by the Division Bench while setting aside the sale effected in favour of the appellant, having regard to the construction of the provisions of the SARFAESI Act, the RDDB Act and the relevant Rules, the Judgment of the Division Bench F was perfectly justified. [Paras 50, 51] [786-C-H; 787-A-G]

9. In the order dated 18.06.2010 passed by the Division Bench, reference was made to the stand of Respondents 1 and 2 that they had to raise funds by G arranging for the sale of the very same SECURED ASSET, which took time as many buyers were reluctant to come forward because of the chance of continued litigation. The Division Bench without anything more, accepted the said reason (lnd by allowing the I.A. H permitted the 8th Respondent to deposit 2.03 crores by MATHEW VARGHESE v. M. AMRITHA KUMAR & 751 ORS.

19.06.2001 and on such deposit it held that the time A granted for payment stood extended till 20.06.2010. It further held that on such deposit being. made, the sale made by the 4th Respondent-Bank in favour of the appellant would be cancelled and the 4th Respondent should effect a sale in favour of the 8th Respondent. In B the subsequent I.A., the Division Bench directed the 4th Respondent-Bank to execute the sale in favour of the 8th Respondent taking ote of the fact of deposit of Rs.2.03 crores by the 8th Respondent with the 4th RespondQnt-Bank. After the Order dated 18.06.2010 and 08.07.20·10, c the Appellant filed the Special Leave Petition in this Court. Vide Order dated 08.08.2013, while declining to vacate Status Quo Order dated 30.07 .2010, the Special Leave Petition itself was directed to be listed for final hearing. Though the 8th Respondent is stated to have deposited Dthe sum of Rs.2.03 crores with the 4th Respondent-Bank, as per the Order dated 18.06.2010 in IA, the other directions in the main Order and the subsequent directions contained in the Orders dated 18.06.2010 and 08.07.2010, were not carried out. The sale which was already fixed in favour of the appellant continued to. E remain in force and the sum of Rs.2.03 crores deposited by the 8th Respondent remained with the 4th Respondent-Bank. [Paras 56, 57) [791-B-F; 792-A-C]

10. There was absolutely no justifiable grounds for F the Division Bench to grant further time in its Order dated 18.06.2010, it will be travesty of justice if the earlier Judgment dated 08.03.2010, which worked itself out on 08.05.2010, is to be reversed for the flimsy grounds raised by the Respondents no. 1 and 2 that they could not raise G funds in spite of two months time granted to them for paying a sum of Rs.2 crores in favour of the appellant. While the time granted by_ the Division Bench expired by 08.05.2010, the application for extension was filed 40 days later, i.e. on 10.06.2010. Therefore, for such a H 752 SUPREME COURT REPORTS [2014] 2 S.C.R.

A recalcitrant attitude displayed by Respondents 1 and 2 in respect of a litigation which involved very high stakes, the Division Bench should not have come for their rescue in the absence of any weighty reasons. The reason adduced on behalf of Respondent 1 and 2 is the B standard reason which any party would plead while seeking for extension of time. Since very valuable rights of the appellant were at stakes and the Order of the Division Bench also remained in force, in so far as it related to the cancellation of the sale deed, which existed C in favour of the appellant till 08.05.2010 and by virtue of the non-compliance of the conditions imposed in the said Judgment dated 08.03.2010 by the Respondents no.1 and 2, the ownership rights of the appellant got crystallized on and after 09.05.2010, there was no justification at all for the Division Bench to interfere with the said right in0 such a casual manner by accepting the flimsy reasons of the Respondents no.1 and 2. The ownership right which got crystallized in favour of the appellant as on 09.05.2010, could not have been snatched away by the Division Bench by passing the impugned orders dated E 18.06.2010 and 08.07.2010. With reference to the right of ownership of the Respondents 1 and 2 with reliance upon Article 300A of the Constitution would equally apply to the appellant as well in such a situation. Therefore, such a right which accrued in favour of the appellant F ought not to have been interfered with by the Division Bench and the Orders passed in the interim application filed at the instance of the Respondents no.1 and 2, along with the 8th Respondent herein are not justified.

Therefore, while upholding the Judgment of the Division G Bench dated 08.03.2010, the Orders dated 18.06.2010 and 08.07.2010 are set aside. [Para 58] [792-E-H; 793-A-F] 11. There is another very relevant factor which cannot be ignored, namely, that the value of the property H which was knocked out in favour of the appellant in a MATHEW VARGHESE v. M. AMRITHA KUMAR & 753 ORS. sum of Rs.1.27 crores by confirming the sale by the 4th A Respondent-Bank on 31.12.2007 and 11.01.2008, the same was found to be not in accordance with the provisions of the SARFAESI Act. Since the proper procedure for effecting the sale was not followed, it will have to be held that the price fetched through the B appellant cannot be held to be the correct price for the mortgaged property involved in these proceedings.

Further, the very fact that in the year 2010 the property could fetch Rs.2.03 crores, in all fairness even while confirming the Order of the Division Bench, by which the c sale in favour of the appellant came to be confirmed, the difference in the sale price should .. be directed to be paid by the Appellant. While the price paid by the appellant was Rs.1.27 crores, the price ultimately fetched at the im;tance of the Respondents no.1 and 2 was Rs.2.03 0 crores. Therefore, after giving credit to Rs.1.27 crores, the appellant would still be liable to pay a further sum of Rs.76 lacs to the Respondents no.1 and 2. Accordingly, the order is passed. [Para 59] [793-G-H; 794-A-D] Case Law Reference: E 2008 (12) SCR 1 referred to Para 16 2010 (9) SCR 1 referred to Para 16 1977 (2) SCR 341 referred to Para 17 F 2012 (6) SCR 105 relied on Para 21 2004 (3) SCR 982 referred to Para 37 2006 (9) Suppl. SCR 785 relied on Para 42 G (1861) 9 HLC 32 referred to Para 43 1959 Suppl. SCR 798 relied on Para 44 CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1927-1929 of 2014. H 754 $UPREME COURT REPORTS [2014] 2 S.C.R. A From the Judgment and Order dated 08.03.2010 in WA No. 1555/2009 dated 18/06/2010 in IA No. 437/2010 in WA No.1555/2009 and dated 08/07/2010 in IA No. 507/2010 in WA No. 1555/2009 of the High Court of Kerala at Ernakulam. B Krishnan Venugopal, Abir Phukhan, Uday Rathore, A. Raghunath for the Appellant. Shyam Diwan, M.K.S. Menon, Meena, C.R., K.

Prabhakaran, Himanshu Munshi, Manish Garani, Durga Dutt, Robin V.S., Abhinav Malhotra, Usha Nandini V. for the C Respondents. The Judgment of the Court was delivered by FAKKIR MOHAMED IBRAHIM KALIFULLA, J. 1. Leave D granted. 2. This appeal by the purchaser, in a tender-cum-auction sale held by the 4th Respondent-Bank, is directed against the judgments and final orders dated 08.03.2010 in Writ Appeal No: 1555 of 2009, Order dated 18.06.2010 in I.A. No.437 of E 2010 in Writ Appeal No.1555 of 2009 and Order dated 08.07.2010 in I.A. No.507 of 2010 in Writ Appeal No.1555 of 2009 passed by the High Court of Kerala at Ernakulam. 3. The interesting but very serious question that arises for F consideration in this appeal is as regards the interpretation of Section 13(8) of the SARFAESI Act read with Rules 8 and 9 of the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as "the Rules, 2002").

4. The 1st and 2nd Respondents herein stood as G guarantors in respect of a credit facility to the tune of Rs.30,00,000/- granted by the 4th Respondent-Bank in favour of a company called 'Jerry Merry Exports Private Limited'. As guarantors, the 1st and 2nd Respondents created an EQUITABLE MORTGAGE in favour of 4th Respondent-Bank H by depositing the title deeds of their property bearing Survey MATHEW VARGHESE v. M. AMRITHA KUMAR & 755 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.l No.150/12A (40.20 cents), ~urvey No.150/12C (11 cents) and A Survey No.150/13 (26 cents) totaling 77.20 cents situated in Padivattom Kana, Edappally South Village, Kanayanoor Taluk, Emakulam District Kochi, Kerala (hereinafter referred to as "the mortgage property"). When the transaction became a NON-PERFORMING ASSET, the 4th Respondent-Bank filed O.A. B No.31 of 2002 for recovery of Rs.33,77,053/- along with interest @ 18% per annum. The 4th Respondent-Bank also issued a notice under Section 13(2) of the SARFAESI Act on 11.08.2006 for a sum of Rs.70,77,590/-. On 20.02.2007, the 4th Respondent-Bank is stated to have taken possession of the c mortgaged property by invoking Section 13(4) of SARFAESI Act, read along with Rules 8 and 9 of the Ru_les, 2002.

5. The 1st and 2nd Respondents filed a Securitisation Application i.e. S.A. No.20 of 2007, before the Debt Recovery Tribunal (hereinafter referred to as "the ORT") Ernakulam, D challenging the possession notice dated 20.02.2007 and additionally also for an Order to restrain the 4th Respondent-Bank from evicting Respondents 1 and 2. Between 09.05.2007 and 24.07.2007 the attempts made for One Time Settlement (hereinafter referred to as "OTS") also failed and the 4th E Respondent-Bank withdrew its offer of OTS, which was in a sum of Rs.55,00,000/-. 6. On 14.08.2007, the 4th Respondent-Bank issued a notice to Respondents 1 and 2, as well as others of its intention Fto sell the property under Rule 8(6) of the Rules, 2002 by fixing a reserve price of Rs.1,25,00,000/-. On 23.08.2007, the 4th Respondent-Bank published its notice of sale of property in Indian Express and Mathrubhoomi, inviting tenders-cum-auction from the public. The 1st and 2nd Respondents were informed by the 4th Respondent-Bank by its notice dated 30.08.2007, G about the publication made on 23.08.2007 and also enclosed a tender form along with the terms and conditions for participation in the tender. The Appellant and one M/s Kent Construction stated to have submitted their tenders on 30.08.2007 and 01.09.2007. H 756 SUPREME COURT REPORTS [2014] 2 S.C.R.

A 7. On 20.09.2007, the 1st and 2nd Respondents filed W.P. No.27182 of 2007 challenging the proceedings initiated under the SARFAESI Act. The said writ petition was disposed of by a learned Single Judge of the Kerala High Court by Order dated 20.09.2007. By the said order, the High Court after B taking note of the O.A. filed by the 4th Respondent-Bank, as well as S.A. filed by the 1st and 2nd Respondents, directed the DRT to hear the parties and dispose of both the cases or at least the Securitisation Application filed by the 1st and 2nd Respondents without any delay. The High Court also noted that c at that point of time, the DRT had fixed 12.10.2007 as the date for disposal of both the applications. While issuing the said directions, the learned Judge gave liberty to the parties to settle the liability and also directed the 4th Respondent-Bank to defer the sale posted on 25.09.2007 by six weeks, by imposing a condition on Respondents 1 and 2 to deposit a sum of D Rs.10,00,000/- before the date of sale, i.e. 25.09.2007. It was also observed therein that since the 4th Respondent-Bank had agreed for OTS in a sum of Rs.55,00,000/-, the bank should waive interest if the 1st and 2nd Respondents offer a settlement within a reasonable time and by making payment of the said E amount.

8. It is common ground that pursuant to the said Order dated 20.09.2007, the sale which was scheduled to be held on 25.09.2007 was postponed. In fact, though the six weeks period F prescribed in the Order dated 20.09.2007 expired by 10.11.2007, it is stated that even thereafter the sale was not effected. Pursuant to the said order, the 1st and 2nd Respondents stated to have deposited the sum of Rs.10,00,000/- with the 4th Respondent-Bank. On 27.12.2007, G the DRT passed Orders in S.A. No.20 of 2007 dismissing the said application with costs, On the next day i.e. on 28.12.2007, the 4th Respondent-Bank accepted the tender of the Appellant who offered a sum of Rs.1,27,00,101/- and asked the Appellant to deposit 25% of the amount i.e. Rs.31,75,025/- on that day H itself and pay the balance amount within 15 days. The Appellant MATHEW VARGHESE v. M. AMRITHA KUMAR & 757 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] is stated to have ,deposited the 25% of the total bid amount A offered by it with the 4th Respondent-Bank. The Appellant is also stated to have deposited the balance amount on 11.61.2008. After deposit of 25% of the bid amount on 31.12.2007, the 4th Respondent-Bank confirmed the sale in favour of the Appellant and gave further time of 15 days for B depositing the balance amount.

9. After depositing the balance amount by the Appellant on 11.01.2008 and the confirmation of the sale in favour of the Appellant, the 4th Respondent-Bank informed the Respondents c 1 and 2 on 02.02.2008, about the confirmation of sale in favour of the Appellant and also the receipt of the entire consideration. The Respondents 1 and 2 were directed to collect the balance amount available with the 4th Respondent-Bank. On 12.02.2008, the Respondents 1 and 2 filed a Review Petition D No.157 of 2008 in W.P. No.27182 of 2007. The said Review Petition was dismissed giving liberty to Respondents 1 and 2 to challenge the sale. The Respondents 1 and 2 filed a Writ Petition No.5876 of 2008 on 18.02.2008, challenging the vires of the Rules, 2002 on the ground that it violated their right of E redemption by denying them adequate opportunity and time to repay the borrowed sum and the action of the Bank in having acted surreptitiously in selling the property without informing them. The said writ petition was dismissed by the learned Single Judge by Order dated 12.06.2009, on the ground that the Respondents 1 and 2 got an alternative efficacious remedy F available under the SARFAESI Act. As against the said Order, Respondents 1 and 2 filed Writ Appeal No.1555 of 2009, on 16.07.2009. In the meantime, on 24.06.2009, the 4th Respondent-Bank transferred the property in favour of the Appellant unde.r a duly registered certificate of sale. G

10. By the order impugned, the Division Bench took the view that the sale was not conducted in a fair and proper manner, that when the sale was initially postponed by six weeks from 25.09.2007, the Bank ought to have renotified the sale or H 758 SUPREME COURT REPORTS [2014] 2 S.C.R. A at least extended the time for receiving further tenders, particularly when only one valid tender was received on the last date notified for sale. The Division Bench further held that the sale was not even informed to Respondents 1 and 2 and they were informed only after the confirmation of the sale and after B receipt of their full consideration. The Division Bench, therefore, set aside the sale which was already executed in favour of the Appellant by imposing a condition that Respondents 1 and 2 furnish a Demand Draft of Rs.2,00,00,000/- from a local branch of a Nationalised Bank in favour of the Appellant and hand over c the same to him, within a period of two months from the date of the Order. It further held that if payment was not made, as directed, the sale in favour of the Appellant would stand confirmed and the Writ Appeal would automatically stand dismissed. In the event of the payment of Rs.2,00,00,000/- being made in the form of a Demand Draft, the Appellant was directed0 to hand over the original sale deed obtained by him from the Bank to enable Respondents 1 and 2 to approach the Sub-Reg is tra r and Revenue Authorities for cancellation of registration, consequent mutation, etc.

E 11. There was also a direction to the Sub-Registrar to restore the property in the name of the 1st and 2nd Respondents. On payment of the sum of Rs.2,00,00,000/-, the Bank was directed to remit the excess amount available with them to the Tax Recovery Officer in pursuance of the demand F already made by it and to credit the said amount in the account of Respondents 1 and 2. Liberty was also given to Respondents 1 and 2 to claim for refund, if they were eligible for any. Additionally, liberty was also given to Respondents 1 and 2 to refund the stamp duty, if they were eligible for such G refund. The period of two months granted by the Division Bench for Respondents 1 and 2 to deposit a sum of Rs.2,00,00,000/ - expired by 08.05.2010. 12. Respondents 1 and 2 did not make the payment within H the said date, as directed by the Division Bench. Instead an MATHEW VARGHESE v. M. AMRITHA KUMAR & 759 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

application was filed by the Respondents 1 and 2 in I.A. No.437 A of 2010 in Writ Appeal No.1555 of 2009 seeking for further six weeks time to effect the payment of Rs.2,00,00,000/- to the Appellant. In the said I.A. No.437 of 2010, the Oivisior: Bench passed its order on 18.06.2010, extending the time till 20.06.2010. The said extension was granted by holding that on B such deposit, sale made by the 4th Respondent-Bank in favour of the Appellant would stand cancelled and the Bank should effect the sale in favour of the 8th Respondent in Special Leave Petition No.21434 of 2010, namely, Mr. Koshi Phillip s/o Mathai Koshi, who shall hereinafter be referred to as the 8th c Respondent. The 8th Respondent herein was directed to depositRs.2,03,00,000/- before the 4th Respondent-Bank on 19.06.2010 and the time granted for payment in terms of the judgment was extended till 20.06.2010. Subsequently, in I.A. No.507 of 2010, the Division Bench after noting that the 0 Appellant had not withdrawn the amounts deposited with the 4th Respondent-Bank by stating that he has approached this Court by way of a Special Leave Petition and after finding that mere steps taken by the Appellant for filing the Special Leave Petition need not stand in the way of executing the sale deed E in favour of the 8th Respondent who had deposited the entire amount. In effect, the said I.A. No.507 of 2010 in Writ Appeal No.1555 of 2009 was allowed and the Bank was directed to execute the sale deed in favour of the 8th Respondent for the sale consideration of Rs.2,03,00,000/-.

F 13. As against the judgment in Writ Appeal No.1555 of 2009 and the orde1s ·passed in I.A Nos.437 of 2010 and 507 of 2010, the Appellant has come forward with these appeals. 14. We heard Mr. Krishnan Venugopal, Senior Counsel for G the Appellant, Mr. Shyam Divan, Senior Counsel for the 8th Respondent and Mr. C.U. Singh, Senior Counsel for the Respondents 1 and 2. Mr. Krishnan Venugopal, Senior Counsel for the Appellant in his submissions after referring to Section 13(8) of the SARFAESI Act and Rules 8 and 9 of the Rules, H 760 SUPREME COURT REPORTS [2014] 2 S.C.R.

A 2002 and after drawing our attention to the initial order of the learned Single Judge dated 20.09.2007 in Writ Petition No.27182 of 2007, submitted that by virtue of the said order of the High Court, the requirement of Section 13(8), as well as corresponding Rules were duly taken care of and the outer date B for sale was prescribed in the said order itself and once the debtor, namely, Respondents 1 and 2 failed to avail the said opportunity extended by the High Court, they cannot be allowed to complain about the ultimate sale effected on 28.12.2007. The learned Senior Counsel contended that in the Order dated c 20.09.2007, the High Court while directing the ORT to hear the parties and dispose of the O.A. and S.A. without any delay gave an option to Respondents 1 and 2 to settle the dues by making the payment of Rs.55,00,000/-, which was the OTS offered by the 4th Respondent-Bank with an observation that in the event of Respondents 1 and 2 making the said payment, the 4th0 Respondent-Bank should consider waiving interest on the said amount.

15. According to the learned Senior Counsel, when the 1st and 2nd Respondents failed to avail the said opportunity E offered in the Order dated 20.09.2007, by which order, the sale which was scheduled to be held on 25.09.2007 was directed to be postponed by six weeks, the 1st and 2nd Respondents cannot subsequently be heard to complain of any irregularity in the sale. The learned Senior Counsel would, therefore, F contend that in effect, the said Order dated 20.09.2007 of the High Court, took into account the entitlements of the guarantors who stepped into the shoes of the borrowers as provided under Section 13(8) of the SARFAESI Act, and therefore, the sale effected after the expiry of the period of six weeks granted by G the High Court and after the dismissal of the guarantors application, namely, S.A. by the ORT, i.e. on 28.12.2007, cannot be held to be in violation of the Section 13(8) of the SARFAESI Act. 16. The learned Senior Counsel further contended that by H MATHEW VARGHESE v. M. AMRITHA KUMAR & 761 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

the impugned order, the Division Bench exercised its A jurisdiction urider Article 226 of the Constitution, which this Court held ought not to have been exercised, when Respondents 1 and 2, as guarantors, had every right to work out their remedy as against the sale effected on 28.12.2007, under the provisions of the SARFAESI Act. The learned Senior B Counsel also contended that once the sale has been effected and confirmed in accordance with law, merely because someone else can offer a higher amount, the Court should not have interfered with the already confirmed sale as that would become an unending affair if such approach made by parties c are entertained. In support of his submissions, the learned Senior Counsel relied upon Valji Khimji and Company Vs. Official Liquidator of Hindustan Nitro Product (Gujarat) Limited and others - (2008) 9 SCC 299 and United Bank of India Vs. Satyawati Tandon and others - (2010) 8 SCC 110. The learned D Senior Counsel also contended that i.n any event, once the Division Bench ultimately directed Respondents 1 and 2 to deposit the sum of Rs.2,00,00,000/- within two months, i.e. on or before 08.05.2010, and the Respondents 1 and 2 failed to comply with the said condition, the order worked itself out and E the Writ Appeal stood dismissed without any further reference to the Court. According to the counsel, the extension of further time granted by the Division Bench in a belated application of Respondents 1 and 2 and modification of the conditional payment to be made by the 8th Respondent, was beyond the Fpowers of the Court and consequently the sale already effected by the 4th Respondent-Bank in favour of the Appellant became final and conclusive. The learned senior counsel, therefore, contended that the subsequent Order of the Division Bench dated 18.06.2010 in I.A. No.437 of 2010 and the order dated 08.07.2010 in I.A. No.507 of 2010, cannot be sustained. G

17. As against the above submissions made on behalf of the Appellant, the submission of Mr. Shyam Divan, learned Senior Counsel for the 8th Respondent was six-fold. According to Mr. Divan, the mortgagor's right of redemption is a statutorily H 762 SUPREME COURT REPORTS [2014] 2 S.C.R. A recognized one and continues till the time of registration of the sale, that the said general principle is engrafted in Section 13(8) of the SARFAESI Act read with Rules 8 and 9 of the Rules, 2002, that it is incumbent upon the Bank to have informed the borrower about the date and time of the sale, B which is implicit in ~he provision, that admittedly no notice was given by the Bank with reference to the sale held on 28.12.2007, that in any case since there was a postponement of the original sale scheduled, there ought to have been a fresh notification and, therefore, the High Court's conclusion about c non-issuance of sale notice was well justified. The learned senior counsel contended that eventually the order of the Division Bench of the High Court was equitable and, therefore, does not call for interference. Mr. Divan, learned Senior Counsel, drew support from Section 60 of the Transfer of D Property Act, 1882 (hereinafter referred to as "the T.P. Act") by relying upon the interpretation made by this Court on mortgagor's right of redemption engrafted in Section 60 of the T.P. Act in the decision reported in Narandas Karsondas Vs. S.A. Kamtam and another - (1977) 3 SCC 247.

E 18. By drawing a parallel to Section 13(8) of the SARFAESI Act vis-a-vis Section 60 of the T.P. Act, the learned Senior Counsel submitted that there should have been a definite intimation to the borrower before the sale or transfer, which is a legal requirement both under Section 13(8) read with F Rules 8(6) and 9(1), as well as Section 60 of the T.P. Act. By referring to the initial notice issued by the Bank on 23.08.2007, the learned Senior Counsel contended that the period mentioned therein did not survive after the passing of the order by the ORT on 27.12.2007 and if that initial notice was to be G revived for the purpose of effecting the sale and transfer, the borrower ought to have been mandatorily put on notice as prescribed under Section 13(8) of the SARFAESI Act. The learned Senior Counsel also relied upon Order XXI Rules 64 to 69 and submitted that in common law as well, when once a H sale is adjourned to a specified date, a future proclamation MATHEW YARGHESE v. M. AMRITHA ~UMAR & 763 ORS. [FAKKIR MOHAMED IBRAHIM KAUFULLA, J.] was the requirement as that alone would enable the mortgagor A to ensure that his valuable right of ownership is not frittered away without providing any opportunity for redemption.

19. The learned Senior Counsel by relying upon Section 29 of the Recovery of Debts Due to Banks and Financial B Institutions Act, 1993 (hereinafter referred to as "the RDDB Act") and Section 37 of the SARFAESI Act, read along with Rule 15 of the Second Schedule of the Income Tax (Certificate Proceedings Rules, 1962) (hereinafter referred to as "the Income Tax Rules, 1962"), contended that even under the C provisions of the SARFAESI Act, there is· a statutory requirement for renotification to effect the sale and, therefore, the non-compliance of the said requirement would render the sale effected by the Bank on 28.12.2007 invalid in law. 20. The learned Senior Counsel pointed out that after the D postponement of the. sale pursua.nt to the deposit of Rs.10,00,000/- on 25.09.2007, based on the judgment of the High Court dated 20.09.2007, the only intimation to the borrower at the instance of the Bank was dated 02.02.2008, which only said that surplus amount over and above the money E due to the Bank was adjusted and, therefore, the said notice was not in consonance with the provisions of the SARFAESI Act and the other statutory provisions required to be complied with and, therefore, the judgment of the Division Bench of the High Court does not call for interference. The learned Senior F Counsel drew our attention to various grounds raised in the writ petition wherein the above contentions of the borrower have been set out.

21. Supporting the submissions made by Mr. Shyam Divan, Mr. C.U. Singh, learned Senior Counsel for the Respondents G No.1 and 2, submitted that the non-obstante clause in Section 13(1) of the SARFAESI Act read along with Section 60, as well as, Sections 69 and 69A of the T.P. Act, would show that under Section 13(1) of the SARFAESI Act the non-obstante clause is restricted to Section 69 or 69A of the T.P. Act, and that the H 764 SUPREME COURT REPORTS [2014] 2 S.C.R.

A implication of Section 60 of the T.P. Act would apply in full force. According to the learned Senior Counsel, while the 4th Respondent-Bank made no mention about the other bidders in the High Court and merely submitted that the bid submitted by the Appellant was opened and confirmed, in the counter filed B before this Court, they came forward with a statement that pursuant to the paper publication two tenders were received and the Appellant was one of them, while the other one was one M/s Kent Construction. The learned Senior Counsel also pointed out that in paragraph 35 of the said Counter Affidavit c of the Bank before this Court, they further stated that the conclusion of the Division Bench that there was a sole bidder was incorrect, as there were two bidders wherein one of them Withdrew from bid on account of the earlier order of the High Court dated 20.09.2007. By referring to the above facts stated D on behalf of the Bank before the High Court and before this Court, the learned Senior Counsel contended that the only conclusion that can be drawn was that there was no transparency at all in conducting the sale. The learned Senior Counsel relied upon in Ram Kishun and others Vs. State of Uttar Pradesh and others - (2012) 11 SCC 511. E

22. Having heard the learned counsel for the respective parties and having perused the Judgments and the Orders impugned in these appeals and other material papers, in the first instance, we wish to deal with the appeal filed against the . F Judgment dated 08.03.2010 in Writ Appeal No.1555 of 2009 .. The Division Bench, after holding that the sale was not conducted in a fair and reasonable manner and thereby the borrowers' rights have been seriously infringed, set aside the sale effected on 28.12.2007, in favour of the Appellant and G directed the borrowers to give a Demand Draft for Rs.2,00,00,000/- drawn on a local branch of a Nationalised BanK in favour of the Appellant and hand over the same to him within a period of two months from the date of the Judgment. It • further held that if the payment was not made, as directed, the H sale in favour of the Appellant would stand confirmed and the MATHEW VARGHESE v. M. AMRITHA KUMAR & 765 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] writ appeal would stand dismissed. A 23. In order to examine the correctness of the impugned Judgment of the Division Bench, a serious look into Section 13, in particular sub-section (8) of the SARFAESI Act along with Rules 8 and 9 of the Rules, 2002 is required. We, therefore, 8 deem it appropriate to extract Sections 2(zc), 2(zf), 13(1) and (8) of the SARFAESI Act, as well as Rule 8 sub-rules (1 ), (3), (5) and (6) and. also Rule 9(1) which are as under:

"2(zc) "secured asset" means the property on which security interest is. created; C 2(zf) "security interest" means right, title and interest of any kind whatsoever upon property, created in favour of any secured creditor and includes any mortgage, charge, hypothecation, assignment other than those specified in D section 31; 13. Enforcement of security interest.- (1) Notwithstanding anything contained in section 69 or section 69A of the Transfer of Property Act, 1882 (4 of 1882), any security interest created in favour of any E secured creditor may be enforced, without the intervention of the court or tribunal, by such creditor in accordance with the provisions of this Act. (8). If the dues of the secured creditor together with all F costs, charges and expenses incurred by him are tendered to the secured creditor at any time before the date fixed for sale or transfer, the secured asset shall not be sold or transferred by the secured creditor, and no further step shall be taken by him for transfer or sale of that secured asset. G Rule 8. Sale of immovable secured assets.- (1) Where the secured asset is an immovable property, the authorised officer shall take or cause to be taken possession, by delivering a possession notice prepared as nearly as H possible in Appenoix IV to these rules, to the borrower and 766 SUPREME COURT REPORTS [2014) 2 S.C.R. A by affixing the possession notice on the outer door or at such conspicuous place of the property.

(3) In the event of possession of immovable property is actually taken by the authorised officer, such property shall be kept in his own custody.or in the custody of any personB authorised or appointed by him, who shall take as much care of the property in his custody as a owner of ordinary prudence would, under the similar circumstances, take of such property. c (5) Before effecting sale of the immovable property referred to in sub-rule (1) of rule 9, the authorised officer shall obtain valuation of the property from an approved valuP-~ and in consultation with the. secured creditor, fix the reserve price of the property and may sell the whole or any D part of such immovable secured asset by any of the following methods:- (a) by obtaining quotations from the persons dealing with similar secured assets or otherwise interested !n buying the such assets; orE (b) by inviting tenders from the public; (c) by holding public auction; or (d) by private treaty.F (6) The authorised officer shall serve to the borrower a notice of thirty days for sale of the immovable secured assets, under sub-rule (5):

G Provided that if the sale of such secured asset is being effected by either inviting tenders from the public or by holding public auction, the secured creditor shall cause a public notice in two leading newspaper.s one in vernacular language having sufficient circulation in the locality by setting out the terms of sale, which shall include;-H MATHEW VARGHESE v. M. AMRITHA KUMAR & 767 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] · (a) The description of the immovable property to be A sold, including the details of the encumbrances known to the secured creditor; (b) the secured debt for recovery of which the property is to be sold; B (c) reserve price, below which the property may not be sold; (d) time and place of public auction or the time after which sale by any other mode shall be completed; C (e) depositing earnest money as may be stipulated by the secured creditor; {f) any other thing which the authorised officer 0 considers it material for a purchaser to know in order to judge the nature and value of the property. Rule 9. Time of sale, issue of sale certificate and delivery of possession, etc.- E (1) No sale of immovable property under these 'rules shall take place before the expiry of thirty days from the date on which the public notice of sale is published in newspapers as referred to in the proviso to sub-rule (6) or notice of sale has been served to the borrower. F

24. Under Section 13(1 ), it is provided that any security interest created in _favour of the SECURED CREDITOR may be enforced without the intervention of the Court and Tribunal by such creditor in accordance with the provisions of this Act. The non-obstante clause in the opening set of expressions G contained in Section 13(1 ), as· pointed out by Mr. Singh, learned Senior Counsel for the borrowers, is restricted to Section.69 or Section 69A of the T.P. Act. Apart from noting the said statutory impediment, to be noted in Section 13(1), the H 768 SUPREME COURT REPORTS [2014) 2 S.C.R. A more important feature to be noted is that a free hand is given to the SECURED CREDITOR for the purpose of enforcing any security interest created in favour of SECURED CREDITOR, without the intervention of the Court or Tribunal. The only other relevant aspect contained in the said sub-section is that such B enforcement should be in accordance with the provisions of this Act. A reading of Section 13(1 ), therefore, is clear to the effect that while on the one hand any SECURED CREDITOR may be entitled to enforce the SECURED ASSET created in its favour on its own without resorting to any court proceedings or c approaching the Tribunal, such enforcement should be in conformity with the other provisions of the SARFAESI Act.

25. Keeping the said stipulation contained in Section 13(1) in mind, it will have to be examined as to what are the other statutory requirements to be fulfilled when enforcement of a right D created in favour of ;;my SECURED CREDITOR in respect of a security interest is created. As we are concerned with the sale of property mortgaged by the borrowers, for the prese~t we leave aside any other form or mode of enforcement, except the one relating to the equitable mortgage created in favour of E the Bank. For that purpose, we find thatsub-section (8) of Section 13 would be relevant. 26. A careful reading of sub-section (8), therefore, has to be made to appreciate the legal issue involved and the F submissions made by the respective counsel on the said provision. A plain reading of sub-section (8) would show that a borrower can tender to the SECURED CREDITOR the dues together with all costs, charges and expenses incurred by the SECURED CREDITOR at any time before the date fixed for G sale or transfer. In the event of such tender once made as stipulated in the said provision, the mandate is that the SECURED ASSET should not be sold or transferred by the SECURED CREDITOR. It is further reinforced to the effect that no further step should also be taken by the SECURED H MATHEW VARGHESE v. M. AMRITHA KUMAR & 769 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

CREDITOR for transfer or sale of the SECURED ASSET. The A contingency stipulated in the event of the tender beiog made by a debtor of the dues inclusive of the costs, charges, etc., would be that such tender being made before the date fixed for sale or transfer, the SECURED CREDITOR should stop all further steps for effecting the sale or transfer. That apart, no B further step should also be taken for transfer or sale. When we analyze in depth the stipulations contained in the said sub-section (8), we find that there is a valuable right recognized and asserted in favour of the borrower, who is the owner of the SECURED ASSET and who is extended an opportunity to take c all efforts to stop the sale or transfer till the last minute before which the said sale or transfer is to be effected. Having regard to such a valuable right of a debtor having been embedded in the said sub-section, it will have to be stated in uncontroverted terms that the said provision has been engrafted in the D SARFAESI Act primarily with a view to protect the rights of a borrower, inasmuch as, such an ownership right is a Constitutional Right protected under Article 300A of the Constitution, which mandates that no person shall be deprived of his property save by authotity of law. Therefore, de hors, the Eextent of borrowing made and whatever costs, charges were incurred by the SECURED CREDITOR in respect of such borrowings, when it comes to the question of realizing the dues by bringing the property entrusted with the SECURED CREDITOR for sale to realize money advanced without Fapproaching any Court or Tribunal, the SECURED CREDITOR as a TRUSTEE cannot deal with the said property in any manner it likes and can be disposed of only in the manner prescribed in the SARFAESI Act. Therefore, the creditor should ensure that the borrower was clearly put on notice of the date and time by which either the sale or transfer will be effected in G order to provide the required opportunity to the borrower to take all possible steps for retrieving his property or at least ensure that in the process of sale the SECURED ASSET derives the maximum benefit and the SECURED CREDITOR or anyone on its behalf is not allowed to exploit the situation of the borrower H

770 SUPREME COURT REPORTS [2014] 2 S.C.R. A by virtue of the proceedings initiated under the SARFAESI Act. More so, under Section 13(1) of the SAR FAES I Act, the SECURED CREDITOR is given a free hand to resort to sale of the property without approaching the Court or Tribunal. 27. Therefore, by virtue of the stipulations contained under8 the provisions of the SARFAESI Act, in particular, Section 13(8), any sale or transfer of a SECURED ASSET, cannot take place without duly informing the borrower of the time and date of such sale or transfer in order to enable the borrower to tender the dues of the SECURED CREDITOR with all costs, charges and C expenses and any such sale or transfer effected without complying with the said statutory requirement w.ould be a constitutional violation and nullify the ultimate sale.

28. Once the said legal position is ascertained, the D statutory prescription contained in Rules 8 and 9 have also got to be examined as the said rules prescribe as to the procedure to be followed by a SECURED CREDITOR while resorting to a sale after the issuance of the proceedings under Section 13(1) to (4) of the SARFAESI Act. Under Rule 9(1 ), it is E prescribed that no sale of an immovable property under the rules should take place before the expiry of 30 days from the date on which the public notice of sale is published in the newspapers as referred to in the proviso to sub-rule (6) of Rule 8 or notice of sale has been served to the borrower. Sub-rule F (6) of Rule 8 again states that the authorized officer should serve to the borrower a notice of 30 days for the sale of the immovable SECURED ASSETS. Reading sub-rule (6) of Rule 8 and sub-rule (1) of Rule 9 together, the service of individual notice to the borrower, specifying clear 30 days time gap for G effecting any sale of immovable SECURED ASSET is a statutory mandate. It is also stipulated that no sale should be affected before the expiry of 30 days from the date on which the public notice of sale is published in the newspapers. Therefore, the requirement under Rule 8(6) and Rule 9(1) H contemplates a clear 30 days individual notice to the borrower MATHEW VARGHESE v. M. AMRITHA KUMAR & 771 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

and also a public notice by way of publication in the A newspapers. In other words, while the publication in newspaper should provide for 30 days clear notice, since Rule 9(1) also states that such notice of sale is to be in accordance with proviso to sub-rule (6) of Rule 8, 30 days clear notice to the borrower should also be ensured as stipulated under Rule 8(6) B as well. Therefore, the use of the expression 'or' in Rule 9(1) should be read as 'and' as that alone would be in consonance with Section 13(8) of the SARFAESI Act. 29. The other prescriptions contained in the proviso to sub- C rule (6) of Rule 8 relates to the details to be set out in the newspaper publication, one of which should be in 'vernacular language' with sufficient circulation in the locality by setting out the terms of the sale. While setting out the terms of the sale, it should contain the description of the immovable property to be sold, the known encumbrances of the SECURED CREDITOR, D the secured debt for which the property is to be sold, the reserve price below which the sale cannot be effected, the time and place of public auction or the time after which sale by any other mode would be completed, the deposit of earnest money to be made and any other details which the authorized officer E considers material for a purchaser to know in order to judge the nature and value of the property.

30. Such a detailed procedure while resorting to a sale of an immovable SECURED ASSET is prescribed under Rules F 8 and 9(1 ). In our considered opinion, it has got a twin objective to be achieved. In the first place, as already stated by us, by virtue of the stipulation contained in Section 13(8) read along with Rules 8(6) and 9(1), the owner/borrower should have clear notice of 30 days before the date and time when the sale or G transfer of the SECURED ASSET would be made, as that alone would enable the owner/borrower to take all efforts to retain his or her ownership by tendering the dues of the SECURED CREDITOR before that date and time. Secondly, when such a SECURED ASSET of an immovable property is H 772 SUPREME COURT REPORTS [2014] 2 S.C.R.

A brought for sale, the intending purchasers should know the nature of the property, the extent of liability pertaining to the said property, any other encumbrances pertaining to the said property, the minimum price below which one cannot make a bid and the total liability of the borrower to the SECURED B CREDITOR. Since, the proviso to sub-rule (6) also mentions that any other material aspect should also be made known when effecting the publication, it would only mean that the intending purchaser should have entire details about the property brought for sale in order to rule out any possibility of c the bidders later on to express ignorance about the factors connected with the asset in question. Be that as it may, the paramount objective is to provide sufficient time and opportunity to the borrower to take all efforts to safeguard his right of ownership either by tendering the dues to the creditor before D the date and time of the sale or transfer, or ensure that the SECURED ASSET derives the maximum price and no one is allowed to exploit the vulnerable situation in which the borrower is placed.

31. At this juncture, it will also be worthwhile to refer to E Rules 8(1) to (3) and in particular sub-rule (3), in order to note the responsibility of the SECURED CREDITOR vis-a-vis the SECURED ASSET taken possession of. Under sub-rule (1) of Rule 8, the prescribed manner in which the possession is to be taken by issuing the notice in the format in which such notice F of possession is to be issued to the borrower is stipulated. Under sub-rule (2) of Rule 8 again, it is stated as to how the SECURED CREDITOR should publish the notice of possession as prescribed under sub-rule (1) to be made in two leading newspapers, one of which should be in the vernacular G language having sufficient circulation in the locality and also such publication should have been made seven days prior to the intention of taking possession. Sub.-rule (3) of Rule 8 really casts much more onerous responsibility on the SECURED· CREDITOR once possession is actually taken by its authorised H officer. Under sub-rule (3) of Rule 8, the property taken MATHEW VARGHESE v. M. AMRITHA KUMAR & 773 ORS. [FAKKIR MOHAM~D IBRAHIM KALIFULLA, J.]

possession of by the S~CURED CREDITOR should be kept A in its custody or in the 'custody of a person authorized or appointed by it and it is stipulated that such person holding possession should take as much care of the property in its custody as a owner of ordinary prudence would under similar circumstances take care of such property. The underlining B purport of such a requirement is to ensure that under no · circumstances, the rights of the owner till such right is transferred in the manner known to law is infringed. Merely because the provisions of the SARFAESI Act and the Rules enable the SECURED CREDITOR to take possession of such an c immovable property belonging to the owner and also empowers to deal with it by way of sale or transfer for the purpose of realizing the secured debt of the borrower, it does not mean that such wide power can be exercised arbitrarily or whimsically to the utter disadvantage of the borrower. D

32. Under sub-rule (4) of Rule 8, it is further stipulated that the authorized officer should take steps for preservation and protection of SECURED ASSETS and INSURE them if necessary till they are sold or otherwise disposed of. Sub-rule (4), governs all SECURED ASSETS, movable or immovable E and a further responsibility is created on the authorised officer to take steps for the preservation and protection of SECURED ASSETS and for that purpose can even INSURE such assets, until it is sold or otherwise disposed of. Therefore, a reading of Rules 8 and 9, in particular, sub-rule (1) to (4) and (6) of Rule F 8 and sub-rule (1) of Rule 9 makes it clear that simply because a secured interest in a SECURED ASSET is created by the borrower in favour of the SECURED CREDITOR, the said asset in the event of the same having become a NON-PERFORMING ASSET cannot be dealt with in a light-hearted manner by way G of sale or transfer or disposed of in a casual manner or by not adhering to the prescriptions contained under the SARFAESI Act and the abovesaid Rules mentioned by us. 33. Having analyzed the relevant statutory prescriptions H 774 SUPREME COURT REPORTS [2014] 2 S.C.R.

A under the SARFAESI Act, as well as, the Rules, 2002 it will be necessary to refer to the decisions placed before us on the above aspects, before examining the manner in which the sale of the SECURED ASSET of the 1st and 2nd Respondents was dealt with by the 4th Respondent-Bank and by effecting the sale B in favour of the Appellant herein.

34. Mr. Shyam Divan, learned Senior Counsel relied upon the decision in Narandas Karsondas (supra), in which the right of a mortgagor as prescribed under Section 60 of the T.P. Act has been spelt out. Under Section 60 of the T.P. Act, at any C time after the principal money fell due, there is a right in the mortgagor on payment or tender at a proper time and place of the mortgage money, to require a mortgagee to restore the property to the mortgagor with all rights prescribed as it stood prior to the mortgage. Under the proviso, the only impediment D would be that if such a right of a mortgagor stood extinguished by act of the parties or by the decree of a Court. Certain other conditions are also stipulated in the said provision for the mortgagor to seek for redemption of the mortgaged property. Dealing with the said provision, this Court held as under in E paragraphs 34 and 35. Paragraphs 34 and 35 are as under: "34. The right of redemption which is embodied in Section 60 of the Transfer of Property Act is available to the mortgagor unless it has been extinguished by the act of parties. The combined effect of Section 54 of the TransferF of Property Act and Section 17 of the Indian Registration Act is that a contract for sale in respect of immovable property of the value of more than one hundred rupees without registration cannot extinguish the equity of redemption. In India it is only on execution of theG conveyance and registration of transfer of the mortgagor's interest by registered instrument that the mortgagor's right of redemption will be extinguished. The conferment of power to sell without intervention of the Court in a mortgage deed by itself will not deprive the mortgagor of his right to H

MATHEW VARGHESE v. M. AMRITHA KUMAR & 775 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] redemption. The extinction of the right of redemption has A to be subsequent to the deed conferring such power. The right of redemption is not extinguished at the expiry of the period. The equity of redemption is not extinguished by mere contract for sale B 35. The mortgagor's right to redeem will survive until there has been completion of sale by the mortgagee by a registered deed. In England a sale of property takes place by agreement but it is not so in our country. The power to sell shall not be exercised unless and until notice in writing C requiring payment of the principal money has been served on the mortgagor ..Further Section 69(3) of the Transfer of Property Act shows that when a sale has been made in professed exercise of such a power, the title of the purchaser shall not be impeachable on the ground that no case had arisen to 68uthorize the. sale. Therefore, until the D sale is complete by registration the mortgagor does not lose right of redemption." (Emphasis added)

E 35. On a reading of the above paragraphs, we are able to discern the Ratio to the effect that a mere conferment of power to sell without intervention of the Court in the mortgage deed by itself will not deprive the mortgagor of his right to redemption, that the extinction of the right of redemption has Fto be subsequent to the deed conferring such power, that the right of redemption is not extinguished at the expiry of the period, that the equity of redemption is not extinguished by mere contract for sale and that the mortgagor's right to redeem will survive until there has been completion of sale by the mortgagee by a registered deed. The ratio is also to the effect G that the power to sell should not be exercised unless and until notice in writing requiring payment of the principal money has been served on the mortgagor. The above proposition of law of course was laid down by this Court while construing Section 60 of the T.P. Act. But as rightly contended by Mr. Shyam H 776 SUPREME COURT REPORTS [2014] 2 S.C.R.

A Divan, we fail to note any distinction to be drawn while applying the abovesaid principles, even in respect of the sale of SECURED ASSETS created by way of a secured interest in favour of the SECURED CREDITOR under the provisions of the SARFAESI Act, read along with the relevant Rules. We say B so, inasmuch as, we find that even while setting out.. the principles in respect of the redemption of a mortgage by .applying Section 60. of the T.P. Act, this Court has envisaged the situation where such mortgage deed providing for resorting to the sale of the mortgage property without the intervention of c the Court. Keeping the said situation in mind, it was held that the right of redemption will riot get extinguished merely at the expiry of the period mentioned in the mortgage deed. It was . also stated that the equity of redemption is not extinguished by mere contract for sale and the most important and vital principle D stated was that the mortgagor's right to redeem will survive until there has been completion of sale by the mortgagee by a registered deed .• The completion of sale, it is stated, can be held to be so unless and until notice in writing requiring payment of the principal money has been servea on the mortgagor. Therefore, it was held that until the sale is complete by E registration of sale, the mortgagor does not loose the right of redemption. It was also made clear that it was erroneous to suggest that the mortgagee would be acting as ·the agent of the mortgagor in selling the property.

F 36. When we apply the above principles stated with reference to Section 60 of the T.P. Act in respect of a secured interest in a SECURED ASSET in favour of the SECURED CREDITOR under the provisions of the SARFAESI Act and the relevant Rules applicable, under Section 13(1), a free hand is G given to a SECURED CREDITOR to resort to a sale without the intervention of the Court or Tribunal. However, under Section 13(8), it is clearly stipulated that the mortgagor, i.e. the borrower, who is otherwise called as a debtor, retains his full right to redeem the property by tendering all the dues to the H SECURED CREDITOR at any time before the date fixed for MATHEW VARGHESE v. M. AMRITHA KUMAR & 777 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

sale or transfer. Under sub-section (8) of Section 13, as noted A earlier, the SECURED ASSET should not be sold or transferred by the SECURED CREDITOR when such tender is made by the borrower at the last moment pefore the sale or transfer. The said sub-section also states that no further step should be taken by the SECURED CREDITOR for transfer or sale of that B SECURED ASSET. We find no reason to state that the principles laid down with reference to Section 60 of the T.P. Act, which is general in nature in respect of all mortgages, can have no application in respect of a secured interest in a SECURED ASSET created in favoar of a SECURED c CREDITOR, as all the above-stated principles apply in all fours in respect of a transaction as between the debtor and SECURED CREDITOR under the provisions of the SARFAESI Act. 37. Reliance was also placed upon the decision in Mardia D Chemicals Ltd. and others Vs. Union of India & others. -(2004) 4 SCC 311. In paragraph 54, while dealing with the contention raised on behalf of the SECURED CREDITOR that the right of redemption would be available to the mortgagor only . if the amourt due according to the SECURED -CREDITOR is E deposited, this Court held as under:

"54 .... Shri Sibal, however, submits that it is the amount due according to the secured creditor which shall have to be deposited to redeem the property. Maybe so, some F difference regarding the amount due may be there but it cannot be said that right of redemption of property is completely lost. In cases where no such dispute is there, the right can be exercised and in other cases the question of difference in amount may be kept open and got decided G before sale of property." (underlining is ours) 38. Here again we find that even if there were some difference in the amount tendered by the borrower while H 778 SUPREME COURT REPORTS [2014] 2 S.C.R. A exercising his right of redemption under Section 13(8), the question of difference in the amount should be kept open and can be decided subsequently, but on that score the right of redemption of the mortgagor cannot be frustrated. Elaborating the statement of law made therein, we wish to state that the B endeavour or the role of a SECURED CREDITOR in such a situation while resorting to any sale for the realization of dues of a mortgaged asset, should be that the mortgagor is entitled for some lenience, if not more to be shown, to enable the borrower to tender the amounts due in order to ensure that the c Constitutional Right to property is preserved, rather than it being deprived of. 39. In Ram Kishun (supra), paragraphs 13, 14 and 28 are relevant for our purpose, which are as under:

D "13. Undoubtedly, public money should be recovered and recovery should be made expeditiously. But it does not mean that the financial institutions which are concerned only with the recovery of their loans. may be permitted to behave like property dealers and be permitted further to E dispose of the secured assets in any unreasonable or arbitrary manner in flagrant violation of the statutory provisions. 14. A right to hold property is a constitutional right as well as a human right. A person cannot be deprived of his F property except in accordance with the provisions of a statute. (Vide Lachhman Dass v: Jagat Ram and State of M.P. v. Narmada Bachao Ando/an) Thus, the condition precedent for taking away someone's property or disposing of the secured assets, is that the authority must G ensure compliance with the statutory provisions. 28. In view of the above, the law can be 68ummarized to the effect that the recovery of the public dues must be made strictly in accordance with the procedure prescribed H by law. The liability of a surety is coextensive with that of MATHEW VARGHESE v. M. AMRITHA KUMAR & 779 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

the principal debtor. In case there are more than one surety A the liability is to be divided equally among the sureties for unpaid amount of loan. Once the sale has been confirmed it cannot be set aside unless a fundamental procedural error has occurred or sale certificate had been obtained by misrepresentation or fraud." B (Emphasis added) 40. The above principles laid down by this Court also makes it clear that though the recovery of public dues should be made expeditiously, it should be in accordance with the C procedure prescribed by law and that it should not frustrate a Constitutional Right, as well as the Human Right of a person to hold a property and that in the event of a fundamental procedural error occurred in a sale, the same can be set aside. D 41. Before taking up the facts of the case on hand, it is necessary to refer to certain other provisions referred to and relied upon by Mr. Shyam Divan, learned Senior Counsel appearing for the 8th Respondent. The learned Senior Counsel referred to Section 37 of the SARFAESI Act, Section 29 of the ERDDB Act and Rule 15 of the Income Tax Rules, 1962. The said provisions have to be noted in detail and therefore, the same are extracted hereunder: "Section 37 - Application of other laws not barred:-F

The provisions of this Act or the rules made thereunder shall be in addition to, and not in derogation of, the Companies Act, 1956 (1 of 1956), the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Securities and Exchange Board of India Act, 1992 (15 of G 1992), the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) or any other law for the time being in force. Section 29 - Application of certain provisions of Income-tax Act:- H 780 SUPREME COURT REPORTS [2014] 2 S.C.R. A The provisions of the Second and Third Schedules to the Income-tax Act, 1961 (43 of 1961), and the Income-tax (Certificate Proceedings) Rules, 1962, as in force from time to time shall, as far as possible, apply with necessary modifications as if the said provisions and the rules referred B to the amount of debt due under this Act instead of to the income-tax: Provided that any reference under the said provisions and the rules to the assessee shall be construed as a reference c to the defendant under this Act. Sch. II Part I Rule 15 - Adjournment or Stoppage of Sale:- (1) The Tax Recovery Officer may, in his discretion, adjourn aay .sale hereunder to a specified day and 'hour; and theD officer conducting any such sale may, in his discretion, adjourn the sale, recording his reasons for such adjournment:

Provided that, where the sale is made in, or within the E precincts of, the office of the Tax Recovery Officer, no such adjournment shall be made without the leave of the Tax Recovery Officer. (2) Where a sale of immovable property is adjourned under sub-rule (1) for a longer period than one calendar month,F a fresh proclamation of sale under this Schedule shall be made unless the defaulter consents to waive it. (3) Every sale shall be stopped if, before the lot is knocked down, the arrears and costs (including the costs of the G sale) are tendered to the officer conducting the sale, or proof is given to his satisfaction that the amount of such arrears and costs has been paid to the Tax Recovery Officer who ordered the sale." H 42. A close reading of Section 37 shows that the provisions MATHEW VARGHESE v. M. AMRITHA KUMAR & 781 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

of the SARFAESI Act or the rules framed thereunder will be in A addition to the provisions of the RDDB Act. Section 35 of the SAR FAES I Act states that the provisions of the SARFAESI Act will have overriding effect notwithstanding anything inconsistent contained in any other law for the time being in force. Therefore, reading Sections 35 and 37 together, it will have to be held that B in the event of any of the provisions of RDDB Act not being inconsistent with the provisions of the SARFAESI Act, the application of both the Acts, namely, SARFAESI Act and RDDB Act, would be complementary to each other. In this context reliance can be placed upon the decision in Transcore Vs. c Union of India and another reported in (2008) 1 sec 125. In paragraph 64 it is stated as under after referring to Section 37 of the SARFAESI Act.

" ....... According to American Jurisprudence, 2d, Vol. 25, p. 652, if in truth there is only one remedy, then the doctrine D of election does not apply. In the present case, as stated above. the NPA Act is an additional remedy to the ORT Act. Together they constitute one remedy and. therefore. the doctrine of election does not apply. Even according to Snell's Principles of Equity (31st Edn., p. 119), the doctrine E of election of remedies is applicable only when there are two or more co-existent remedies available to the litigants at the time of election which are repugnant and inconsistent. In any event. there is no repugnancy nor inconsistency between the two remedies. therefore, the F doctrine of election has no application." (Emphasis added) 43. A reading of Section 37 discloses that the application of SARFAESI Act will be in addition to and not in derogation G of the provisions of the RDDB Act. In other words, it will not in any way nullify or annul or impair the effect of the provisions of the RDDB Act. We are also fortified by our above statement of law as the HEADING of the said Section also makes the position clear that application of other laws are not barred. The H 782 SUPREME COURT REPORTS [2014] 2 S.C.R.

A effect of Section 37 would, therefore, be that in addition to the provisions contained under the SARFAESI Act, in respect of proceedings initiated under the said Act, it will be in order for a party to fall back upon the provisions of the other Acts mentioned in Section 37, namely, the Companies Act, 1956, B the Securities Contracts (Regulation) Act, 1956, the Securities and Exchange Board of India Act, 1992, the Recovery of Debts Due to Banks and Finances Institutions Act, 1993, or any other law for the time being in force. On this aspect, it would be apposite to refer to a principle set down in Eastern Counties c etc. Railway Vs. Marriage reported in (1861) 9 HLC 32, as stated in Craies on Statute Law, Seventh Edition, p.207. The proposition of law as regards the HEADINGS of a provision has been succinctly stated as under: "These various headings", "are not to be treated as if they D were marginal notes, or were introduced into the Act merely for the purpose of classifying the enactments. They constitute an important part of the Act itself, and m~y be read not only as explaining the sections which immediately follow them, as a preamble to a statute may be looked to E explain its enactments, but as affording as it appears to me a better key to the constructions of the sections which follow them than might be afforded by the mere preamble." (Emphasis added)

F 44. We can also rely upon a similar principle declared by this Court by His Lordship Justice Subba Rao, as His Lordship then was, speaking for the Bench in Bhinka and others Vs. Charan Singh reported in AIR 1959 SC 960. In paragraph 15, the learned Judge after referring to the HEADING of Section G 180 of the UP Tenancy Act, (17 of 1939) held as under. "The heading reads thus: "Ejectment of person occupying land without Title." "Maxwell On Interpretation of Statutes", 10th Edn., gives H the scope of the user of such a heading in the MATHEW VARGHESE v. M. AMRITHA KUMAR & 783 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] interpretation of a section thus, at p.50: A "The headings prefixed to sections or sets of sections in some modern statutes are regarded as preambles to those sections. They cannot control the plain words of the statute but they may explain ambiguous words". B

45. Reference to the above principles laid down in the various decisions also supports our conclusion that the application of the SARFAESI Act will be in addition to, in the present case to Section 29 of the RDDB Act. Once we steer clear of the said position without any hesitation, it can be held C that whatever stipulations contained in Section 29 as regards the application of certain provisions of the Income Tax Act, 1961 in particular Schedule 2 Part I Rule 15 of the Income Tax Rules, 1962 for effecting a sale or transfer would apply automatically. We have already extracted Section 29 of the RDDB Act, as D well as Schedule 2 Part I Rule 15 of the Income Tax Rules, 1962. Therefore, what is to be considered is as to what is the mode prescribed under the above provisions, namely, Rule 15 prescribed under Schedule 2 Part I of the Income Tax Rules, 1962. E

46. Section 29 of the RDDB Act is an enabling provision under which the Second and Third schedule to the Income Tax Act, 1961 (43 of 1961) and the Income Tax Rules, 1962 can be applied as far as possible with necessary modifications as Fif the provisions and the rules are referable to the DEBT DUE, instead of the income tax due. Therefore, fictionally, by virtue of Section 29 of the RDDB Act, the mode and method by which a recovery of income tax can be resorted to under the Second and Third Schedule to the Income Tax Act and the Income Tax Rules, 1962 have to be followed. Therefore, a reading Section G 37 of the SARFAESI Act and Section 29 of the RDDB Act, the only aspect which has to be taken care of is that while applying the procedure prescribed under Rule 15 of the Income Tax Rules, 1962, no conflict with reference to any of the provisions of the SARFAESI Act, takes place. H 784 SUPREME COURT REPORTS [2014] 2 S.C.R.

A 47. Mr. Shyam Divan, learned Senior Counsel, also referred to Order XXI Rule 64 to 69 of the Civil Procedure Code in support of his submission that by virtue of Section 37 of SARFAESI Act, as it states that the provisions of SARFAESI Act will be in addition to and not in derogation of any other law B for time being in force apart from Companies Act, RDDB Act etc., the provisions contained in CPC can also be imparted to support the stand of the Respondents 1 & 2. Since we have held that by applying Section 37 of SARFAESI Act, read along with Section 29 of the RDDB Act, the requirement of the C statutory prescription under Section 13(8) read along with Rule 8 and 9(1) of the Security Interest Rule would be sufficiently supported, we do not find any necessity to delve into the submission made by referring to Rules 64 to 69 of Order XXI CPC.

D 48. Keeping the said basic principle in applying the above provisions in mind, when we refer to Rule 15 of the Income Tax Rules, 1962, in the first place it will have to be stated that a reading of the said rule does not in any way conflict with either Section 13(8) of the SARFAESI Act or Rules 8 and 9 of the E Rules, 2002. As far as sub-rule (1) of Rule 15 is concerned, it only deals with the discretion of the Tax Recovery Officer to adjourn the sale by recording his reasons for such adjournment. The said Rule does not in any way conflict with either Rules 8 or 9 or Section 13, in particular sub-section (1) or sub-section F (8) of the SARFAESI Act. Therefore, to that extent there is no difficulty in applying Rule 15. As far as sub-rule (2) is concerned, the same is clear to the effect that a sale of immovable property once adjourned under sub-rule (1) for a longer period than one calendar month, a fresh proclamation of sale should be made G unless the defaulter consents to waive it. The said sub-rule alsp does not conflict with any of the provisions of the SARFAESI Act, in particular Section 13 or Rules 8 and 9. In fact there is no provision relating to grant of adjournment or issuance of a fresh proclamation for effecting the sale after the earlier date H of sale was not adherered to in the SARFAESI Act. In such MATHEW VARGHESE v. M. AMRITHA KUMAR & 785 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

circumstances going by the prescription contained in Section A 37 of the SARFAESI Act, as we have reached a conclusion that the provision contained in Section 29 of the RDDB Act will be in addition to and not in derogation of the provisions of the SARFAESI Act, the provisions contained in Rule 15, which is applicable by virtue of the stipulation contained in Section 29 B of the RDDB Act, whatever stated in sub-rule (2) of Rule 15 should be followed in a situation where a notice of sale notified as per Rules 8 and 9(1) of the Securitisation Trust Rules, read along with Section 13(8) gets postponed. In our considered view such a construction of the provisions, namely, Sections 37, c 13(8) and 37 of the SARFAESI Act, read along with Section 29 with the aid of Rule 15 could alone be made and in no other manner.

49. We, therefore, hold that unless and until a clear 30 days notice is given to the borrower, no sale or transfer can be D resorted to by a SECURED CREDITOR. In the event of any such sale properly notified after giving 30 days clear notice to the borrower did not take place as scheduled for reasons which cannot be solely attributable to the borrower, the SECURED CREDITOR cannot effect the sale or transfer of the SECURED E ASSET on any subsequent date by relying upon the notification issued earlier. In other words, once the sale does not take place pursuant to a notice issued under Rules 8 and 9, read along with Section 13(8) for which the entire blame cannot be thrown on the borrower, it is imperative that for effecting the sale, the F procedure prescribed above will have to be followed afresh, as the notice issued earlier would lapse. In that respect, the only other provision to be noted is sub-rule (8) of Rule 8 as per which sale by any method other than public auction or public tender can be on such terms as may be settled between the parties G in writing. As far as sub-rule (8) is concerned, the parties referred to can only relate to the SECURED CREDITOR and the borrower. It is, therefore, imperative that for the sale to be effected under Section 13(8), the procedure prescribed under Rule 8 read along with 9(1) has to be necessarily followed, H 786 SUPREME COURT REPORTS [2014] 2 S.C.R.

A inasmuch as that is the prescription of the law for effecting the sale as has been explained in detail by us in the earlier paragraphs by referring to Sections 13(1 ), 13(8) and 37, read along with Section 29 and Rule 15. In our considered view any other construction will be doing violence to the provisions of the B SARFAESI Act, in particular Section 13(1) and (8) of the said Act.

50. Having pronounced the legal position as above, when we refer to the facts of the present case, the initial sale was C notified to take place on 25.09.2007. The paper publication was made on 23.08.2007. Therefore, applying Rule 9(1) read along with the proviso to sub-rule (6) of Rule 8, there can be no quarrel as to the procedure followed in effecting the publication for resorting to sale on 25.09.2007. When it comes to the question of the intimation to the borrower as required D under sub-rule (6) of Rule 8, we find that admittedly Respondents 1 and 2 were informed by the 4th Respondent-Bank only on 30.08.2007. Therefore, as the sale date was 25.09.2007 it did not fulfill the mandatory requirement of 30 clear days notice to the borrower as stipulated under sub-rule (6) of E Rule 8. In fact, on this score itself it can be held that if the sale had been effected on 25.09.2007, it would not have been in accordance with Section 13(8) of the SARFAESI Act, read along with Rules 8 and 9(1). But at the intervention of the Court, namely, the orders passed in Writ Petition 27182 of 2007 dated F 20.09.2007, the sale date fixed on 25.09.2007 was adjourned by six weeks. In any case, the sale was not effected even after the six weeks period expired as directed in the said Order dated 20.09.2007. The Securitisation Application No.20 of 2007, came to be disposed of by the ORT only on 27.12.2007. G 51. Therefore, once the Securitisation Application of the borrowers, namely, Respondents 1 and 2 was dismissed on 27.12.2007, even assuming that there was no impedimer.it for the SECURED CREDITOR, namely, the 4th Respondent-Bank to resort to sale under the provisions of the SARFAESI Act, as H

MATHEW VARGHESE v. M. AMRITHA KUMAR & 787 ORS. [FAKKIR MOHAMED IBRAHIM KALIF.ULLA, J.]

held by us in the earlier paragraphs, there should have been a A fresh notice issued in accordance with Rules 8(6) and 9(1) of the Rules, 2002. Unfortunately, the 4th Respondent-Bank stated to have effected the sale on 28.12.2007 by accepting the tender of the Appellant and by way of further process, directed the Appellant to deposit the 25% of the amount on that very day B and also directed to deposit the balance amount within 15 days, which was deposited by the Appellant on 11.01.2008. In fact, after the deposit of the 25% of the amount on 28.12.2007, the 4th Respondent-Bank stated to have confirmed the sale in favour of the Appellant on 31.12.2007. After the deposit of the c balance amount on 11.01.2008 by coml'.Tlunication dated 02.02.2008, the 4th Respondent-Bank informed the 1st and 2nd Respondents about the confirmation of sale and thereby, provided no scope for Respondents 1 and 2 to tender the dues of the SECURED CREDITOR, namely, the 4th Respondent- D Bank with all charges, expenses etc., as has been provided under Section 13(8) of the SARFAESI Act. Therefore, the whole procedure followed by the 4th Respondent-Bank in effecting the sale on 28.12.2007 and the ultimate confirmation of the sale on 11.01.2008, stood vitiated as the same was not in conformity with the provisions of the SARFAESI Act and the E Rules framed thereunder. Though, such a detailed consideration of the legal issues was not made by the Division Bench while setting aside the sale effected in favour of the Appellant, having regard to the construction of the provisions of the SARFAESI Act, the RDDB Act and the relevant Rules, F we are convinced that the Judgment of the Division Bench dated 08.03.2010, passed in Writ Appeal 1·555 of 2009, was perfectly justified and we do not find any infirmity with the same.

52. We now take up for consideration the correctness of G the Order of the Division Bench dated 18.06.201 O in I.A. 437 of 2010 in Writ Appeal 1555 of 2009 and the order dated 08.07.2010 in l.A.507 of 2010 in Writ Appeal 1555 of 2009. Though we have held that the Judgment of the Division Bench in Writ Appeal 1555 of 2009 cannot be found fault with, when H 788 SUPREME COURT REPORTS [2014] 2 S.C.R. A we examined the subsequent Orders dated 18.06.201 O and 08.07.2010 in l.A.437 of2010 and l.A.507 of 2010, we are of the view that in the peculiar facts of this case and the ultimate directions issued by the Division Bench in its marn Judgment of 08.03.2010 in Writ Appeal 1555 of 2009, the said Orders B could not have been validly issued. 53. In the foremost, it will have to be noted that the Olvision Bench of the High Court while allowing the Writ Appeal in its order dated 08.03.2010, held as under: c "(i} The sale by the Bank of the appellant's property in favour of the fifth respondent will stand set aside and the sale deed shall stand invalidated on condition that appellant gives a DD for Rs.2 crores from a local Branch of a Nationalised Bank in D favour of the fifth respondent and the same will be handed over to him within two months from now. If payment is not made as above, sale in favour of the fifth respondent will stand confirmed and Writ Appeal will stand dismissed.

E (ii} If appellant makes payment as above, and sale gets cancelled by operation of judgment, then on giving DD the fifth respondent will hand over original sale deed obtained by him from the Bank to the appellant for the appellant to produce before the F Sub Registry and revenue authorities for cancellation of registration, mutation, if any effected, and for restoration of property in the records of the Sub Registry and revenue authorities in favour of the appellant. G (iii} The Bank will remit the excess amount available with them to the Tax Recovery Officer in pursuance to the demand to be credited in 'the account of the appellant, and it is for the appellant to claim refund, H if eligible for him. MATHEW VARGHESE v. M. AMRITHA KUMAR & 789 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] (iv) We l@ave it open to the appellant to claim refund A of stamp duty, if refund is eligible. However, we make it clear that in view of the above judgment, if there is eligibility for refund of stamp duty, the same, should be the appellant." B

54. In the High Court, the Appellant herein was arrayed as the 5th Respondent. The Division Bench taking into account the amount remitted by the Appellant, namely, Rs.1,27,00, 101/- and the stamp duty and registration charges of Rs.23,00,000/- in all Rs.1,50,00, 101 /- directed Respondents 1 and 2 to pay a lump sum of Rs.2,00,00,000/- to the Appellant for cancelling the C sale. The amount of 2,00,00,000/- was arrived at taking into account the rate of interest at 18% per annum and the stamp duty and registration charges spent by the Appellant. However, the direction number (i) made it clear that while the sale in favour of the Appellant would stand set aside and invalidated on a D condition that Respondents 2 and 3 forwarded a Demand Draft of Rs.2,00,00,000/- from a local branch of a Nationalised Bank in favour of the Appellant by handingI it over to him within 2 months from the date of the Order, namely, 08.03.2010, made it tacitly clear that if the payment was not made as directed, E the sale in favour of the Appellant would stand confirmed and the writ appeal would stand dismissed. Therefore, subject to the compliance of the directions contained in sub-para (i) of paragraph 5, the cancellation of the sale in favour of the Appellant was ordered. Under sub-para (ii) of paragraph 5, F once the sale gets cancelled by virtue of the operation of the Judgment, namely, by handing over the Demand Draft in favour of the Appellant, the original sale deed obtained by the Appellant was directed to be produced before the Sub-Registrar and other Revenue Authorities for the cancellation of G registration/mutation etc. On such compliance of the said direction contained in sub-para (ii), the restoration of the property in the records of the sub-registry and revenue authorities were also directed to be effected in favour of Respondents 1 and 2. Under sub-para (iii) of paragraph 5, the H

SUPREME COURT REPORTS [2014] 2 S.C.R. 790 A 4th Respondent-Bank was directed to remit the excess amount available with it, i.e over and above the dues to the bank to the Tax Recovery Officer, in pursuance to their demand by crediting into the account of Respondents 1 and 2, with further liberty to Respondents 1 and 2 to claim for refund if they were eligible. B Lib~rty was also given to Respondents 1 and 2 to claim refund of stamp duty if eligible. 55. The said period of two months stipulated in sub-para

(i) of paragraph 5 expired by 08:05.2010. It was pointed out to us by Mr. Krishnan, learned Senior Counsel for the Appellant C that the very application seeking further six weeks time from 08.05.2010 for giving the Demand Draft of Rs.2,00,00,000/- to the Appellant as per the Judgment dated 08.03.2010, was filed only on 10.06.2010 and that the Division Bench thereafter passed the present Order dated 18.06.2010 in l.A.437, i.e. D more than a month after the expiry of the initial two months period, ·namely, 08.05.2010. Before adverting to the details of the Order dated 18.06.2010 passed in I.A. 437 pf 2010, at the very out:;et it will have to be stated that having regard to the specific direction contained in sub-para (i) and (ii) of para 5 of E the Judgment dated 08.03.2010 in Writ Appeal 1555 of 2009, by 08.05.2010, when Respondents 1 and 2 failed to hand over the Demand Draft of Rs.2,00,00,000/-, as directed by the Division Bench to the Appellant, the Writ Appeal stood dismissed without any further reference to anyone, even to the F Court. In fact, since the application for extension, namely, I.A. 437 of 2010 came to be filed only on 10.06.2010, it should be held that there was no right in Respondents 1 and 2 or for the 8th Respondent herein to seek for any further indulgence before the Division Bench for further extension of time. It is relevant to G note that the two months period expired on 08.05.2010. Thereafter, Respondents 1 and 2 took their own time to file the application for extension, namely, after more than 30 days, by which time the writ appeal stood dismissed and there was no right available with Respondents 1 and· 2 or with the 8th H Respondent herein to seek for any relief for claiming any right \

MATHEW VARGHESE v. M. AMRITHA KUMAR & 791 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] in favour of the 8th Respondent, much less for cancellation of A the sale already effected in favour of the Appellant herein.

56. When we refer to the said order dated 18.06.2010 to examine the reasons which weighed with the Division Bench, we find that the sum and substance of the grievance expressed 8 on behalf of Respondents 1 and 2 herein was that they had to raise funds by arranging for the sale of the very same SECURED ASSET, which took time as many buyers were reluctant to come forward because of the chance of continued litigation. By making reference to the stand of Respondents 1 C and 2, the Division Bench without anything more, accepted the said reason and by allowing the I.A. permitted the 8th Respondent herein to deposit 2,03,00,000/- by 19.06.2001 and on such deposit it held that the time granted for payment in terms of the Judgment dated 08.03.2010, stood extended till 20.06.2010. It further held that on such deposit being made, the D sale made by the 4th Respondent-Bank in favour of the Appellant would be cancelled and the 4th Respondent should effect a sale in favour of the 8th Respondent herein. The other directions contained in sub-para (iv) of para 5 was maintained. In the subsequent l.A.507 of 2010 the Division Bench directed E the 4th Respondent-Bank to execute the sale in favour of the 8th Respondent herein, taking note of the fact of deposit of Rs.2,03,00,000/- by the 8th Respondent with the 4th Respondent-Bank. F

57. Be that as it may, after the Order dated 18.06.2010 and 08.07.2010, the Appellant filed the Special Leave Petition in this Court on 26.07.2010 and the Special Leave Petition came up for orders on 30.07.2010. While directing the Registry to list the SLP on the notified date, the parties were directed G to maintain status quo with regard. to the impugned order of the High Court dated 08.03.2010 till then. Thereafter, on 09.08.2010, service of notice on the Respondent was dispensed with since a caveat was entered on behalf of the 1st and 8th Respondents. While granting time for filing counter H 792 SUPREME COURT REPORTS [2014] 2 S.C.R. A affidavit, as well as rejoinder, the Interim Order dated 30.07.2010, was directed to be continued. Vide Order dated 08.08.2013, while declining to vacate Status Quo Order dated 30.07.2010, the Special Leave Petition itself was directed to be listed for final hearing. Though the 8th Respondent is stated B to have deposited the sum of Rs.2,03,00,000/- with the 4th Respondent-Bank, as per the Order dated 18.06.201 O in IA No.437 of 2010, the other directions in the main Order dated 08.03.2010 in Writ Appeal No.1555 of 2009 and the subsequent directions contained in the Orders dated c 18.06.2010 and 08.07.2010, were not carried out. The sale which was already fixed in favour of the Appellant continued to remain in force and the sum of Rs.2,03,00,000/- deposited by the 8th Respondent remains with the 4th Respondent-Bank.

58. In the light of our conclusion that the Judgment passed D in Writ Appeal No.1555 of 2009 dated 08.03.2010, was a self contained one and due to the failure of the 1st and 2nd Respondents in not handing over the Demand Draft for Rs.2,00,00,000/- to the Appellant within the stipulated time limit, namely, on or before 08.06.2010, the sale effected in favour of E the Appellant stood confirmed. Inasmuch as we have found there was absolutely no justifiable grounds for the Division Bench to grant further time in its Order dated 18.06.2010, we are of the view that it will be travesty of justice if the earlier Judgment dated 08.03.2010, which worked itself out on F 08.05.2010, is to be reversed for the flimsy grounds raised by the 1st and 2nd Respondents that they could not raise funds in spite of two months time granted to them for paying a sum of Rs.2,00,00,000/- in favour of the Appellant. We have also found that while the time granted by the Division Bench expired by G 08.05.2010, the application for extension was filed 40 days later, i.e. on 10.06.2010. Therefore, for such a recalcitrant attitude displayed by Respondents 1 and 2 in respect of a litigation which involved very high stakes, the Division Bench should not have come for their rescue in the absence of any H weighty reasons. The reason adduced on behalf of Respondent MATHEW VARGHESE v. M. AMRITHA KUMAR & 793 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

1 and· 2 is the standard reason which any party used to plead A while seeking for extension of time. Since very valuable rights of the Appellant were at stakes and the Order of the Division Bench also remained in force, in so far as it related to the cancellation of the sale deed, which existed in favour of the Appellant till 08.05.2010 and by virtue of the non-compliance B of the conditions imposed in the said Judgment dated 08.03.2010 by the 1st and 2nd Respondents the ownership rights of the Appellant got crystallized on and after 09.05.2010, we fail to find any justification at all for the Division Bench to interfere with the said right in such a casual manner by c accepting the flimsy reasons of the 1st and 2nd Respondents. At the risk of repetition it will have to be stated that the ownership right which got crystallized in favour of the Appellant as on 09.05.2010, could not have been snatched away by the Division Bench by passing the present impugned order dated D 18.06.2010 and 08.07 .2010. Whatever stated by us with reference to the right of ownership of the 1st and 2nd Respondents with reliance upon Article 300A of the Constitution / would equally apply to the Appellant as well in such a situation. Therefore, such a right which accrued in favour of the Appellant E ought not to have been interfered with by the Division Bench and the Orders passed in the interim application filed at the instance of the 1st and 2nd Respondents, along with the 8th Respondent herein are not justified°' Therefore, while upholding the Judgment of the Division Bench dated 08.03.2010 passed F in Writ Appeal 1555 of 2009, for the reasons stated herein, the Orders dated 18.06.2010 and 08.07.2010 passed in I.A. Nos.437 and 507 of 2010 are set aside.

59. Though we have found good grounds in favour of the Appellant to set at naught the above Orders passed in I.A. G Nos.437 and 507 of 2010, we cannot also ignore one other very relevant factor, namely, that the value of the property which was knocked out in favour of the Appellant in a sum of Rs.1,27,00, 101/- by confirming the sale by the 4th Respondent-Bank on 31.12.2007 and 11.01.2008, the same was found to H 794 SUPREME COURT REPORTS [2014] 2 S.C.R. A be not in accordance with the provisions of the SARFAESI Act. Since the proper procedure for effecting the sale was not followed, it will have to be held that the price fetched through the Appellant cannot be held to be the correct price for the mortgaged property involved in these proceedings. Further, the B very fact that in the year 2010 the property could fetch Rs.2,03,00,000/-, we are of the view that in all fairness even while confirming the Order of the Division Bench, by which the sale in favour of the Appellant came to be confirmed, the difference in the sale price should be directed to be paid by c the Appellant. While the price paid by the Appellant was Rs.1,27,00, 101/-, the price ultimately fetched at the instance of the 1st and 2nd Respondents was Rs.2,03,00,000/-. Therefore, after giving credit to Rs.1,27,00,000/-, the Appellant would still be liable to pay a further sum of Rs.76,00,000/- to the 1st and 2nd Respondents.0

60. Accordingly, while disposing of these appeals as directed above, we pass the following Order: (A) The 4th Respondent-Bank shall refund a sum of E Rs.2,03,00,000/- deposited by the 8th Respondent, along with 18% interest. Such refund shall be made by the 4th Respondent to the 8th Respondent by way of Bank's Pay Order within two weeks from the date of production of copy of this Order. F (B) The 4th Respondent-Bank having adjusted its due from and out of the sale consideration paid by the Appellant, shall pay the balance amount to the Tax Recovery Officer pursuant to the demand, which is to be credited in the account of the Appellant. Such deposit shall also be made G along with accrued interest @ 18% per annum while making the deposit. It is for the Respondents 1 & 2 to claim refund if they are eligible for the same by approaching the concerned Authority under the Income Tax Act and in the manner known to Law. H MATHEW VARGHESE v. M. AMRITHA KUMAR & 795 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] (C) The Appellant shall deposit the balance sale A consideration determined by us in a sum of Rs. 76,00,000/

- with the 4th Respondent-Bank, which shall be kept in an interest bearing account. If there is any further demand by way of tax recovery, it would be open for the Tax Recovery Officer concerned to raise such a demand and forward it B to the 4th Respondent-Bank and on such demand being made, the 4th Respondent-Bank shall deposit the same to the credit of the Tax Recovery Officer in the name of the 1st and 2nd Respondents and it will be for the 1st and 2nd Respondents to claim for refund if eligible. If there is no C tax due, the 4th Respondent - Bank shall release the said sum of Rs.76,00,000/- forthwith on deposit being made by the Appellant to Respondents 1 and 2. (D) Such deposit of Rs. 76,00,000/- shall be made by the Appellant within four weeks from the date of receipt of the D copy of this Judgment. As and when the Appellant deposit the sum of Rs.76,00,000/- towards the sale price of the property transferred in its favour, necessary receipt for the said payment by way of additional sale price shall be executed by the 4th Respondent-Bank along with the 1st E and 2nd Respondents and whatever stamp duty and registration charges payable for that purpose shall be borne by the Appellant.

(E) If the Appellant fails to deposit the balance sale F consideration of Rs.76,00,000/- within the stipulated time limit, as directed in paragraph 60(0), the sale already effected by the 4th Respondent-Bank shall stand cancelled automatically without any further reference to this Court. Eventually, the sale consideration deposited by the Appellant with the 4th Respondent-Bank shall be refunded G to him after deducting the amount due and payable by the borrower as on the date of previous sale i.e. 31.12.2007 and the balance amount alone shall be refunded to the Appellant. Further the 4th Respondent-Bank shall bring the H 796 SUPREME COURT REPORTS [2014] 2 S.C.R.

A property for auction afresh, following the provisions of the SARFAESI Act. Thereafter, from and out of the money realized from the said sale, the 4th Respondent-Bank shall refund the amount retained by it towards the amounts due from the borrower to the Appellant. After paying the said B amount to the Appellant, it shall arrange for refund of the balance amount to the 1st and 2nd Respondents after meeting whatever tax liability to the Income Tax Department or any other statutory dues for which any demand was already raised and pending with the 4th Respondent-Bank. C 61. With the above directions, appeal filed against the Judgment dated 08.03.2010 passed in Writ Appeal No.1555 of 2009 stands dismissed and appeals filed against the Orders dated 18.06.2010 and 08.07.2010, passed in I.A. Nos.437 of 2010 and 507 of 2010 in Writ Appeal No.1555 of 2009 stand D allowed. No costs. D.G. Appeals disposed of.

[2014] 2 S.C.R. 736 A MATHEW VARGHESE v. M. AMRITHA KUMAR & ORS. (Civil Appeal Nos. 1927-1929 of 2014) FEBRUARY 10, 2014 B [A.K. PATNAIK AND FAKKIR MOHAMED IBRAHIM KALIFULLA, JJ.] SEGUR/TISA T/ON AND RECONSTRUCT/ON OF C FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002: s.13(1) - Held: Any secured creditor may be entitled to enforce the secured asset created in its favour on its own without resorting to any court proceedings or approaching the0 Tribunal, however, such enforcement should be in conformity with the other provisions of the SARFAESI Act.

s.13(8) - Right of borrower - Held: There is a valuable right recognized and asserted in favour of the borrower, who E is the owner of the secured asset and who is extended an opportunity to take all efforts to stop the sale or transfer till the last minute before which the said sale or transfer is to be effected - Such an ownership right is a Constitutional Right protected under Article 300A of the Constitution, which F mandates that no person shall be deprived of his property save by authority of law - Therefore, de hors, the extent of borrowing made and whatever costs, charges were incurred by the secured creditor in respect of such borrowings, when it comes to the question of realizing the dues by bringing the G property entrusted with the secured creditor for sale to realize money advanced without approaching any Court or Tribunal, the secured creditor as a trustee cannot deal with the said property in any manner it likes and property. can be disposed of only in the manner prescribed in the SARFAESI Act -H 736 MATHEW VARGHESE v. M. AMRITHA KUMAR & 737 ORS.

Therefore, the creditor should ensure that the borrower was A clearly put on notice of the date and time by which either the sale or transfer will be effected in order to provide the required opportunity to the borrower to take all possible steps for retrieving his property or at least ensure that in the process of sale the secured asset derives the maximum benefit and B the secured creditor or anyone on its behalf is not allowed to exploit the situation of the borrower by virtue of the proceedings initiated under the SARFAESI Act - Constitution of India, 1950 - Article 300A. s.13(8) - Conflict with r.15(1) of Income Tax Rules, 1962 C - Held: r. 15 of the Income Tax Rules, 1962 does not in any way conflict with either s.13(8) of the SARFAESI Act or rr.8 and 9 of the Security Interest (Enforcement) Rules, 2002 - The sub-rule (1) of r. 15 only deals, with the discretion of the Tax. Recovery Officer to adjourn the sale by recording his reasons· D for such adjournment - As far as sub-rule (2) is concerned, the same is clear to the effect that a sale of immovable property once adjourned under sub-rule (1) for a longer period than one calendar month, a fresh proclamation of sale should be made unless the defaulter consents to waive it - The said E sub-rule also does not conflict with any of the provisions of the SARFAESI Act, in particular s.13 or rr.8 and 9.

s.35 - Non obstante clause - Held: s.35 states that the provisions of the SARFAESI Act will have overriding effect F notwithstanding anything inconsistent contained in any other law for the time being in force - Therefore, reading s.35 and s.37 together, it will have to be held that in the event of any of the provisions of RDDB Act not being inconsistent with the provisions of the SARFAESI Act, the application of both the G Acts, namely, SARFAESI Act and RDDB Act, would be complementary to each other - The effect of s.37 would, therefore, be that in addition to the provisions contained under the SARFAESI Act, in respect of proceedings initiated under the said Act, it will be in order for a party to fall back upon the H 738 SUPREME COURT REPORTS [2014] 2 S.C.R. A provisions of the other Acts mentioned in s.37 namely, the Companies Act, 1956, the Securities Contract& (Regulation) Act, 1956, the Securities and Exchange Board of India Act, 1992, the Recovery of Debts Due to Banks and Finances Institutions Act, 1993, or any other law for the time being in B forc.e - Recovery of Debts Due to Banks and Finances Institutions Act, 1993. SECURITY INTEREST (ENFORCEMENT) RULES, 2002:

C rr.8 and 9 - Procedure to be followed by a secured creditor while resorting to a sale after the issuance of the proceedings u/ss.13(1) to (4) of the SARFAESI Act - Held: Reading sub-rule (6) of r.8 and sub-rule (1) of r.9 together, the service of individual notice to the borrower, specifying clear D 30 days time gap for effecting any sale of immovable secured asset is a statutory mandate - No sale should be affected before the expiry of 30 days from the date on which the public notice of sale is published in the newspapers -Therefore, the requirement u/r.8(6) and r.9(1) contemplates E a clear 30 days individual notice to the borrower and also a public notice by way of publication in the newspapers. rr.8 and 9 - Sale effected in favour of appellant without complying with the mandatory requirement of 30 days notice to the borrower - High Court set aside the sale and passed F interim order directing the borrower to furnish demand draft of Rs.2 crores in favour of appellant and in case of non-payment directed to confirm sale in favour of appellant -Payment not made by borrowers - Request by borrowers for six weeks time to arrange money - By another interim order, G High Court extended time and permitted 8th respondent to deposit Rs.2.03 crores and on such deposit to cancel sale in favour of appellant - Held: Since very valuable rights of the appellant were at stakes, there was no justification at all for High Court to interfere with the said right in such a casual H manner by passing interim orders on flimsy grounds raised MATHEW VARGHESE v. M. AMRITHA KUMAR & 739

ORS. by borrowers - Ownership right which accrued in favour bf A appellant ought not to have been interfered with by the High Court - Interim orders set aside - Value of the property was knocked out in favour of the appellant for Rs. 1. 27 crores -Since proper procedure for effecting sale was not followed, the price fetched through the appellant cannot be held to be the B correct price for the mortgaged property - In the year 2010 the property could fetch Rs.2.03 crores while the price paid by the appellant was Rs.1.27 crores - Therefore, after giving credit of Rs.1.27 crores, the appellant directed to pay a further sum of Rs. 76 lacs to the borrowers. c Respondents no.1 and 2 stood guarantors in respect of credit facility for Rs.30 lacs granted by the 4th respondent bank and created an equitable mortgage in favour of bank by depositing the title deeds of their property. The transaction became non performing asset D and the respondent bank filed recovery suit. The respondent bank also issued a notice under Section 13(2) of SARFAESI Act for Rs. 77 lacs. The respondents no.1 and 2 filed a Securitisation Application before the ORT challenging the possession notice issued by E respondent bank and also restraining the bank from evicting them. The attempts for one time settlement between them failed and the bank withdrew its offer of OTS of Rs.55 lacs.

F On 14.8.2007, the 4th respondent bank issued a notice to Respondents no.1 and 2 of its intention to sell the property under Rule 8(6) of the Security. Interest (Enforcement) Rules, 2002 by fixing reserve price of Rs.1.25 crores. The notice was issued in two newspapers G inviting tenders-cum-auction from public. The appellant and one M/s KC submitted their tenders. Respondents no.1 and 2 filed a writ petition before the High Court. The single judge of the High Court disposed of the writ petition directing ORT to hear the H 740 SUPREME COURT REPORTS [2014] 2 S.C.R.

A parties and dispose of cases without delay and directed respondent bank to defer the sale posted on 25.9.2007 by six weeks by imposing condition on respondents no.1 and 2 to deposit Rs.10 lacs before the date of sale. On 27.12.2007, the ORT dismissed the Securitisation Application. On 28.12.2007, the 4th Respondent-Bank9 accepted the tender of Rs.1.27 crores offered by the appellant and asked the appellant to deposit 25% of the amount on that day itself and pay the balance amount within 15 days. The appellant complied with it. The C respondent bank confirmed the sale in favour of the appellant. Respondents no.1 and 2 were informed about the confirmation of sale and were directed to collect the balance amount available with the 4th Respondent-Bank. Respondents no.1 and 2 filed a writ petition challenging the vires of the Rules, 2002 on the ground that it violated D their right of redemption by denying them adequate opportunity and time to repay the borrowed sum and the action of the Bank in having acted surreptitiously in selling the property without informing them. The said writ petition was dismissed by the single judge on the ground E that the Respondents no.1 and 2 got an alternative efficacious remedy available under the SARFAESI Act. Respondents no.1 and 2 filed writ appeal. In the meantime, on 24.06.2009, the 4th Respondent-Bank transferred the property in favour of the appellant under F a duly registered certificate of sale.

By the impugned order, the Division Bench set aside the sale on the ground that it was not conducted in a fair and proper manner and imposed condition on G Respondents 1 and 2 to furnish a Demand Draft of Rs.2 crores in favour of the appellant and if payment is not made, as directed, the sale in favour of the appellant would stand confirmed and the writ appeal would automatically stand dismissed. In the event of the H payment of Rs.2 crores, the appellant was directed to MATHEW VARGHESE v. M. AMRITHA KUMAR & 741 ORS. hand over the original sale deed obtained by him from the A Bank to enable Respondents no.1 and 2 to approach the Sub-Registrar and Revenue Authorities for cancellation of registration, consequent mutation, etc.

Respondents no.1 and 2 did not make the payment 8 within the said date, as directed by the Division Bench. Instead an application was filed by the Respondents 1 and 2 seeking further six weeks time to effect the payment of Rs.2 crores. The Division Bench passed order on 18.06.2010, extending the time till 20.06.2010. The said C extension was granted by holding that on such deposit, sale made by the 4th Respondent-Bank in favour of the appellant would stand cancelled and the Bank should effect the sale in favour of the 8th Respondent. The 8th Respondent was directed to deposit Rs.2.03 crores before the 4th Respondent-Bank on 19.06.2010 and the D time granted for payment in terms of the judgment was extended till 20.06.2010. On 8.7.2010, after noting that appellant had not withdrawn the amounts deposited with the 4th respondent bank, the Division Bench allowed the I.A. and directed 4th respondent Bank to execute the sale E deed in favour of the 8th Respondent for the sale consideration of Rs.2.03 crores. The instant appeals were filed challenging the order of the Division Bench of the High Court .. F

Disposing of the appeals, the Court HELD: 1. Under Section 13(1) of the SARFAESI Act, it is provided that any security interest created in favour of the SECURED CREDITOR may be enforced without the intervention of the Court and Tribunal by such creditor G in accordance with the provisions of this Act. The non-obsta nte clause in the opening set of expressions contained in Section 13(1) is restricted to Section 69 or Section 69A of the T.P. Act. The only other relevant aspect contained in the said sub-section is that such H 742 SUPREME COURT REPORTS [2014] 2 S.C.R. A enforcement should be in accordance with the provisions of this Act. S~ction 13(1) says that while on the one hand, any SECURED CREDITOR may be entitled to enforce the SECURED ASSET created in its favour on its own without resorting to any court proceedings or approaching the B Tribunal, such enforcement should be in conformity with the other provisions of the SARFAESl·Act. [Paras 24) [767-G-H; 768-B-C]

2. Sub-section (8) of Section 13 states that a c borrower can tender to the SECURED CREDITOR the dues together with all costs, charges and expenses incurred by the SECURED CREDITOR at any time before the date fixed for sale or transfer. In .the event of such tender once made as stipulated in the said provision, the mandate is that the SECURED ASSET should not be sold D or transferred by the SECURED CREDITOR. It is further reinforced to the effect that no further step should also be taken by the SECURED CREDITOR for transfer or sale of the SECURED ASSET. There is a valuable right recognized and asserted in favour of the borrower, who E is the owner of the SECURED ASSET and who is extended an opportunity to take all efforts to stop the sale or transfer till the last minute before which the said sale or transfer is to be effected. Having regard to such a · valuable right of a debtor having been embedded in the F said sub-section, ·it will have to be stated in uncontroverted terms that the said provision has been engrafted in the SARFAESI Act primarily with a view to protect the rights of a borrower, inasmuch as, such an ownership right is a Constitutional Right protected under G Article 300A of the Constitution, which mandates that no person shall be deprived of his property save by authority of law. Therefore, de hors, the extent of borrowing made and whatever costs, charges were incurred by the SECURED CREDITOR in respect of such H borrowings, when it comes to the question of realizing MATHEW VARGHESE v. M. AMRITHA KUMAR & 743

ORS. the dues by bringing the property entrusted with the A SECURED CREDITOR for sale to realize money advanced without approaching any Court or Tribunal, the SECURED CREDITOR as a TRUSTEE cannot deal with the said property in any manner it likes and can be disposed of only in the manner prescribed in the 8 SARFAESI Act. Therefore, the creditor should ensure that the borrower was clearly put on notice of the date and time by which either the sale or transfer will be effected in order to provide the required opportunity to the borrower to take all possible steps for retrieving his C property or at least ensure that in the process of sale the SECURED ASSET derives the maximum benefit and the SECURED CREDITOR or anyone on its behalf is not allowed to exploit the situation of the borrower by vk1:ue of the proceedings initiated under the SARFAESI Act. 0 [Para 26) [768-F-H; 769-C-H; 770-A] Valji Khimji and Company vs. Official Liquidator of Hindustan NitroProduct (Gujarat) Limited and Ors. (2008) 9 SCC 299: 2008 (12) SCR 1; United Bank of India vs. Satyawati Tondon and Ors. (2010) 8 SCC 110: 2010 (9) SCR E . 1; Narandas Karsondas vs. S.A. Kamtam and Anr. (1977) 3 SCC 247: 1977 (2) SCR 341; Mardia Chemicals Ltd. and Ors. vs. Union of India and Ors. (2004) 4 SCC 311: 2004 (3) SCR 982 - referred to.

3. Rules 8 and 9 of the Security Interest · F (Enforcement) Rules, 2002 prescribe the procedure to be followed by a SECURED CREDITOR while resorting to a sale after the issuance of the proceedings under Section 13(1) to (4) of the SARFAESI Act. Under Rule 9(1), it is prescribed that no sale of an immovable property under · G the rules should take place before the expiry of 30 days from the date on which the public notice of sale is published in the newspapers as referred to in the proviso to sub-rule (6) of Rule 8 or notice of sale has been served to the borrower. Sub-rule (6) of Rule 8 again states that H 744 SUPREME COURT REPORTS [2014] 2 S.C.R. A the authorized officer should serve to the borrower a notice of 30 days for the sale of the immovable SECURED ASSETS. Reading sub-rule (6) of Rule, 8 and sub-rule (1) of Rule 9 together, the service of individual notice to the borrower, specifying clear 30 days time gap for effecting any sale of immovable SECURED ASSET is8 a statutory mandate. It is also stipulated that no sale should be affected before the expiry of 30 days from the date on which the public notice of sale is published in the newspapers. The use of the expression 'or' in Rule 9(1) should be read as 'and' as that alone woufd- l;>e in C consonance with Section 13(8) of the SARFAESI Act. The_ other prescriptions contained in the- proviso to sub-rule

(6) of Rule 8 relates to the details to be set out in the newspaper publication, one of which should be in 'vernacular language' with sufficient circulation in the D locality by setting out the terms of the sale. While setting out the terms of the sale, it should contain the description of the immovable property to be sold, the known encumbrances of the SECURED CREDITOR, the secured debt for which the property is to be sold, the E reserve price below which the sale cannot be effected, the time and place of public auction or the time after which sale by any other mode would be completed, the deposit of earnest money to be made and any oth~r details which the authorized officer considers material for a purchaser to know in order to judge the nature and value of the F property. Such a detailed procedure while resorting to a sale of an immovable SECURED ASSET is prescribed under Rules 8 and 9(1). The paramount objective is to provide sufficient time and opportunity to the borrower to take all efforts to safeguard his right of ownership G either by tendering the dues to the creditor before the date and time of the sale or transfer, or ensure that the SECURED ASSET derives the maximum price and no one is allowed to exploit the vulnerable situation in which the borrower is placed. [Paras 28 to 30] [770-D-G; 771-B-F; H 772-C-D] MATHEW VARGHESE v. M. AMRITHA KUMAR & 745 ORS.

4. Rules 8(1) to (3) and in particular sub-rule (3) A speaks about the responsibility of the SECURED CREDITOR vis-a-vis the SECURED ASSET taken possession of. Under sub-rule (1) of Rule 8, the prescribed manner in which the possession is to be taken by issuing the notice in the format in which such B notice of possession is to be issued to the borrower is stipulated. Under sub-rule (2) of Rule 8 again, it is stated as to how the SECURED CREDITOR should publish the notice of possession as prescribed under sub-rule (1) to be made in two leading newspapers, one of which should be in the vernacular language having sufficient C circulation in the locality and also such publication should have been made seven days prior to the intention of taking possession. Sub-rule (3) of Rule 8 really casts much more onerous responsibility on the SECURED CREDITOR once possession is actually taken by its D authorised officer. Under sub-rule (3) of Rule 8, the property taken possession of by the SECURED CREDITOR should be kept in its custody or in the custody of a person authorized or appointed by it and it is stipulated that such person holding possession should E take as much care of the property in its custody as a owner of ordinary prudence would under similar circumstances take care of such property. The underlining purport of such a requirement is to ensure that under no circumstances, the rights of the owner till Fsuch right is transferred in the manner known to law is infringed. A reading of Rules 8 and 9, in particular, sub-rule (1) to (4) and (6) of Rule 8 and sub-rule (1) of Rule 9 makes it clear that simply because a secured interest in a SECURED ASSET is created by the borrower in favour of the SECURED CREDITOR, the said asset in the event G of the same having become a NON-PERFORMING ASSET cannot be dealt with in a light-hearted manner by way of sale or transfer or disposed of in a casual manner or by not adhering to the prescriptions contained under the SARFAESI Act and the Rules. [paras 31, 32] [772-E-H; H

746 SUPREME COURT REPORTS [2014] 2 S.C.R. A 773-A-C, F-G] 5. A close reading of Section 37 shows that the provisions of the SARFAESI Act or the rules framed thereunder will be in addition to the provisions of the B RDDB Act. Section 35 of the SARFAESI Act states that the provisions of the SARFAESI Act will have overriding effect notwithstanding anything inconsistent contained in any other law for the time being in force. Therefore, reading Sections 35 and 37 together, it will have to be held that in the event of any of the provisions of RDDB C Act not being inconsistent with the provisions of the SARFAESI Act, the application of both the Acts, namely, SARFAESI Act and RDDB Act, would be complementary to each other. The HEADING of the said Section also makes the position clear that application of other laws are D not barred. The effect of Section 37 would, therefore, be that in addition to the provisions contained under the SARFAESI Act, in respect of proceedings initiated under the said Act, it will be in order for a party to fall back upon the provisions of the other Acts mentioned in Section 37, E namely, the Companies Act, 1956, the Securities Contracts (Regulation) Act, 1956, the Securities and Exchange Board of India Act, 1992, the Recovery of Debts Due to Banks and Finances Institutions Act, 1993, or any other law for the time being in force. [paras 42, 43] [780-F H; 781-A-C, H; 782-A-B]

Transcore Vs. Union of India and Anr. (2008) 1 SCC 125: 2006 (9) Suppl. SCR 785; Ram Kishun and Ors. vs. State of Uttar Pradesh and Ors. (2012) 11 SCC 511: 2012 (6) SCR 105; Bhinka and Ors. vs. Charan Singh AIR 1959 SC 960: G 1959 Suppl. SCR 798 - relied on. Eastern Counties etc. Railway Vs. Marriage (1861) 9 HLC 32 - referred to. Craias on Statute Law, Seventh Edition, p.207- referred H to. MATHEW VARGHESE v. M. AMRITHA KUMAR & 747 ORS.

6. The application of the SARFAESI Act will be in A addition to, in the instant case to Section 29 of the RDDB Act. Whatever stipulations contained in Section 29 as regards the application of certain provisions of the Income Tax Act, 1961 in particular Schedule 2 Part I Rule 15 of the Income Tax Rules, 1962 for effecting a sale or B transfer would apply automatically. Therefore, what is to be considered is as to what is the mode prescribed under the above provisions, namely, Rule 15 prescribed under Schedule 2 Part I of the Income Tax Rules, 1962. Section 29 of the RDDB Act is an enabling provision under which c the Second and Third schedule to the Income Tax Act, 1961 (43 of 1961) and the Income Tax Rules, 1962 can be applied as far as possible with necessary modifications as if the provisions and the rules are referable to the DEBT DUE, instead of the income tax due. Therefore, 0 fictionally, by virtue of Section 29 of the RDDB Act, the mode and method by which a recovery of income tax can be resorted to under the Second and Third Schedule to the Income Tax Act and the Income Tax Rules, 1962 have to be followed. Therefore, a reading Section 37 of the E SARFAESI Act and Section 29 of the RDDB Act, the only aspect which has to be taken care of is that while applying the procedure prescribed under Rule 15 of the Income Tax Rules, 1962, no conflict with reference to any of the provisions of the SARFAESI Act, takes place. [paras F45, 46] [783-B-H]

7. A reading of the Rule 15 of the Income Tax Rules, 1962 does not in any way conflict with either Section 13(8) of the SARFAESI Act or Rules 8 and 9 of the Rules, 2002. Sub-rule (1) of Rule 15 only deals with the discretion of G the Tax Recovery Officer to adjourn the sale by recording his reasons for such adjournment. The said Rule does not in any way conflict with either Rures 8 or 9 or Section 13, in particular sub-section (1) or sub-section (8) of the SARFAESI Act. Therefore, to that extent there is no H 748 SUPREME COURT REPORTS [2014] 2 S.C.R.

A difficulty in applying Rule 15. As far as sub-rule (2) is concerned, the same is clear to the effect that a sale of immovable property once adjourned under sub-rule (1) for a longer period than one calendar month, a fresh proclamation of sale should be made unless the defaulter B consents to waive it. The said sub-rule also does not conflict with any of the provisions of the SARFAESI Act, in particular Section 13 or Rules 8 and 9. In fact there is no provision relating to grant of adjournment or issuance of a fresh proclamation for effecting the sale after the c earlier date of sale was not adherered to in the SARFAESI Act. In such circumstances going by the prescription contained in Section 37 of the SARFAESI Act, the provision contained in Section 29 of the RDDB Act will be in addition to and not in derogation of the provisions of the SARFAESI Act, the provisions contained in Rule 15,0 which is applicable by virtue of the stipulation contained in Section 29 of the RDDB Act, whatever stated in sub-rule (2) of Rule 15 should be followed in a situation where a notice of sale notified as per Rules 8 and 9(1) of the E Securitisation Trust Rules, read along with Section 13(8) gets postponed. Such a construction of the provisions, namely, Sections 37, 13(8) and 37 of the SARFAESI Act, read along with Section 29 with the aid of Rule 15 could alone be made and in no other manner, therefore, hold that unless and until a clear 30 days notice is given to the F borrower, no sale or transfer can be resorted to by a SECURED CREDITOR. In the event of any such sale properly notified after giving 30 days clear notice to the borrower did not take place as scheduled for reasons which cannot be solely attributable to the borrower, the G SECURED C.REDITOR cannot effect the sale or transfer of the SECURED ASSET on any subsequent date by relying upon the notification issued earlier. In other words, once the sale does not take place pursuant to a notice issued under Rules 8 and 9, read along with H Section 13(8) for which the entire blame cannot be MATHEW VARGHESE v. M. AMRITHA KUMAR & 749

ORS. thrown on the borrower, it is imperative that for effecting A the sale, the procedure prescribed above will have to be followed afresh, as the notice issued earlier would lapse. As per sub-rule (8) of Rule 8, sale by any method other than public auction or public tender can be on such terms as may be settled between the parties in writing. B As far as sub-rule (8) is concerned, the parties referred to can only relate to the SECURED CREDITOR and the borrower. It is, therefore, imperative that for the sale to be effected under Section 13(8), the procedure prescribed under Rule 8 read along with 9(1) has to be necessarily c followed, inasmuch as that is the prescription of the law for effecting the sale. Any other construction will be doing violence to the provisions of the SARFAESI Act, in particular Section 13(1) and (8) of the said Act. [para 48, 49] [784-D-H; 785-A-H; 786-A-B] D 8. In the instant case, the initial sale was notified to take place on 25.09.2007. The paper publication was made on 23.08.2007. Respondents 1 and 2 were informed by the 4th Respondent-Bank only on 30.08.2007.

Therefore, as the sale date was 25.09.2007 it did not fulfill E the mandatory requirement of 30 clear days notice to the borrower as stipulated under sub-rule (6) of Rule 8. But at the intervention of the Court, the sale date fixed on 25.09.2007 was adjourned by six weeks. In any case, the sale was not effected even after the six weeks period F expired as directed. The Securitisation Application came to be disposed of by the ORT only on 27 .12.2007. Therefore, once the Securitisation Application was dismissed on 27.12.2007, even assuming that there was no impediment for the SECURED CREDITOR, namely, G the 4th Respondent-Bank to resort to sale under the provisions of the SARFAESI Act, there should have been a fresh notice issued in accordance with Rules 8(6) and 9(1) of the Rules, 2002. Unfortunately, the 4th Respondent-Bank stated to have effected the sale on H 750 SUPREME COURT REPORTS [2014] 2 S.C.R.

A 28.12.2007 by accepting the tender of the appellant and by way of further process, directed the appellant to deposit the 25% of the amount on that very day and also directed to deposit the balance amount within 15 days, which was deposited by the appellant on 11.01.2008. In B fact, after the deposit of the 25% of the amount on 28.12.2007, the 4th Respondent-Bank stated to have confirmed the sale in favour of the appellant on 31.12.2007. After the deposit of the balance amount on 11.01.2008, the 4th Respondent-Bank informed the c Respondents no.1 and 2 about the confirmation of sale and thereby, provided no scope for Respondents no.1 and 2 to tender the dues of the SECURED CREDITOR, namely, the 4th Respondent-Bank with all charges, expenses etc., as has been provided under Section 13(8) of the SARFAESI Act. Therefore, the whole procedure0 followed by the 4th Respondent-Bank in effecting the sale on 28.12.2007 and the ultimate confirmation of the sale on 11.01.2008, stood vitiated as the same was not in conformity with the provisions of the SARFAESI Act and the Rules framed thereunder. Though, such a detailed E consideration of the legal issues was not made by the Division Bench while setting aside the sale effected in favour of the appellant, having regard to the construction of the provisions of the SARFAESI Act, the RDDB Act and the relevant Rules, the Judgment of the Division Bench F was perfectly justified. [Paras 50, 51] [786-C-H; 787-A-G]

9. In the order dated 18.06.2010 passed by the Division Bench, reference was made to the stand of Respondents 1 and 2 that they had to raise funds by G arranging for the sale of the very same SECURED ASSET, which took time as many buyers were reluctant to come forward because of the chance of continued litigation. The Division Bench without anything more, accepted the said reason (lnd by allowing the I.A. H permitted the 8th Respondent to deposit 2.03 crores by MATHEW VARGHESE v. M. AMRITHA KUMAR & 751 ORS.

19.06.2001 and on such deposit it held that the time A granted for payment stood extended till 20.06.2010. It further held that on such deposit being. made, the sale made by the 4th Respondent-Bank in favour of the appellant would be cancelled and the 4th Respondent should effect a sale in favour of the 8th Respondent. In B the subsequent I.A., the Division Bench directed the 4th Respondent-Bank to execute the sale in favour of the 8th Respondent taking ote of the fact of deposit of Rs.2.03 crores by the 8th Respondent with the 4th RespondQnt-Bank. After the Order dated 18.06.2010 and 08.07.20·10, c the Appellant filed the Special Leave Petition in this Court. Vide Order dated 08.08.2013, while declining to vacate Status Quo Order dated 30.07 .2010, the Special Leave Petition itself was directed to be listed for final hearing. Though the 8th Respondent is stated to have deposited Dthe sum of Rs.2.03 crores with the 4th Respondent-Bank, as per the Order dated 18.06.2010 in IA, the other directions in the main Order and the subsequent directions contained in the Orders dated 18.06.2010 and 08.07.2010, were not carried out. The sale which was already fixed in favour of the appellant continued to. E remain in force and the sum of Rs.2.03 crores deposited by the 8th Respondent remained with the 4th Respondent-Bank. [Paras 56, 57) [791-B-F; 792-A-C]

10. There was absolutely no justifiable grounds for F the Division Bench to grant further time in its Order dated 18.06.2010, it will be travesty of justice if the earlier Judgment dated 08.03.2010, which worked itself out on 08.05.2010, is to be reversed for the flimsy grounds raised by the Respondents no. 1 and 2 that they could not raise G funds in spite of two months time granted to them for paying a sum of Rs.2 crores in favour of the appellant. While the time granted by_ the Division Bench expired by 08.05.2010, the application for extension was filed 40 days later, i.e. on 10.06.2010. Therefore, for such a H 752 SUPREME COURT REPORTS [2014] 2 S.C.R.

A recalcitrant attitude displayed by Respondents 1 and 2 in respect of a litigation which involved very high stakes, the Division Bench should not have come for their rescue in the absence of any weighty reasons. The reason adduced on behalf of Respondent 1 and 2 is the B standard reason which any party would plead while seeking for extension of time. Since very valuable rights of the appellant were at stakes and the Order of the Division Bench also remained in force, in so far as it related to the cancellation of the sale deed, which existed C in favour of the appellant till 08.05.2010 and by virtue of the non-compliance of the conditions imposed in the said Judgment dated 08.03.2010 by the Respondents no.1 and 2, the ownership rights of the appellant got crystallized on and after 09.05.2010, there was no justification at all for the Division Bench to interfere with the said right in0 such a casual manner by accepting the flimsy reasons of the Respondents no.1 and 2. The ownership right which got crystallized in favour of the appellant as on 09.05.2010, could not have been snatched away by the Division Bench by passing the impugned orders dated E 18.06.2010 and 08.07.2010. With reference to the right of ownership of the Respondents 1 and 2 with reliance upon Article 300A of the Constitution would equally apply to the appellant as well in such a situation. Therefore, such a right which accrued in favour of the appellant F ought not to have been interfered with by the Division Bench and the Orders passed in the interim application filed at the instance of the Respondents no.1 and 2, along with the 8th Respondent herein are not justified.

Therefore, while upholding the Judgment of the Division G Bench dated 08.03.2010, the Orders dated 18.06.2010 and 08.07.2010 are set aside. [Para 58] [792-E-H; 793-A-F] 11. There is another very relevant factor which cannot be ignored, namely, that the value of the property H which was knocked out in favour of the appellant in a MATHEW VARGHESE v. M. AMRITHA KUMAR & 753 ORS. sum of Rs.1.27 crores by confirming the sale by the 4th A Respondent-Bank on 31.12.2007 and 11.01.2008, the same was found to be not in accordance with the provisions of the SARFAESI Act. Since the proper procedure for effecting the sale was not followed, it will have to be held that the price fetched through the B appellant cannot be held to be the correct price for the mortgaged property involved in these proceedings.

Further, the very fact that in the year 2010 the property could fetch Rs.2.03 crores, in all fairness even while confirming the Order of the Division Bench, by which the c sale in favour of the appellant came to be confirmed, the difference in the sale price should .. be directed to be paid by the Appellant. While the price paid by the appellant was Rs.1.27 crores, the price ultimately fetched at the im;tance of the Respondents no.1 and 2 was Rs.2.03 0 crores. Therefore, after giving credit to Rs.1.27 crores, the appellant would still be liable to pay a further sum of Rs.76 lacs to the Respondents no.1 and 2. Accordingly, the order is passed. [Para 59] [793-G-H; 794-A-D] Case Law Reference: E 2008 (12) SCR 1 referred to Para 16 2010 (9) SCR 1 referred to Para 16 1977 (2) SCR 341 referred to Para 17 F 2012 (6) SCR 105 relied on Para 21 2004 (3) SCR 982 referred to Para 37 2006 (9) Suppl. SCR 785 relied on Para 42 G (1861) 9 HLC 32 referred to Para 43 1959 Suppl. SCR 798 relied on Para 44 CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1927-1929 of 2014. H 754 $UPREME COURT REPORTS [2014] 2 S.C.R. A From the Judgment and Order dated 08.03.2010 in WA No. 1555/2009 dated 18/06/2010 in IA No. 437/2010 in WA No.1555/2009 and dated 08/07/2010 in IA No. 507/2010 in WA No. 1555/2009 of the High Court of Kerala at Ernakulam. B Krishnan Venugopal, Abir Phukhan, Uday Rathore, A. Raghunath for the Appellant. Shyam Diwan, M.K.S. Menon, Meena, C.R., K.

Prabhakaran, Himanshu Munshi, Manish Garani, Durga Dutt, Robin V.S., Abhinav Malhotra, Usha Nandini V. for the C Respondents. The Judgment of the Court was delivered by FAKKIR MOHAMED IBRAHIM KALIFULLA, J. 1. Leave D granted. 2. This appeal by the purchaser, in a tender-cum-auction sale held by the 4th Respondent-Bank, is directed against the judgments and final orders dated 08.03.2010 in Writ Appeal No: 1555 of 2009, Order dated 18.06.2010 in I.A. No.437 of E 2010 in Writ Appeal No.1555 of 2009 and Order dated 08.07.2010 in I.A. No.507 of 2010 in Writ Appeal No.1555 of 2009 passed by the High Court of Kerala at Ernakulam. 3. The interesting but very serious question that arises for F consideration in this appeal is as regards the interpretation of Section 13(8) of the SARFAESI Act read with Rules 8 and 9 of the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as "the Rules, 2002").

4. The 1st and 2nd Respondents herein stood as G guarantors in respect of a credit facility to the tune of Rs.30,00,000/- granted by the 4th Respondent-Bank in favour of a company called 'Jerry Merry Exports Private Limited'. As guarantors, the 1st and 2nd Respondents created an EQUITABLE MORTGAGE in favour of 4th Respondent-Bank H by depositing the title deeds of their property bearing Survey MATHEW VARGHESE v. M. AMRITHA KUMAR & 755 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.l No.150/12A (40.20 cents), ~urvey No.150/12C (11 cents) and A Survey No.150/13 (26 cents) totaling 77.20 cents situated in Padivattom Kana, Edappally South Village, Kanayanoor Taluk, Emakulam District Kochi, Kerala (hereinafter referred to as "the mortgage property"). When the transaction became a NON-PERFORMING ASSET, the 4th Respondent-Bank filed O.A. B No.31 of 2002 for recovery of Rs.33,77,053/- along with interest @ 18% per annum. The 4th Respondent-Bank also issued a notice under Section 13(2) of the SARFAESI Act on 11.08.2006 for a sum of Rs.70,77,590/-. On 20.02.2007, the 4th Respondent-Bank is stated to have taken possession of the c mortgaged property by invoking Section 13(4) of SARFAESI Act, read along with Rules 8 and 9 of the Ru_les, 2002.

5. The 1st and 2nd Respondents filed a Securitisation Application i.e. S.A. No.20 of 2007, before the Debt Recovery Tribunal (hereinafter referred to as "the ORT") Ernakulam, D challenging the possession notice dated 20.02.2007 and additionally also for an Order to restrain the 4th Respondent-Bank from evicting Respondents 1 and 2. Between 09.05.2007 and 24.07.2007 the attempts made for One Time Settlement (hereinafter referred to as "OTS") also failed and the 4th E Respondent-Bank withdrew its offer of OTS, which was in a sum of Rs.55,00,000/-. 6. On 14.08.2007, the 4th Respondent-Bank issued a notice to Respondents 1 and 2, as well as others of its intention Fto sell the property under Rule 8(6) of the Rules, 2002 by fixing a reserve price of Rs.1,25,00,000/-. On 23.08.2007, the 4th Respondent-Bank published its notice of sale of property in Indian Express and Mathrubhoomi, inviting tenders-cum-auction from the public. The 1st and 2nd Respondents were informed by the 4th Respondent-Bank by its notice dated 30.08.2007, G about the publication made on 23.08.2007 and also enclosed a tender form along with the terms and conditions for participation in the tender. The Appellant and one M/s Kent Construction stated to have submitted their tenders on 30.08.2007 and 01.09.2007. H 756 SUPREME COURT REPORTS [2014] 2 S.C.R.

A 7. On 20.09.2007, the 1st and 2nd Respondents filed W.P. No.27182 of 2007 challenging the proceedings initiated under the SARFAESI Act. The said writ petition was disposed of by a learned Single Judge of the Kerala High Court by Order dated 20.09.2007. By the said order, the High Court after B taking note of the O.A. filed by the 4th Respondent-Bank, as well as S.A. filed by the 1st and 2nd Respondents, directed the DRT to hear the parties and dispose of both the cases or at least the Securitisation Application filed by the 1st and 2nd Respondents without any delay. The High Court also noted that c at that point of time, the DRT had fixed 12.10.2007 as the date for disposal of both the applications. While issuing the said directions, the learned Judge gave liberty to the parties to settle the liability and also directed the 4th Respondent-Bank to defer the sale posted on 25.09.2007 by six weeks, by imposing a condition on Respondents 1 and 2 to deposit a sum of D Rs.10,00,000/- before the date of sale, i.e. 25.09.2007. It was also observed therein that since the 4th Respondent-Bank had agreed for OTS in a sum of Rs.55,00,000/-, the bank should waive interest if the 1st and 2nd Respondents offer a settlement within a reasonable time and by making payment of the said E amount.

8. It is common ground that pursuant to the said Order dated 20.09.2007, the sale which was scheduled to be held on 25.09.2007 was postponed. In fact, though the six weeks period F prescribed in the Order dated 20.09.2007 expired by 10.11.2007, it is stated that even thereafter the sale was not effected. Pursuant to the said order, the 1st and 2nd Respondents stated to have deposited the sum of Rs.10,00,000/- with the 4th Respondent-Bank. On 27.12.2007, G the DRT passed Orders in S.A. No.20 of 2007 dismissing the said application with costs, On the next day i.e. on 28.12.2007, the 4th Respondent-Bank accepted the tender of the Appellant who offered a sum of Rs.1,27,00,101/- and asked the Appellant to deposit 25% of the amount i.e. Rs.31,75,025/- on that day H itself and pay the balance amount within 15 days. The Appellant MATHEW VARGHESE v. M. AMRITHA KUMAR & 757 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] is stated to have ,deposited the 25% of the total bid amount A offered by it with the 4th Respondent-Bank. The Appellant is also stated to have deposited the balance amount on 11.61.2008. After deposit of 25% of the bid amount on 31.12.2007, the 4th Respondent-Bank confirmed the sale in favour of the Appellant and gave further time of 15 days for B depositing the balance amount.

9. After depositing the balance amount by the Appellant on 11.01.2008 and the confirmation of the sale in favour of the Appellant, the 4th Respondent-Bank informed the Respondents c 1 and 2 on 02.02.2008, about the confirmation of sale in favour of the Appellant and also the receipt of the entire consideration. The Respondents 1 and 2 were directed to collect the balance amount available with the 4th Respondent-Bank. On 12.02.2008, the Respondents 1 and 2 filed a Review Petition D No.157 of 2008 in W.P. No.27182 of 2007. The said Review Petition was dismissed giving liberty to Respondents 1 and 2 to challenge the sale. The Respondents 1 and 2 filed a Writ Petition No.5876 of 2008 on 18.02.2008, challenging the vires of the Rules, 2002 on the ground that it violated their right of E redemption by denying them adequate opportunity and time to repay the borrowed sum and the action of the Bank in having acted surreptitiously in selling the property without informing them. The said writ petition was dismissed by the learned Single Judge by Order dated 12.06.2009, on the ground that the Respondents 1 and 2 got an alternative efficacious remedy F available under the SARFAESI Act. As against the said Order, Respondents 1 and 2 filed Writ Appeal No.1555 of 2009, on 16.07.2009. In the meantime, on 24.06.2009, the 4th Respondent-Bank transferred the property in favour of the Appellant unde.r a duly registered certificate of sale. G

10. By the order impugned, the Division Bench took the view that the sale was not conducted in a fair and proper manner, that when the sale was initially postponed by six weeks from 25.09.2007, the Bank ought to have renotified the sale or H 758 SUPREME COURT REPORTS [2014] 2 S.C.R. A at least extended the time for receiving further tenders, particularly when only one valid tender was received on the last date notified for sale. The Division Bench further held that the sale was not even informed to Respondents 1 and 2 and they were informed only after the confirmation of the sale and after B receipt of their full consideration. The Division Bench, therefore, set aside the sale which was already executed in favour of the Appellant by imposing a condition that Respondents 1 and 2 furnish a Demand Draft of Rs.2,00,00,000/- from a local branch of a Nationalised Bank in favour of the Appellant and hand over c the same to him, within a period of two months from the date of the Order. It further held that if payment was not made, as directed, the sale in favour of the Appellant would stand confirmed and the Writ Appeal would automatically stand dismissed. In the event of the payment of Rs.2,00,00,000/- being made in the form of a Demand Draft, the Appellant was directed0 to hand over the original sale deed obtained by him from the Bank to enable Respondents 1 and 2 to approach the Sub-Reg is tra r and Revenue Authorities for cancellation of registration, consequent mutation, etc.

E 11. There was also a direction to the Sub-Registrar to restore the property in the name of the 1st and 2nd Respondents. On payment of the sum of Rs.2,00,00,000/-, the Bank was directed to remit the excess amount available with them to the Tax Recovery Officer in pursuance of the demand F already made by it and to credit the said amount in the account of Respondents 1 and 2. Liberty was also given to Respondents 1 and 2 to claim for refund, if they were eligible for any. Additionally, liberty was also given to Respondents 1 and 2 to refund the stamp duty, if they were eligible for such G refund. The period of two months granted by the Division Bench for Respondents 1 and 2 to deposit a sum of Rs.2,00,00,000/ - expired by 08.05.2010. 12. Respondents 1 and 2 did not make the payment within H the said date, as directed by the Division Bench. Instead an MATHEW VARGHESE v. M. AMRITHA KUMAR & 759 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

application was filed by the Respondents 1 and 2 in I.A. No.437 A of 2010 in Writ Appeal No.1555 of 2009 seeking for further six weeks time to effect the payment of Rs.2,00,00,000/- to the Appellant. In the said I.A. No.437 of 2010, the Oivisior: Bench passed its order on 18.06.2010, extending the time till 20.06.2010. The said extension was granted by holding that on B such deposit, sale made by the 4th Respondent-Bank in favour of the Appellant would stand cancelled and the Bank should effect the sale in favour of the 8th Respondent in Special Leave Petition No.21434 of 2010, namely, Mr. Koshi Phillip s/o Mathai Koshi, who shall hereinafter be referred to as the 8th c Respondent. The 8th Respondent herein was directed to depositRs.2,03,00,000/- before the 4th Respondent-Bank on 19.06.2010 and the time granted for payment in terms of the judgment was extended till 20.06.2010. Subsequently, in I.A. No.507 of 2010, the Division Bench after noting that the 0 Appellant had not withdrawn the amounts deposited with the 4th Respondent-Bank by stating that he has approached this Court by way of a Special Leave Petition and after finding that mere steps taken by the Appellant for filing the Special Leave Petition need not stand in the way of executing the sale deed E in favour of the 8th Respondent who had deposited the entire amount. In effect, the said I.A. No.507 of 2010 in Writ Appeal No.1555 of 2009 was allowed and the Bank was directed to execute the sale deed in favour of the 8th Respondent for the sale consideration of Rs.2,03,00,000/-.

F 13. As against the judgment in Writ Appeal No.1555 of 2009 and the orde1s ·passed in I.A Nos.437 of 2010 and 507 of 2010, the Appellant has come forward with these appeals. 14. We heard Mr. Krishnan Venugopal, Senior Counsel for G the Appellant, Mr. Shyam Divan, Senior Counsel for the 8th Respondent and Mr. C.U. Singh, Senior Counsel for the Respondents 1 and 2. Mr. Krishnan Venugopal, Senior Counsel for the Appellant in his submissions after referring to Section 13(8) of the SARFAESI Act and Rules 8 and 9 of the Rules, H 760 SUPREME COURT REPORTS [2014] 2 S.C.R.

A 2002 and after drawing our attention to the initial order of the learned Single Judge dated 20.09.2007 in Writ Petition No.27182 of 2007, submitted that by virtue of the said order of the High Court, the requirement of Section 13(8), as well as corresponding Rules were duly taken care of and the outer date B for sale was prescribed in the said order itself and once the debtor, namely, Respondents 1 and 2 failed to avail the said opportunity extended by the High Court, they cannot be allowed to complain about the ultimate sale effected on 28.12.2007. The learned Senior Counsel contended that in the Order dated c 20.09.2007, the High Court while directing the ORT to hear the parties and dispose of the O.A. and S.A. without any delay gave an option to Respondents 1 and 2 to settle the dues by making the payment of Rs.55,00,000/-, which was the OTS offered by the 4th Respondent-Bank with an observation that in the event of Respondents 1 and 2 making the said payment, the 4th0 Respondent-Bank should consider waiving interest on the said amount.

15. According to the learned Senior Counsel, when the 1st and 2nd Respondents failed to avail the said opportunity E offered in the Order dated 20.09.2007, by which order, the sale which was scheduled to be held on 25.09.2007 was directed to be postponed by six weeks, the 1st and 2nd Respondents cannot subsequently be heard to complain of any irregularity in the sale. The learned Senior Counsel would, therefore, F contend that in effect, the said Order dated 20.09.2007 of the High Court, took into account the entitlements of the guarantors who stepped into the shoes of the borrowers as provided under Section 13(8) of the SARFAESI Act, and therefore, the sale effected after the expiry of the period of six weeks granted by G the High Court and after the dismissal of the guarantors application, namely, S.A. by the ORT, i.e. on 28.12.2007, cannot be held to be in violation of the Section 13(8) of the SARFAESI Act. 16. The learned Senior Counsel further contended that by H MATHEW VARGHESE v. M. AMRITHA KUMAR & 761 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

the impugned order, the Division Bench exercised its A jurisdiction urider Article 226 of the Constitution, which this Court held ought not to have been exercised, when Respondents 1 and 2, as guarantors, had every right to work out their remedy as against the sale effected on 28.12.2007, under the provisions of the SARFAESI Act. The learned Senior B Counsel also contended that once the sale has been effected and confirmed in accordance with law, merely because someone else can offer a higher amount, the Court should not have interfered with the already confirmed sale as that would become an unending affair if such approach made by parties c are entertained. In support of his submissions, the learned Senior Counsel relied upon Valji Khimji and Company Vs. Official Liquidator of Hindustan Nitro Product (Gujarat) Limited and others - (2008) 9 SCC 299 and United Bank of India Vs. Satyawati Tandon and others - (2010) 8 SCC 110. The learned D Senior Counsel also contended that i.n any event, once the Division Bench ultimately directed Respondents 1 and 2 to deposit the sum of Rs.2,00,00,000/- within two months, i.e. on or before 08.05.2010, and the Respondents 1 and 2 failed to comply with the said condition, the order worked itself out and E the Writ Appeal stood dismissed without any further reference to the Court. According to the counsel, the extension of further time granted by the Division Bench in a belated application of Respondents 1 and 2 and modification of the conditional payment to be made by the 8th Respondent, was beyond the Fpowers of the Court and consequently the sale already effected by the 4th Respondent-Bank in favour of the Appellant became final and conclusive. The learned senior counsel, therefore, contended that the subsequent Order of the Division Bench dated 18.06.2010 in I.A. No.437 of 2010 and the order dated 08.07.2010 in I.A. No.507 of 2010, cannot be sustained. G

17. As against the above submissions made on behalf of the Appellant, the submission of Mr. Shyam Divan, learned Senior Counsel for the 8th Respondent was six-fold. According to Mr. Divan, the mortgagor's right of redemption is a statutorily H 762 SUPREME COURT REPORTS [2014] 2 S.C.R. A recognized one and continues till the time of registration of the sale, that the said general principle is engrafted in Section 13(8) of the SARFAESI Act read with Rules 8 and 9 of the Rules, 2002, that it is incumbent upon the Bank to have informed the borrower about the date and time of the sale, B which is implicit in ~he provision, that admittedly no notice was given by the Bank with reference to the sale held on 28.12.2007, that in any case since there was a postponement of the original sale scheduled, there ought to have been a fresh notification and, therefore, the High Court's conclusion about c non-issuance of sale notice was well justified. The learned senior counsel contended that eventually the order of the Division Bench of the High Court was equitable and, therefore, does not call for interference. Mr. Divan, learned Senior Counsel, drew support from Section 60 of the Transfer of D Property Act, 1882 (hereinafter referred to as "the T.P. Act") by relying upon the interpretation made by this Court on mortgagor's right of redemption engrafted in Section 60 of the T.P. Act in the decision reported in Narandas Karsondas Vs. S.A. Kamtam and another - (1977) 3 SCC 247.

E 18. By drawing a parallel to Section 13(8) of the SARFAESI Act vis-a-vis Section 60 of the T.P. Act, the learned Senior Counsel submitted that there should have been a definite intimation to the borrower before the sale or transfer, which is a legal requirement both under Section 13(8) read with F Rules 8(6) and 9(1), as well as Section 60 of the T.P. Act. By referring to the initial notice issued by the Bank on 23.08.2007, the learned Senior Counsel contended that the period mentioned therein did not survive after the passing of the order by the ORT on 27.12.2007 and if that initial notice was to be G revived for the purpose of effecting the sale and transfer, the borrower ought to have been mandatorily put on notice as prescribed under Section 13(8) of the SARFAESI Act. The learned Senior Counsel also relied upon Order XXI Rules 64 to 69 and submitted that in common law as well, when once a H sale is adjourned to a specified date, a future proclamation MATHEW YARGHESE v. M. AMRITHA ~UMAR & 763 ORS. [FAKKIR MOHAMED IBRAHIM KAUFULLA, J.] was the requirement as that alone would enable the mortgagor A to ensure that his valuable right of ownership is not frittered away without providing any opportunity for redemption.

19. The learned Senior Counsel by relying upon Section 29 of the Recovery of Debts Due to Banks and Financial B Institutions Act, 1993 (hereinafter referred to as "the RDDB Act") and Section 37 of the SARFAESI Act, read along with Rule 15 of the Second Schedule of the Income Tax (Certificate Proceedings Rules, 1962) (hereinafter referred to as "the Income Tax Rules, 1962"), contended that even under the C provisions of the SARFAESI Act, there is· a statutory requirement for renotification to effect the sale and, therefore, the non-compliance of the said requirement would render the sale effected by the Bank on 28.12.2007 invalid in law. 20. The learned Senior Counsel pointed out that after the D postponement of the. sale pursua.nt to the deposit of Rs.10,00,000/- on 25.09.2007, based on the judgment of the High Court dated 20.09.2007, the only intimation to the borrower at the instance of the Bank was dated 02.02.2008, which only said that surplus amount over and above the money E due to the Bank was adjusted and, therefore, the said notice was not in consonance with the provisions of the SARFAESI Act and the other statutory provisions required to be complied with and, therefore, the judgment of the Division Bench of the High Court does not call for interference. The learned Senior F Counsel drew our attention to various grounds raised in the writ petition wherein the above contentions of the borrower have been set out.

21. Supporting the submissions made by Mr. Shyam Divan, Mr. C.U. Singh, learned Senior Counsel for the Respondents G No.1 and 2, submitted that the non-obstante clause in Section 13(1) of the SARFAESI Act read along with Section 60, as well as, Sections 69 and 69A of the T.P. Act, would show that under Section 13(1) of the SARFAESI Act the non-obstante clause is restricted to Section 69 or 69A of the T.P. Act, and that the H 764 SUPREME COURT REPORTS [2014] 2 S.C.R.

A implication of Section 60 of the T.P. Act would apply in full force. According to the learned Senior Counsel, while the 4th Respondent-Bank made no mention about the other bidders in the High Court and merely submitted that the bid submitted by the Appellant was opened and confirmed, in the counter filed B before this Court, they came forward with a statement that pursuant to the paper publication two tenders were received and the Appellant was one of them, while the other one was one M/s Kent Construction. The learned Senior Counsel also pointed out that in paragraph 35 of the said Counter Affidavit c of the Bank before this Court, they further stated that the conclusion of the Division Bench that there was a sole bidder was incorrect, as there were two bidders wherein one of them Withdrew from bid on account of the earlier order of the High Court dated 20.09.2007. By referring to the above facts stated D on behalf of the Bank before the High Court and before this Court, the learned Senior Counsel contended that the only conclusion that can be drawn was that there was no transparency at all in conducting the sale. The learned Senior Counsel relied upon in Ram Kishun and others Vs. State of Uttar Pradesh and others - (2012) 11 SCC 511. E

22. Having heard the learned counsel for the respective parties and having perused the Judgments and the Orders impugned in these appeals and other material papers, in the first instance, we wish to deal with the appeal filed against the . F Judgment dated 08.03.2010 in Writ Appeal No.1555 of 2009 .. The Division Bench, after holding that the sale was not conducted in a fair and reasonable manner and thereby the borrowers' rights have been seriously infringed, set aside the sale effected on 28.12.2007, in favour of the Appellant and G directed the borrowers to give a Demand Draft for Rs.2,00,00,000/- drawn on a local branch of a Nationalised BanK in favour of the Appellant and hand over the same to him within a period of two months from the date of the Judgment. It • further held that if the payment was not made, as directed, the H sale in favour of the Appellant would stand confirmed and the MATHEW VARGHESE v. M. AMRITHA KUMAR & 765 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] writ appeal would stand dismissed. A 23. In order to examine the correctness of the impugned Judgment of the Division Bench, a serious look into Section 13, in particular sub-section (8) of the SARFAESI Act along with Rules 8 and 9 of the Rules, 2002 is required. We, therefore, 8 deem it appropriate to extract Sections 2(zc), 2(zf), 13(1) and (8) of the SARFAESI Act, as well as Rule 8 sub-rules (1 ), (3), (5) and (6) and. also Rule 9(1) which are as under:

"2(zc) "secured asset" means the property on which security interest is. created; C 2(zf) "security interest" means right, title and interest of any kind whatsoever upon property, created in favour of any secured creditor and includes any mortgage, charge, hypothecation, assignment other than those specified in D section 31; 13. Enforcement of security interest.- (1) Notwithstanding anything contained in section 69 or section 69A of the Transfer of Property Act, 1882 (4 of 1882), any security interest created in favour of any E secured creditor may be enforced, without the intervention of the court or tribunal, by such creditor in accordance with the provisions of this Act. (8). If the dues of the secured creditor together with all F costs, charges and expenses incurred by him are tendered to the secured creditor at any time before the date fixed for sale or transfer, the secured asset shall not be sold or transferred by the secured creditor, and no further step shall be taken by him for transfer or sale of that secured asset. G Rule 8. Sale of immovable secured assets.- (1) Where the secured asset is an immovable property, the authorised officer shall take or cause to be taken possession, by delivering a possession notice prepared as nearly as H possible in Appenoix IV to these rules, to the borrower and 766 SUPREME COURT REPORTS [2014) 2 S.C.R. A by affixing the possession notice on the outer door or at such conspicuous place of the property.

(3) In the event of possession of immovable property is actually taken by the authorised officer, such property shall be kept in his own custody.or in the custody of any personB authorised or appointed by him, who shall take as much care of the property in his custody as a owner of ordinary prudence would, under the similar circumstances, take of such property. c (5) Before effecting sale of the immovable property referred to in sub-rule (1) of rule 9, the authorised officer shall obtain valuation of the property from an approved valuP-~ and in consultation with the. secured creditor, fix the reserve price of the property and may sell the whole or any D part of such immovable secured asset by any of the following methods:- (a) by obtaining quotations from the persons dealing with similar secured assets or otherwise interested !n buying the such assets; orE (b) by inviting tenders from the public; (c) by holding public auction; or (d) by private treaty.F (6) The authorised officer shall serve to the borrower a notice of thirty days for sale of the immovable secured assets, under sub-rule (5):

G Provided that if the sale of such secured asset is being effected by either inviting tenders from the public or by holding public auction, the secured creditor shall cause a public notice in two leading newspaper.s one in vernacular language having sufficient circulation in the locality by setting out the terms of sale, which shall include;-H MATHEW VARGHESE v. M. AMRITHA KUMAR & 767 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] · (a) The description of the immovable property to be A sold, including the details of the encumbrances known to the secured creditor; (b) the secured debt for recovery of which the property is to be sold; B (c) reserve price, below which the property may not be sold; (d) time and place of public auction or the time after which sale by any other mode shall be completed; C (e) depositing earnest money as may be stipulated by the secured creditor; {f) any other thing which the authorised officer 0 considers it material for a purchaser to know in order to judge the nature and value of the property. Rule 9. Time of sale, issue of sale certificate and delivery of possession, etc.- E (1) No sale of immovable property under these 'rules shall take place before the expiry of thirty days from the date on which the public notice of sale is published in newspapers as referred to in the proviso to sub-rule (6) or notice of sale has been served to the borrower. F

24. Under Section 13(1 ), it is provided that any security interest created in _favour of the SECURED CREDITOR may be enforced without the intervention of the Court and Tribunal by such creditor in accordance with the provisions of this Act. The non-obstante clause in the opening set of expressions G contained in Section 13(1 ), as· pointed out by Mr. Singh, learned Senior Counsel for the borrowers, is restricted to Section.69 or Section 69A of the T.P. Act. Apart from noting the said statutory impediment, to be noted in Section 13(1), the H 768 SUPREME COURT REPORTS [2014) 2 S.C.R. A more important feature to be noted is that a free hand is given to the SECURED CREDITOR for the purpose of enforcing any security interest created in favour of SECURED CREDITOR, without the intervention of the Court or Tribunal. The only other relevant aspect contained in the said sub-section is that such B enforcement should be in accordance with the provisions of this Act. A reading of Section 13(1 ), therefore, is clear to the effect that while on the one hand any SECURED CREDITOR may be entitled to enforce the SECURED ASSET created in its favour on its own without resorting to any court proceedings or c approaching the Tribunal, such enforcement should be in conformity with the other provisions of the SARFAESI Act.

25. Keeping the said stipulation contained in Section 13(1) in mind, it will have to be examined as to what are the other statutory requirements to be fulfilled when enforcement of a right D created in favour of ;;my SECURED CREDITOR in respect of a security interest is created. As we are concerned with the sale of property mortgaged by the borrowers, for the prese~t we leave aside any other form or mode of enforcement, except the one relating to the equitable mortgage created in favour of E the Bank. For that purpose, we find thatsub-section (8) of Section 13 would be relevant. 26. A careful reading of sub-section (8), therefore, has to be made to appreciate the legal issue involved and the F submissions made by the respective counsel on the said provision. A plain reading of sub-section (8) would show that a borrower can tender to the SECURED CREDITOR the dues together with all costs, charges and expenses incurred by the SECURED CREDITOR at any time before the date fixed for G sale or transfer. In the event of such tender once made as stipulated in the said provision, the mandate is that the SECURED ASSET should not be sold or transferred by the SECURED CREDITOR. It is further reinforced to the effect that no further step should also be taken by the SECURED H MATHEW VARGHESE v. M. AMRITHA KUMAR & 769 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

CREDITOR for transfer or sale of the SECURED ASSET. The A contingency stipulated in the event of the tender beiog made by a debtor of the dues inclusive of the costs, charges, etc., would be that such tender being made before the date fixed for sale or transfer, the SECURED CREDITOR should stop all further steps for effecting the sale or transfer. That apart, no B further step should also be taken for transfer or sale. When we analyze in depth the stipulations contained in the said sub-section (8), we find that there is a valuable right recognized and asserted in favour of the borrower, who is the owner of the SECURED ASSET and who is extended an opportunity to take c all efforts to stop the sale or transfer till the last minute before which the said sale or transfer is to be effected. Having regard to such a valuable right of a debtor having been embedded in the said sub-section, it will have to be stated in uncontroverted terms that the said provision has been engrafted in the D SARFAESI Act primarily with a view to protect the rights of a borrower, inasmuch as, such an ownership right is a Constitutional Right protected under Article 300A of the Constitution, which mandates that no person shall be deprived of his property save by authotity of law. Therefore, de hors, the Eextent of borrowing made and whatever costs, charges were incurred by the SECURED CREDITOR in respect of such borrowings, when it comes to the question of realizing the dues by bringing the property entrusted with the SECURED CREDITOR for sale to realize money advanced without Fapproaching any Court or Tribunal, the SECURED CREDITOR as a TRUSTEE cannot deal with the said property in any manner it likes and can be disposed of only in the manner prescribed in the SARFAESI Act. Therefore, the creditor should ensure that the borrower was clearly put on notice of the date and time by which either the sale or transfer will be effected in G order to provide the required opportunity to the borrower to take all possible steps for retrieving his property or at least ensure that in the process of sale the SECURED ASSET derives the maximum benefit and the SECURED CREDITOR or anyone on its behalf is not allowed to exploit the situation of the borrower H

770 SUPREME COURT REPORTS [2014] 2 S.C.R. A by virtue of the proceedings initiated under the SARFAESI Act. More so, under Section 13(1) of the SAR FAES I Act, the SECURED CREDITOR is given a free hand to resort to sale of the property without approaching the Court or Tribunal. 27. Therefore, by virtue of the stipulations contained under8 the provisions of the SARFAESI Act, in particular, Section 13(8), any sale or transfer of a SECURED ASSET, cannot take place without duly informing the borrower of the time and date of such sale or transfer in order to enable the borrower to tender the dues of the SECURED CREDITOR with all costs, charges and C expenses and any such sale or transfer effected without complying with the said statutory requirement w.ould be a constitutional violation and nullify the ultimate sale.

28. Once the said legal position is ascertained, the D statutory prescription contained in Rules 8 and 9 have also got to be examined as the said rules prescribe as to the procedure to be followed by a SECURED CREDITOR while resorting to a sale after the issuance of the proceedings under Section 13(1) to (4) of the SARFAESI Act. Under Rule 9(1 ), it is E prescribed that no sale of an immovable property under the rules should take place before the expiry of 30 days from the date on which the public notice of sale is published in the newspapers as referred to in the proviso to sub-rule (6) of Rule 8 or notice of sale has been served to the borrower. Sub-rule F (6) of Rule 8 again states that the authorized officer should serve to the borrower a notice of 30 days for the sale of the immovable SECURED ASSETS. Reading sub-rule (6) of Rule 8 and sub-rule (1) of Rule 9 together, the service of individual notice to the borrower, specifying clear 30 days time gap for G effecting any sale of immovable SECURED ASSET is a statutory mandate. It is also stipulated that no sale should be affected before the expiry of 30 days from the date on which the public notice of sale is published in the newspapers. Therefore, the requirement under Rule 8(6) and Rule 9(1) H contemplates a clear 30 days individual notice to the borrower MATHEW VARGHESE v. M. AMRITHA KUMAR & 771 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

and also a public notice by way of publication in the A newspapers. In other words, while the publication in newspaper should provide for 30 days clear notice, since Rule 9(1) also states that such notice of sale is to be in accordance with proviso to sub-rule (6) of Rule 8, 30 days clear notice to the borrower should also be ensured as stipulated under Rule 8(6) B as well. Therefore, the use of the expression 'or' in Rule 9(1) should be read as 'and' as that alone would be in consonance with Section 13(8) of the SARFAESI Act. 29. The other prescriptions contained in the proviso to sub- C rule (6) of Rule 8 relates to the details to be set out in the newspaper publication, one of which should be in 'vernacular language' with sufficient circulation in the locality by setting out the terms of the sale. While setting out the terms of the sale, it should contain the description of the immovable property to be sold, the known encumbrances of the SECURED CREDITOR, D the secured debt for which the property is to be sold, the reserve price below which the sale cannot be effected, the time and place of public auction or the time after which sale by any other mode would be completed, the deposit of earnest money to be made and any other details which the authorized officer E considers material for a purchaser to know in order to judge the nature and value of the property.

30. Such a detailed procedure while resorting to a sale of an immovable SECURED ASSET is prescribed under Rules F 8 and 9(1 ). In our considered opinion, it has got a twin objective to be achieved. In the first place, as already stated by us, by virtue of the stipulation contained in Section 13(8) read along with Rules 8(6) and 9(1), the owner/borrower should have clear notice of 30 days before the date and time when the sale or G transfer of the SECURED ASSET would be made, as that alone would enable the owner/borrower to take all efforts to retain his or her ownership by tendering the dues of the SECURED CREDITOR before that date and time. Secondly, when such a SECURED ASSET of an immovable property is H 772 SUPREME COURT REPORTS [2014] 2 S.C.R.

A brought for sale, the intending purchasers should know the nature of the property, the extent of liability pertaining to the said property, any other encumbrances pertaining to the said property, the minimum price below which one cannot make a bid and the total liability of the borrower to the SECURED B CREDITOR. Since, the proviso to sub-rule (6) also mentions that any other material aspect should also be made known when effecting the publication, it would only mean that the intending purchaser should have entire details about the property brought for sale in order to rule out any possibility of c the bidders later on to express ignorance about the factors connected with the asset in question. Be that as it may, the paramount objective is to provide sufficient time and opportunity to the borrower to take all efforts to safeguard his right of ownership either by tendering the dues to the creditor before D the date and time of the sale or transfer, or ensure that the SECURED ASSET derives the maximum price and no one is allowed to exploit the vulnerable situation in which the borrower is placed.

31. At this juncture, it will also be worthwhile to refer to E Rules 8(1) to (3) and in particular sub-rule (3), in order to note the responsibility of the SECURED CREDITOR vis-a-vis the SECURED ASSET taken possession of. Under sub-rule (1) of Rule 8, the prescribed manner in which the possession is to be taken by issuing the notice in the format in which such notice F of possession is to be issued to the borrower is stipulated. Under sub-rule (2) of Rule 8 again, it is stated as to how the SECURED CREDITOR should publish the notice of possession as prescribed under sub-rule (1) to be made in two leading newspapers, one of which should be in the vernacular G language having sufficient circulation in the locality and also such publication should have been made seven days prior to the intention of taking possession. Sub.-rule (3) of Rule 8 really casts much more onerous responsibility on the SECURED· CREDITOR once possession is actually taken by its authorised H officer. Under sub-rule (3) of Rule 8, the property taken MATHEW VARGHESE v. M. AMRITHA KUMAR & 773 ORS. [FAKKIR MOHAM~D IBRAHIM KALIFULLA, J.]

possession of by the S~CURED CREDITOR should be kept A in its custody or in the 'custody of a person authorized or appointed by it and it is stipulated that such person holding possession should take as much care of the property in its custody as a owner of ordinary prudence would under similar circumstances take care of such property. The underlining B purport of such a requirement is to ensure that under no · circumstances, the rights of the owner till such right is transferred in the manner known to law is infringed. Merely because the provisions of the SARFAESI Act and the Rules enable the SECURED CREDITOR to take possession of such an c immovable property belonging to the owner and also empowers to deal with it by way of sale or transfer for the purpose of realizing the secured debt of the borrower, it does not mean that such wide power can be exercised arbitrarily or whimsically to the utter disadvantage of the borrower. D

32. Under sub-rule (4) of Rule 8, it is further stipulated that the authorized officer should take steps for preservation and protection of SECURED ASSETS and INSURE them if necessary till they are sold or otherwise disposed of. Sub-rule (4), governs all SECURED ASSETS, movable or immovable E and a further responsibility is created on the authorised officer to take steps for the preservation and protection of SECURED ASSETS and for that purpose can even INSURE such assets, until it is sold or otherwise disposed of. Therefore, a reading of Rules 8 and 9, in particular, sub-rule (1) to (4) and (6) of Rule F 8 and sub-rule (1) of Rule 9 makes it clear that simply because a secured interest in a SECURED ASSET is created by the borrower in favour of the SECURED CREDITOR, the said asset in the event of the same having become a NON-PERFORMING ASSET cannot be dealt with in a light-hearted manner by way G of sale or transfer or disposed of in a casual manner or by not adhering to the prescriptions contained under the SARFAESI Act and the abovesaid Rules mentioned by us. 33. Having analyzed the relevant statutory prescriptions H 774 SUPREME COURT REPORTS [2014] 2 S.C.R.

A under the SARFAESI Act, as well as, the Rules, 2002 it will be necessary to refer to the decisions placed before us on the above aspects, before examining the manner in which the sale of the SECURED ASSET of the 1st and 2nd Respondents was dealt with by the 4th Respondent-Bank and by effecting the sale B in favour of the Appellant herein.

34. Mr. Shyam Divan, learned Senior Counsel relied upon the decision in Narandas Karsondas (supra), in which the right of a mortgagor as prescribed under Section 60 of the T.P. Act has been spelt out. Under Section 60 of the T.P. Act, at any C time after the principal money fell due, there is a right in the mortgagor on payment or tender at a proper time and place of the mortgage money, to require a mortgagee to restore the property to the mortgagor with all rights prescribed as it stood prior to the mortgage. Under the proviso, the only impediment D would be that if such a right of a mortgagor stood extinguished by act of the parties or by the decree of a Court. Certain other conditions are also stipulated in the said provision for the mortgagor to seek for redemption of the mortgaged property. Dealing with the said provision, this Court held as under in E paragraphs 34 and 35. Paragraphs 34 and 35 are as under: "34. The right of redemption which is embodied in Section 60 of the Transfer of Property Act is available to the mortgagor unless it has been extinguished by the act of parties. The combined effect of Section 54 of the TransferF of Property Act and Section 17 of the Indian Registration Act is that a contract for sale in respect of immovable property of the value of more than one hundred rupees without registration cannot extinguish the equity of redemption. In India it is only on execution of theG conveyance and registration of transfer of the mortgagor's interest by registered instrument that the mortgagor's right of redemption will be extinguished. The conferment of power to sell without intervention of the Court in a mortgage deed by itself will not deprive the mortgagor of his right to H

MATHEW VARGHESE v. M. AMRITHA KUMAR & 775 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] redemption. The extinction of the right of redemption has A to be subsequent to the deed conferring such power. The right of redemption is not extinguished at the expiry of the period. The equity of redemption is not extinguished by mere contract for sale B 35. The mortgagor's right to redeem will survive until there has been completion of sale by the mortgagee by a registered deed. In England a sale of property takes place by agreement but it is not so in our country. The power to sell shall not be exercised unless and until notice in writing C requiring payment of the principal money has been served on the mortgagor ..Further Section 69(3) of the Transfer of Property Act shows that when a sale has been made in professed exercise of such a power, the title of the purchaser shall not be impeachable on the ground that no case had arisen to 68uthorize the. sale. Therefore, until the D sale is complete by registration the mortgagor does not lose right of redemption." (Emphasis added)

E 35. On a reading of the above paragraphs, we are able to discern the Ratio to the effect that a mere conferment of power to sell without intervention of the Court in the mortgage deed by itself will not deprive the mortgagor of his right to redemption, that the extinction of the right of redemption has Fto be subsequent to the deed conferring such power, that the right of redemption is not extinguished at the expiry of the period, that the equity of redemption is not extinguished by mere contract for sale and that the mortgagor's right to redeem will survive until there has been completion of sale by the mortgagee by a registered deed. The ratio is also to the effect G that the power to sell should not be exercised unless and until notice in writing requiring payment of the principal money has been served on the mortgagor. The above proposition of law of course was laid down by this Court while construing Section 60 of the T.P. Act. But as rightly contended by Mr. Shyam H 776 SUPREME COURT REPORTS [2014] 2 S.C.R.

A Divan, we fail to note any distinction to be drawn while applying the abovesaid principles, even in respect of the sale of SECURED ASSETS created by way of a secured interest in favour of the SECURED CREDITOR under the provisions of the SARFAESI Act, read along with the relevant Rules. We say B so, inasmuch as, we find that even while setting out.. the principles in respect of the redemption of a mortgage by .applying Section 60. of the T.P. Act, this Court has envisaged the situation where such mortgage deed providing for resorting to the sale of the mortgage property without the intervention of c the Court. Keeping the said situation in mind, it was held that the right of redemption will riot get extinguished merely at the expiry of the period mentioned in the mortgage deed. It was . also stated that the equity of redemption is not extinguished by mere contract for sale and the most important and vital principle D stated was that the mortgagor's right to redeem will survive until there has been completion of sale by the mortgagee by a registered deed .• The completion of sale, it is stated, can be held to be so unless and until notice in writing requiring payment of the principal money has been servea on the mortgagor. Therefore, it was held that until the sale is complete by E registration of sale, the mortgagor does not loose the right of redemption. It was also made clear that it was erroneous to suggest that the mortgagee would be acting as ·the agent of the mortgagor in selling the property.

F 36. When we apply the above principles stated with reference to Section 60 of the T.P. Act in respect of a secured interest in a SECURED ASSET in favour of the SECURED CREDITOR under the provisions of the SARFAESI Act and the relevant Rules applicable, under Section 13(1), a free hand is G given to a SECURED CREDITOR to resort to a sale without the intervention of the Court or Tribunal. However, under Section 13(8), it is clearly stipulated that the mortgagor, i.e. the borrower, who is otherwise called as a debtor, retains his full right to redeem the property by tendering all the dues to the H SECURED CREDITOR at any time before the date fixed for MATHEW VARGHESE v. M. AMRITHA KUMAR & 777 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

sale or transfer. Under sub-section (8) of Section 13, as noted A earlier, the SECURED ASSET should not be sold or transferred by the SECURED CREDITOR when such tender is made by the borrower at the last moment pefore the sale or transfer. The said sub-section also states that no further step should be taken by the SECURED CREDITOR for transfer or sale of that B SECURED ASSET. We find no reason to state that the principles laid down with reference to Section 60 of the T.P. Act, which is general in nature in respect of all mortgages, can have no application in respect of a secured interest in a SECURED ASSET created in favoar of a SECURED c CREDITOR, as all the above-stated principles apply in all fours in respect of a transaction as between the debtor and SECURED CREDITOR under the provisions of the SARFAESI Act. 37. Reliance was also placed upon the decision in Mardia D Chemicals Ltd. and others Vs. Union of India & others. -(2004) 4 SCC 311. In paragraph 54, while dealing with the contention raised on behalf of the SECURED CREDITOR that the right of redemption would be available to the mortgagor only . if the amourt due according to the SECURED -CREDITOR is E deposited, this Court held as under:

"54 .... Shri Sibal, however, submits that it is the amount due according to the secured creditor which shall have to be deposited to redeem the property. Maybe so, some F difference regarding the amount due may be there but it cannot be said that right of redemption of property is completely lost. In cases where no such dispute is there, the right can be exercised and in other cases the question of difference in amount may be kept open and got decided G before sale of property." (underlining is ours) 38. Here again we find that even if there were some difference in the amount tendered by the borrower while H 778 SUPREME COURT REPORTS [2014] 2 S.C.R. A exercising his right of redemption under Section 13(8), the question of difference in the amount should be kept open and can be decided subsequently, but on that score the right of redemption of the mortgagor cannot be frustrated. Elaborating the statement of law made therein, we wish to state that the B endeavour or the role of a SECURED CREDITOR in such a situation while resorting to any sale for the realization of dues of a mortgaged asset, should be that the mortgagor is entitled for some lenience, if not more to be shown, to enable the borrower to tender the amounts due in order to ensure that the c Constitutional Right to property is preserved, rather than it being deprived of. 39. In Ram Kishun (supra), paragraphs 13, 14 and 28 are relevant for our purpose, which are as under:

D "13. Undoubtedly, public money should be recovered and recovery should be made expeditiously. But it does not mean that the financial institutions which are concerned only with the recovery of their loans. may be permitted to behave like property dealers and be permitted further to E dispose of the secured assets in any unreasonable or arbitrary manner in flagrant violation of the statutory provisions. 14. A right to hold property is a constitutional right as well as a human right. A person cannot be deprived of his F property except in accordance with the provisions of a statute. (Vide Lachhman Dass v: Jagat Ram and State of M.P. v. Narmada Bachao Ando/an) Thus, the condition precedent for taking away someone's property or disposing of the secured assets, is that the authority must G ensure compliance with the statutory provisions. 28. In view of the above, the law can be 68ummarized to the effect that the recovery of the public dues must be made strictly in accordance with the procedure prescribed H by law. The liability of a surety is coextensive with that of MATHEW VARGHESE v. M. AMRITHA KUMAR & 779 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

the principal debtor. In case there are more than one surety A the liability is to be divided equally among the sureties for unpaid amount of loan. Once the sale has been confirmed it cannot be set aside unless a fundamental procedural error has occurred or sale certificate had been obtained by misrepresentation or fraud." B (Emphasis added) 40. The above principles laid down by this Court also makes it clear that though the recovery of public dues should be made expeditiously, it should be in accordance with the C procedure prescribed by law and that it should not frustrate a Constitutional Right, as well as the Human Right of a person to hold a property and that in the event of a fundamental procedural error occurred in a sale, the same can be set aside. D 41. Before taking up the facts of the case on hand, it is necessary to refer to certain other provisions referred to and relied upon by Mr. Shyam Divan, learned Senior Counsel appearing for the 8th Respondent. The learned Senior Counsel referred to Section 37 of the SARFAESI Act, Section 29 of the ERDDB Act and Rule 15 of the Income Tax Rules, 1962. The said provisions have to be noted in detail and therefore, the same are extracted hereunder: "Section 37 - Application of other laws not barred:-F

The provisions of this Act or the rules made thereunder shall be in addition to, and not in derogation of, the Companies Act, 1956 (1 of 1956), the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Securities and Exchange Board of India Act, 1992 (15 of G 1992), the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) or any other law for the time being in force. Section 29 - Application of certain provisions of Income-tax Act:- H 780 SUPREME COURT REPORTS [2014] 2 S.C.R. A The provisions of the Second and Third Schedules to the Income-tax Act, 1961 (43 of 1961), and the Income-tax (Certificate Proceedings) Rules, 1962, as in force from time to time shall, as far as possible, apply with necessary modifications as if the said provisions and the rules referred B to the amount of debt due under this Act instead of to the income-tax: Provided that any reference under the said provisions and the rules to the assessee shall be construed as a reference c to the defendant under this Act. Sch. II Part I Rule 15 - Adjournment or Stoppage of Sale:- (1) The Tax Recovery Officer may, in his discretion, adjourn aay .sale hereunder to a specified day and 'hour; and theD officer conducting any such sale may, in his discretion, adjourn the sale, recording his reasons for such adjournment:

Provided that, where the sale is made in, or within the E precincts of, the office of the Tax Recovery Officer, no such adjournment shall be made without the leave of the Tax Recovery Officer. (2) Where a sale of immovable property is adjourned under sub-rule (1) for a longer period than one calendar month,F a fresh proclamation of sale under this Schedule shall be made unless the defaulter consents to waive it. (3) Every sale shall be stopped if, before the lot is knocked down, the arrears and costs (including the costs of the G sale) are tendered to the officer conducting the sale, or proof is given to his satisfaction that the amount of such arrears and costs has been paid to the Tax Recovery Officer who ordered the sale." H 42. A close reading of Section 37 shows that the provisions MATHEW VARGHESE v. M. AMRITHA KUMAR & 781 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

of the SARFAESI Act or the rules framed thereunder will be in A addition to the provisions of the RDDB Act. Section 35 of the SAR FAES I Act states that the provisions of the SARFAESI Act will have overriding effect notwithstanding anything inconsistent contained in any other law for the time being in force. Therefore, reading Sections 35 and 37 together, it will have to be held that B in the event of any of the provisions of RDDB Act not being inconsistent with the provisions of the SARFAESI Act, the application of both the Acts, namely, SARFAESI Act and RDDB Act, would be complementary to each other. In this context reliance can be placed upon the decision in Transcore Vs. c Union of India and another reported in (2008) 1 sec 125. In paragraph 64 it is stated as under after referring to Section 37 of the SARFAESI Act.

" ....... According to American Jurisprudence, 2d, Vol. 25, p. 652, if in truth there is only one remedy, then the doctrine D of election does not apply. In the present case, as stated above. the NPA Act is an additional remedy to the ORT Act. Together they constitute one remedy and. therefore. the doctrine of election does not apply. Even according to Snell's Principles of Equity (31st Edn., p. 119), the doctrine E of election of remedies is applicable only when there are two or more co-existent remedies available to the litigants at the time of election which are repugnant and inconsistent. In any event. there is no repugnancy nor inconsistency between the two remedies. therefore, the F doctrine of election has no application." (Emphasis added) 43. A reading of Section 37 discloses that the application of SARFAESI Act will be in addition to and not in derogation G of the provisions of the RDDB Act. In other words, it will not in any way nullify or annul or impair the effect of the provisions of the RDDB Act. We are also fortified by our above statement of law as the HEADING of the said Section also makes the position clear that application of other laws are not barred. The H 782 SUPREME COURT REPORTS [2014] 2 S.C.R.

A effect of Section 37 would, therefore, be that in addition to the provisions contained under the SARFAESI Act, in respect of proceedings initiated under the said Act, it will be in order for a party to fall back upon the provisions of the other Acts mentioned in Section 37, namely, the Companies Act, 1956, B the Securities Contracts (Regulation) Act, 1956, the Securities and Exchange Board of India Act, 1992, the Recovery of Debts Due to Banks and Finances Institutions Act, 1993, or any other law for the time being in force. On this aspect, it would be apposite to refer to a principle set down in Eastern Counties c etc. Railway Vs. Marriage reported in (1861) 9 HLC 32, as stated in Craies on Statute Law, Seventh Edition, p.207. The proposition of law as regards the HEADINGS of a provision has been succinctly stated as under: "These various headings", "are not to be treated as if they D were marginal notes, or were introduced into the Act merely for the purpose of classifying the enactments. They constitute an important part of the Act itself, and m~y be read not only as explaining the sections which immediately follow them, as a preamble to a statute may be looked to E explain its enactments, but as affording as it appears to me a better key to the constructions of the sections which follow them than might be afforded by the mere preamble." (Emphasis added)

F 44. We can also rely upon a similar principle declared by this Court by His Lordship Justice Subba Rao, as His Lordship then was, speaking for the Bench in Bhinka and others Vs. Charan Singh reported in AIR 1959 SC 960. In paragraph 15, the learned Judge after referring to the HEADING of Section G 180 of the UP Tenancy Act, (17 of 1939) held as under. "The heading reads thus: "Ejectment of person occupying land without Title." "Maxwell On Interpretation of Statutes", 10th Edn., gives H the scope of the user of such a heading in the MATHEW VARGHESE v. M. AMRITHA KUMAR & 783 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] interpretation of a section thus, at p.50: A "The headings prefixed to sections or sets of sections in some modern statutes are regarded as preambles to those sections. They cannot control the plain words of the statute but they may explain ambiguous words". B

45. Reference to the above principles laid down in the various decisions also supports our conclusion that the application of the SARFAESI Act will be in addition to, in the present case to Section 29 of the RDDB Act. Once we steer clear of the said position without any hesitation, it can be held C that whatever stipulations contained in Section 29 as regards the application of certain provisions of the Income Tax Act, 1961 in particular Schedule 2 Part I Rule 15 of the Income Tax Rules, 1962 for effecting a sale or transfer would apply automatically. We have already extracted Section 29 of the RDDB Act, as D well as Schedule 2 Part I Rule 15 of the Income Tax Rules, 1962. Therefore, what is to be considered is as to what is the mode prescribed under the above provisions, namely, Rule 15 prescribed under Schedule 2 Part I of the Income Tax Rules, 1962. E

46. Section 29 of the RDDB Act is an enabling provision under which the Second and Third schedule to the Income Tax Act, 1961 (43 of 1961) and the Income Tax Rules, 1962 can be applied as far as possible with necessary modifications as Fif the provisions and the rules are referable to the DEBT DUE, instead of the income tax due. Therefore, fictionally, by virtue of Section 29 of the RDDB Act, the mode and method by which a recovery of income tax can be resorted to under the Second and Third Schedule to the Income Tax Act and the Income Tax Rules, 1962 have to be followed. Therefore, a reading Section G 37 of the SARFAESI Act and Section 29 of the RDDB Act, the only aspect which has to be taken care of is that while applying the procedure prescribed under Rule 15 of the Income Tax Rules, 1962, no conflict with reference to any of the provisions of the SARFAESI Act, takes place. H 784 SUPREME COURT REPORTS [2014] 2 S.C.R.

A 47. Mr. Shyam Divan, learned Senior Counsel, also referred to Order XXI Rule 64 to 69 of the Civil Procedure Code in support of his submission that by virtue of Section 37 of SARFAESI Act, as it states that the provisions of SARFAESI Act will be in addition to and not in derogation of any other law B for time being in force apart from Companies Act, RDDB Act etc., the provisions contained in CPC can also be imparted to support the stand of the Respondents 1 & 2. Since we have held that by applying Section 37 of SARFAESI Act, read along with Section 29 of the RDDB Act, the requirement of the C statutory prescription under Section 13(8) read along with Rule 8 and 9(1) of the Security Interest Rule would be sufficiently supported, we do not find any necessity to delve into the submission made by referring to Rules 64 to 69 of Order XXI CPC.

D 48. Keeping the said basic principle in applying the above provisions in mind, when we refer to Rule 15 of the Income Tax Rules, 1962, in the first place it will have to be stated that a reading of the said rule does not in any way conflict with either Section 13(8) of the SARFAESI Act or Rules 8 and 9 of the E Rules, 2002. As far as sub-rule (1) of Rule 15 is concerned, it only deals with the discretion of the Tax Recovery Officer to adjourn the sale by recording his reasons for such adjournment. The said Rule does not in any way conflict with either Rules 8 or 9 or Section 13, in particular sub-section (1) or sub-section F (8) of the SARFAESI Act. Therefore, to that extent there is no difficulty in applying Rule 15. As far as sub-rule (2) is concerned, the same is clear to the effect that a sale of immovable property once adjourned under sub-rule (1) for a longer period than one calendar month, a fresh proclamation of sale should be made G unless the defaulter consents to waive it. The said sub-rule alsp does not conflict with any of the provisions of the SARFAESI Act, in particular Section 13 or Rules 8 and 9. In fact there is no provision relating to grant of adjournment or issuance of a fresh proclamation for effecting the sale after the earlier date H of sale was not adherered to in the SARFAESI Act. In such MATHEW VARGHESE v. M. AMRITHA KUMAR & 785 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

circumstances going by the prescription contained in Section A 37 of the SARFAESI Act, as we have reached a conclusion that the provision contained in Section 29 of the RDDB Act will be in addition to and not in derogation of the provisions of the SARFAESI Act, the provisions contained in Rule 15, which is applicable by virtue of the stipulation contained in Section 29 B of the RDDB Act, whatever stated in sub-rule (2) of Rule 15 should be followed in a situation where a notice of sale notified as per Rules 8 and 9(1) of the Securitisation Trust Rules, read along with Section 13(8) gets postponed. In our considered view such a construction of the provisions, namely, Sections 37, c 13(8) and 37 of the SARFAESI Act, read along with Section 29 with the aid of Rule 15 could alone be made and in no other manner.

49. We, therefore, hold that unless and until a clear 30 days notice is given to the borrower, no sale or transfer can be D resorted to by a SECURED CREDITOR. In the event of any such sale properly notified after giving 30 days clear notice to the borrower did not take place as scheduled for reasons which cannot be solely attributable to the borrower, the SECURED CREDITOR cannot effect the sale or transfer of the SECURED E ASSET on any subsequent date by relying upon the notification issued earlier. In other words, once the sale does not take place pursuant to a notice issued under Rules 8 and 9, read along with Section 13(8) for which the entire blame cannot be thrown on the borrower, it is imperative that for effecting the sale, the F procedure prescribed above will have to be followed afresh, as the notice issued earlier would lapse. In that respect, the only other provision to be noted is sub-rule (8) of Rule 8 as per which sale by any method other than public auction or public tender can be on such terms as may be settled between the parties G in writing. As far as sub-rule (8) is concerned, the parties referred to can only relate to the SECURED CREDITOR and the borrower. It is, therefore, imperative that for the sale to be effected under Section 13(8), the procedure prescribed under Rule 8 read along with 9(1) has to be necessarily followed, H 786 SUPREME COURT REPORTS [2014] 2 S.C.R.

A inasmuch as that is the prescription of the law for effecting the sale as has been explained in detail by us in the earlier paragraphs by referring to Sections 13(1 ), 13(8) and 37, read along with Section 29 and Rule 15. In our considered view any other construction will be doing violence to the provisions of the B SARFAESI Act, in particular Section 13(1) and (8) of the said Act.

50. Having pronounced the legal position as above, when we refer to the facts of the present case, the initial sale was C notified to take place on 25.09.2007. The paper publication was made on 23.08.2007. Therefore, applying Rule 9(1) read along with the proviso to sub-rule (6) of Rule 8, there can be no quarrel as to the procedure followed in effecting the publication for resorting to sale on 25.09.2007. When it comes to the question of the intimation to the borrower as required D under sub-rule (6) of Rule 8, we find that admittedly Respondents 1 and 2 were informed by the 4th Respondent-Bank only on 30.08.2007. Therefore, as the sale date was 25.09.2007 it did not fulfill the mandatory requirement of 30 clear days notice to the borrower as stipulated under sub-rule (6) of E Rule 8. In fact, on this score itself it can be held that if the sale had been effected on 25.09.2007, it would not have been in accordance with Section 13(8) of the SARFAESI Act, read along with Rules 8 and 9(1). But at the intervention of the Court, namely, the orders passed in Writ Petition 27182 of 2007 dated F 20.09.2007, the sale date fixed on 25.09.2007 was adjourned by six weeks. In any case, the sale was not effected even after the six weeks period expired as directed in the said Order dated 20.09.2007. The Securitisation Application No.20 of 2007, came to be disposed of by the ORT only on 27.12.2007. G 51. Therefore, once the Securitisation Application of the borrowers, namely, Respondents 1 and 2 was dismissed on 27.12.2007, even assuming that there was no impedimer.it for the SECURED CREDITOR, namely, the 4th Respondent-Bank to resort to sale under the provisions of the SARFAESI Act, as H

MATHEW VARGHESE v. M. AMRITHA KUMAR & 787 ORS. [FAKKIR MOHAMED IBRAHIM KALIF.ULLA, J.]

held by us in the earlier paragraphs, there should have been a A fresh notice issued in accordance with Rules 8(6) and 9(1) of the Rules, 2002. Unfortunately, the 4th Respondent-Bank stated to have effected the sale on 28.12.2007 by accepting the tender of the Appellant and by way of further process, directed the Appellant to deposit the 25% of the amount on that very day B and also directed to deposit the balance amount within 15 days, which was deposited by the Appellant on 11.01.2008. In fact, after the deposit of the 25% of the amount on 28.12.2007, the 4th Respondent-Bank stated to have confirmed the sale in favour of the Appellant on 31.12.2007. After the deposit of the c balance amount on 11.01.2008 by coml'.Tlunication dated 02.02.2008, the 4th Respondent-Bank informed the 1st and 2nd Respondents about the confirmation of sale and thereby, provided no scope for Respondents 1 and 2 to tender the dues of the SECURED CREDITOR, namely, the 4th Respondent- D Bank with all charges, expenses etc., as has been provided under Section 13(8) of the SARFAESI Act. Therefore, the whole procedure followed by the 4th Respondent-Bank in effecting the sale on 28.12.2007 and the ultimate confirmation of the sale on 11.01.2008, stood vitiated as the same was not in conformity with the provisions of the SARFAESI Act and the E Rules framed thereunder. Though, such a detailed consideration of the legal issues was not made by the Division Bench while setting aside the sale effected in favour of the Appellant, having regard to the construction of the provisions of the SARFAESI Act, the RDDB Act and the relevant Rules, F we are convinced that the Judgment of the Division Bench dated 08.03.2010, passed in Writ Appeal 1·555 of 2009, was perfectly justified and we do not find any infirmity with the same.

52. We now take up for consideration the correctness of G the Order of the Division Bench dated 18.06.201 O in I.A. 437 of 2010 in Writ Appeal 1555 of 2009 and the order dated 08.07.2010 in l.A.507 of 2010 in Writ Appeal 1555 of 2009. Though we have held that the Judgment of the Division Bench in Writ Appeal 1555 of 2009 cannot be found fault with, when H 788 SUPREME COURT REPORTS [2014] 2 S.C.R. A we examined the subsequent Orders dated 18.06.201 O and 08.07.2010 in l.A.437 of2010 and l.A.507 of 2010, we are of the view that in the peculiar facts of this case and the ultimate directions issued by the Division Bench in its marn Judgment of 08.03.2010 in Writ Appeal 1555 of 2009, the said Orders B could not have been validly issued. 53. In the foremost, it will have to be noted that the Olvision Bench of the High Court while allowing the Writ Appeal in its order dated 08.03.2010, held as under: c "(i} The sale by the Bank of the appellant's property in favour of the fifth respondent will stand set aside and the sale deed shall stand invalidated on condition that appellant gives a DD for Rs.2 crores from a local Branch of a Nationalised Bank in D favour of the fifth respondent and the same will be handed over to him within two months from now. If payment is not made as above, sale in favour of the fifth respondent will stand confirmed and Writ Appeal will stand dismissed.

E (ii} If appellant makes payment as above, and sale gets cancelled by operation of judgment, then on giving DD the fifth respondent will hand over original sale deed obtained by him from the Bank to the appellant for the appellant to produce before the F Sub Registry and revenue authorities for cancellation of registration, mutation, if any effected, and for restoration of property in the records of the Sub Registry and revenue authorities in favour of the appellant. G (iii} The Bank will remit the excess amount available with them to the Tax Recovery Officer in pursuance to the demand to be credited in 'the account of the appellant, and it is for the appellant to claim refund, H if eligible for him. MATHEW VARGHESE v. M. AMRITHA KUMAR & 789 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] (iv) We l@ave it open to the appellant to claim refund A of stamp duty, if refund is eligible. However, we make it clear that in view of the above judgment, if there is eligibility for refund of stamp duty, the same, should be the appellant." B

54. In the High Court, the Appellant herein was arrayed as the 5th Respondent. The Division Bench taking into account the amount remitted by the Appellant, namely, Rs.1,27,00, 101/- and the stamp duty and registration charges of Rs.23,00,000/- in all Rs.1,50,00, 101 /- directed Respondents 1 and 2 to pay a lump sum of Rs.2,00,00,000/- to the Appellant for cancelling the C sale. The amount of 2,00,00,000/- was arrived at taking into account the rate of interest at 18% per annum and the stamp duty and registration charges spent by the Appellant. However, the direction number (i) made it clear that while the sale in favour of the Appellant would stand set aside and invalidated on a D condition that Respondents 2 and 3 forwarded a Demand Draft of Rs.2,00,00,000/- from a local branch of a Nationalised Bank in favour of the Appellant by handingI it over to him within 2 months from the date of the Order, namely, 08.03.2010, made it tacitly clear that if the payment was not made as directed, E the sale in favour of the Appellant would stand confirmed and the writ appeal would stand dismissed. Therefore, subject to the compliance of the directions contained in sub-para (i) of paragraph 5, the cancellation of the sale in favour of the Appellant was ordered. Under sub-para (ii) of paragraph 5, F once the sale gets cancelled by virtue of the operation of the Judgment, namely, by handing over the Demand Draft in favour of the Appellant, the original sale deed obtained by the Appellant was directed to be produced before the Sub-Registrar and other Revenue Authorities for the cancellation of G registration/mutation etc. On such compliance of the said direction contained in sub-para (ii), the restoration of the property in the records of the sub-registry and revenue authorities were also directed to be effected in favour of Respondents 1 and 2. Under sub-para (iii) of paragraph 5, the H

SUPREME COURT REPORTS [2014] 2 S.C.R. 790 A 4th Respondent-Bank was directed to remit the excess amount available with it, i.e over and above the dues to the bank to the Tax Recovery Officer, in pursuance to their demand by crediting into the account of Respondents 1 and 2, with further liberty to Respondents 1 and 2 to claim for refund if they were eligible. B Lib~rty was also given to Respondents 1 and 2 to claim refund of stamp duty if eligible. 55. The said period of two months stipulated in sub-para

(i) of paragraph 5 expired by 08:05.2010. It was pointed out to us by Mr. Krishnan, learned Senior Counsel for the Appellant C that the very application seeking further six weeks time from 08.05.2010 for giving the Demand Draft of Rs.2,00,00,000/- to the Appellant as per the Judgment dated 08.03.2010, was filed only on 10.06.2010 and that the Division Bench thereafter passed the present Order dated 18.06.2010 in l.A.437, i.e. D more than a month after the expiry of the initial two months period, ·namely, 08.05.2010. Before adverting to the details of the Order dated 18.06.2010 passed in I.A. 437 pf 2010, at the very out:;et it will have to be stated that having regard to the specific direction contained in sub-para (i) and (ii) of para 5 of E the Judgment dated 08.03.2010 in Writ Appeal 1555 of 2009, by 08.05.2010, when Respondents 1 and 2 failed to hand over the Demand Draft of Rs.2,00,00,000/-, as directed by the Division Bench to the Appellant, the Writ Appeal stood dismissed without any further reference to anyone, even to the F Court. In fact, since the application for extension, namely, I.A. 437 of 2010 came to be filed only on 10.06.2010, it should be held that there was no right in Respondents 1 and 2 or for the 8th Respondent herein to seek for any further indulgence before the Division Bench for further extension of time. It is relevant to G note that the two months period expired on 08.05.2010. Thereafter, Respondents 1 and 2 took their own time to file the application for extension, namely, after more than 30 days, by which time the writ appeal stood dismissed and there was no right available with Respondents 1 and· 2 or with the 8th H Respondent herein to seek for any relief for claiming any right \

MATHEW VARGHESE v. M. AMRITHA KUMAR & 791 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] in favour of the 8th Respondent, much less for cancellation of A the sale already effected in favour of the Appellant herein.

56. When we refer to the said order dated 18.06.2010 to examine the reasons which weighed with the Division Bench, we find that the sum and substance of the grievance expressed 8 on behalf of Respondents 1 and 2 herein was that they had to raise funds by arranging for the sale of the very same SECURED ASSET, which took time as many buyers were reluctant to come forward because of the chance of continued litigation. By making reference to the stand of Respondents 1 C and 2, the Division Bench without anything more, accepted the said reason and by allowing the I.A. permitted the 8th Respondent herein to deposit 2,03,00,000/- by 19.06.2001 and on such deposit it held that the time granted for payment in terms of the Judgment dated 08.03.2010, stood extended till 20.06.2010. It further held that on such deposit being made, the D sale made by the 4th Respondent-Bank in favour of the Appellant would be cancelled and the 4th Respondent should effect a sale in favour of the 8th Respondent herein. The other directions contained in sub-para (iv) of para 5 was maintained. In the subsequent l.A.507 of 2010 the Division Bench directed E the 4th Respondent-Bank to execute the sale in favour of the 8th Respondent herein, taking note of the fact of deposit of Rs.2,03,00,000/- by the 8th Respondent with the 4th Respondent-Bank. F

57. Be that as it may, after the Order dated 18.06.2010 and 08.07.2010, the Appellant filed the Special Leave Petition in this Court on 26.07.2010 and the Special Leave Petition came up for orders on 30.07.2010. While directing the Registry to list the SLP on the notified date, the parties were directed G to maintain status quo with regard. to the impugned order of the High Court dated 08.03.2010 till then. Thereafter, on 09.08.2010, service of notice on the Respondent was dispensed with since a caveat was entered on behalf of the 1st and 8th Respondents. While granting time for filing counter H 792 SUPREME COURT REPORTS [2014] 2 S.C.R. A affidavit, as well as rejoinder, the Interim Order dated 30.07.2010, was directed to be continued. Vide Order dated 08.08.2013, while declining to vacate Status Quo Order dated 30.07.2010, the Special Leave Petition itself was directed to be listed for final hearing. Though the 8th Respondent is stated B to have deposited the sum of Rs.2,03,00,000/- with the 4th Respondent-Bank, as per the Order dated 18.06.201 O in IA No.437 of 2010, the other directions in the main Order dated 08.03.2010 in Writ Appeal No.1555 of 2009 and the subsequent directions contained in the Orders dated c 18.06.2010 and 08.07.2010, were not carried out. The sale which was already fixed in favour of the Appellant continued to remain in force and the sum of Rs.2,03,00,000/- deposited by the 8th Respondent remains with the 4th Respondent-Bank.

58. In the light of our conclusion that the Judgment passed D in Writ Appeal No.1555 of 2009 dated 08.03.2010, was a self contained one and due to the failure of the 1st and 2nd Respondents in not handing over the Demand Draft for Rs.2,00,00,000/- to the Appellant within the stipulated time limit, namely, on or before 08.06.2010, the sale effected in favour of E the Appellant stood confirmed. Inasmuch as we have found there was absolutely no justifiable grounds for the Division Bench to grant further time in its Order dated 18.06.2010, we are of the view that it will be travesty of justice if the earlier Judgment dated 08.03.2010, which worked itself out on F 08.05.2010, is to be reversed for the flimsy grounds raised by the 1st and 2nd Respondents that they could not raise funds in spite of two months time granted to them for paying a sum of Rs.2,00,00,000/- in favour of the Appellant. We have also found that while the time granted by the Division Bench expired by G 08.05.2010, the application for extension was filed 40 days later, i.e. on 10.06.2010. Therefore, for such a recalcitrant attitude displayed by Respondents 1 and 2 in respect of a litigation which involved very high stakes, the Division Bench should not have come for their rescue in the absence of any H weighty reasons. The reason adduced on behalf of Respondent MATHEW VARGHESE v. M. AMRITHA KUMAR & 793 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

1 and· 2 is the standard reason which any party used to plead A while seeking for extension of time. Since very valuable rights of the Appellant were at stakes and the Order of the Division Bench also remained in force, in so far as it related to the cancellation of the sale deed, which existed in favour of the Appellant till 08.05.2010 and by virtue of the non-compliance B of the conditions imposed in the said Judgment dated 08.03.2010 by the 1st and 2nd Respondents the ownership rights of the Appellant got crystallized on and after 09.05.2010, we fail to find any justification at all for the Division Bench to interfere with the said right in such a casual manner by c accepting the flimsy reasons of the 1st and 2nd Respondents. At the risk of repetition it will have to be stated that the ownership right which got crystallized in favour of the Appellant as on 09.05.2010, could not have been snatched away by the Division Bench by passing the present impugned order dated D 18.06.2010 and 08.07 .2010. Whatever stated by us with reference to the right of ownership of the 1st and 2nd Respondents with reliance upon Article 300A of the Constitution / would equally apply to the Appellant as well in such a situation. Therefore, such a right which accrued in favour of the Appellant E ought not to have been interfered with by the Division Bench and the Orders passed in the interim application filed at the instance of the 1st and 2nd Respondents, along with the 8th Respondent herein are not justified°' Therefore, while upholding the Judgment of the Division Bench dated 08.03.2010 passed F in Writ Appeal 1555 of 2009, for the reasons stated herein, the Orders dated 18.06.2010 and 08.07.2010 passed in I.A. Nos.437 and 507 of 2010 are set aside.

59. Though we have found good grounds in favour of the Appellant to set at naught the above Orders passed in I.A. G Nos.437 and 507 of 2010, we cannot also ignore one other very relevant factor, namely, that the value of the property which was knocked out in favour of the Appellant in a sum of Rs.1,27,00, 101/- by confirming the sale by the 4th Respondent-Bank on 31.12.2007 and 11.01.2008, the same was found to H 794 SUPREME COURT REPORTS [2014] 2 S.C.R. A be not in accordance with the provisions of the SARFAESI Act. Since the proper procedure for effecting the sale was not followed, it will have to be held that the price fetched through the Appellant cannot be held to be the correct price for the mortgaged property involved in these proceedings. Further, the B very fact that in the year 2010 the property could fetch Rs.2,03,00,000/-, we are of the view that in all fairness even while confirming the Order of the Division Bench, by which the sale in favour of the Appellant came to be confirmed, the difference in the sale price should be directed to be paid by c the Appellant. While the price paid by the Appellant was Rs.1,27,00, 101/-, the price ultimately fetched at the instance of the 1st and 2nd Respondents was Rs.2,03,00,000/-. Therefore, after giving credit to Rs.1,27,00,000/-, the Appellant would still be liable to pay a further sum of Rs.76,00,000/- to the 1st and 2nd Respondents.0

60. Accordingly, while disposing of these appeals as directed above, we pass the following Order: (A) The 4th Respondent-Bank shall refund a sum of E Rs.2,03,00,000/- deposited by the 8th Respondent, along with 18% interest. Such refund shall be made by the 4th Respondent to the 8th Respondent by way of Bank's Pay Order within two weeks from the date of production of copy of this Order. F (B) The 4th Respondent-Bank having adjusted its due from and out of the sale consideration paid by the Appellant, shall pay the balance amount to the Tax Recovery Officer pursuant to the demand, which is to be credited in the account of the Appellant. Such deposit shall also be made G along with accrued interest @ 18% per annum while making the deposit. It is for the Respondents 1 & 2 to claim refund if they are eligible for the same by approaching the concerned Authority under the Income Tax Act and in the manner known to Law. H MATHEW VARGHESE v. M. AMRITHA KUMAR & 795 ORS. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] (C) The Appellant shall deposit the balance sale A consideration determined by us in a sum of Rs. 76,00,000/

- with the 4th Respondent-Bank, which shall be kept in an interest bearing account. If there is any further demand by way of tax recovery, it would be open for the Tax Recovery Officer concerned to raise such a demand and forward it B to the 4th Respondent-Bank and on such demand being made, the 4th Respondent-Bank shall deposit the same to the credit of the Tax Recovery Officer in the name of the 1st and 2nd Respondents and it will be for the 1st and 2nd Respondents to claim for refund if eligible. If there is no C tax due, the 4th Respondent - Bank shall release the said sum of Rs.76,00,000/- forthwith on deposit being made by the Appellant to Respondents 1 and 2. (D) Such deposit of Rs. 76,00,000/- shall be made by the Appellant within four weeks from the date of receipt of the D copy of this Judgment. As and when the Appellant deposit the sum of Rs.76,00,000/- towards the sale price of the property transferred in its favour, necessary receipt for the said payment by way of additional sale price shall be executed by the 4th Respondent-Bank along with the 1st E and 2nd Respondents and whatever stamp duty and registration charges payable for that purpose shall be borne by the Appellant.

(E) If the Appellant fails to deposit the balance sale F consideration of Rs.76,00,000/- within the stipulated time limit, as directed in paragraph 60(0), the sale already effected by the 4th Respondent-Bank shall stand cancelled automatically without any further reference to this Court. Eventually, the sale consideration deposited by the Appellant with the 4th Respondent-Bank shall be refunded G to him after deducting the amount due and payable by the borrower as on the date of previous sale i.e. 31.12.2007 and the balance amount alone shall be refunded to the Appellant. Further the 4th Respondent-Bank shall bring the H 796 SUPREME COURT REPORTS [2014] 2 S.C.R.

A property for auction afresh, following the provisions of the SARFAESI Act. Thereafter, from and out of the money realized from the said sale, the 4th Respondent-Bank shall refund the amount retained by it towards the amounts due from the borrower to the Appellant. After paying the said B amount to the Appellant, it shall arrange for refund of the balance amount to the 1st and 2nd Respondents after meeting whatever tax liability to the Income Tax Department or any other statutory dues for which any demand was already raised and pending with the 4th Respondent-Bank. C 61. With the above directions, appeal filed against the Judgment dated 08.03.2010 passed in Writ Appeal No.1555 of 2009 stands dismissed and appeals filed against the Orders dated 18.06.2010 and 08.07.2010, passed in I.A. Nos.437 of 2010 and 507 of 2010 in Writ Appeal No.1555 of 2009 stand D allowed. No costs. D.G. Appeals disposed of.