Judgment :- S.J. Mukhopadhaya, J. As all the cases arise out of a common proceeding of the Debt Recovery Appellate Tribunal, Chennai, (hereinafter referred to as DRAT) and common question of law involved, they were heard together and are being disposed of by this common judgment. 2. In W.P. No.23515/05, the petitioner has challenged the order dated 13th June, 2005; in W.P. No.24534/05 and CRP No.1841/05, the petitioners have challenged the common order dated 13th June, 2005, passed by the DRAT, Chennai, in M.A. (SA) No.60/05 in S.A. No.19/04; in W.P. Nos.26849/05 and 27511/05, the petitioners have challenged the order dated 13th June, 2005, passed by DRAT, Chennai, in M.A. (S.A.) No.59/05. The petitioner in W.P. No.26489/05 has also challenged the order dated 29th July, 2005, passed in I.A. No.98/05 in M.A. (S.A.) No.59/05 whereby extension of time was allowed. In W.P. No.30664/05, the petitioner, ICICI Bank, has challenged the proceeding and notices issued on different dates in R.C. No.1985/91/A3. The same petitioner, ICICI Bank, in W.P. No.30860/05 has challenged the order dated 9th Aug., 2005, passed in R.A. (SARFAESI) No.25/05. 3. One of the question raised in these cases is: “Whether a guarantor, who also falls within the meaning of “borrower”, u/s 2 (f) of the Securities and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (hereinafter referred to as SARFAESI Act, 2002 – also known as NPA) is entitled to have notice under sub-section (2) of Section 13 of the Act, if the secured creditor takes recourse to one or more measures under sub section (4) of Section 13 to recover his secured debt?” 4. For determination of the aforesaid issue, it is not necessary to discuss all the facts except the relevant ones, as mentioned hereunder: - In December, 1970, M/s. Madras Petrochem Limited (hereinafter referred to as borrower) availed loan from ICICI Bank (hereinafter referred to as bank). M/s. Mahavir Plantation Private Limited, a sister-concern of the borrower, had given a corporate guarantee (hereinafter referred to as guarantor) as security for dues and repayment of the loan facilities availed by the borrower. The borrower had also borrowed loan from other financial institutions, such as IDBI, Tamil Nadu Industrial Investment Corporation of India, LIC, Indian Bank, Bank of India, Central Bank of India and Standard Chartered Bank, but failed to repay the borrowed amount. The borrower had also borrowed loan from other financial institutions, such as IDBI, Tamil Nadu Industrial Investment Corporation of India, LIC, Indian Bank, Bank of India, Central Bank of India and Standard Chartered Bank, but failed to repay the borrowed amount. The financial institutions moved before BIFR for reference, but the borrower company having failed to comply with the scheme, the BIFR recommended for winding up of the company. The appeal to AIFR was also dismissed. 5. ICICI Bank, for enforcement of security interest, issued notice u/s 13 (2) of the SARFAESI Act on 20th Nov., 2002, asking the borrower, M/s. Madras Petrochem Ltd., to discharge its full liabilities. But having received no reply, ICICI Bank, u/s 13 (4), took possession of the assets of M/s.Madras Petrochem Ltd. on 9th May, 2003. A recall notice to the borrower was issued on 17th June, 2003, showing claim of Rs.7,31,06,822/= as on 15th June, 2003. A notice of sale was also issued under Rule 8 (6) on 3rd July, 2003, followed by paper publication effected for sale issued on 8th Aug., 2003, fixing 23rd Aug., 2003, as the date. Original Application was filed before DRT, Mumbai in O.A. No.350/03 for recovery of a sum of Rs.7,31,06,822/=. Recall notice was also issued to the guarantor on 5th Sept., 2003. 6. The borrower, M/s. Madras Petrochem Ltd., preferred S.A. No.19/04 before DRT, Chennai, for recovery on 20th May, 2004. In the said appeal, notice was issued to ICICI Bank on 8th June, 2004. The prayer for interim stay was rejected. However, the bank was directed to inform the Tribunal in advance its future course of action on the matter. On 16th Aug., 2004, public auction was fixed for 16th Sept., 2004, keeping the upset price as follows : i) Lot A – Immovable Properties – Reserve Price -Rs. 25 Crores ii) Lot B – Movable Properties – Reserve Price -Rs.1.25 Crores Total (Composite Lot A and Lot B) – Reserve Price -Rs.26.25 Crores On 3rd Sept., 2004, the Tribunal granted interim stay of sale of the properties, but on being mentioned, the DRT, Chennai, vide its order dated 14th Sept., 2004, permitted ICICI Bank to proceed with the sale on 16th Sept., 2004 with condition that it shall not be confirmed without the permission of DRT, Chennai. On 16th Sept., 2004, sale was conducted. For Lot-A no individual bid was submitted. On 16th Sept., 2004, sale was conducted. For Lot-A no individual bid was submitted. For Lot-B, the maximum bid received was for Rs.2.10 Crores, but after several rounds of auction, the highest bid was offered by one M/s. SS Enterprises for Rs.4.62 Crores with second highest bid of Rs.4.61 Crores by M/s.Gurudev Enterprises. For composite lot, Rs.15.25 Crores was the offer received, but after public auction commenced, the highest bid was for Rs.15.45 Crores by M/s.Rahamath Steel. On 23rd Sept., 2004, a memo was filed before DRT, Chennai, informing about the sale proceeding. Only thereafter, on 9th Dec., 2004, letter was received from M/s. Madras Petrochem Ltd., and M/s.Mahavir Plantation Private Ltd., through their advocate to the effect that they were agreeable to purchase the property of the borrower company for the price offer received at the public auction. The said letter was written by one Mr. Sailesh T.Bhansali, as the Managing Director of both M/s. Madras Petrochem Ltd. and M/s. Mahavir Plantation Private Ltd. 7. On 19th Jan., 2005, the DRT passed final order in S.A. No.19/04, which held that the borrower company, M/s.Madras Petrochem Ltd., was liable to pay an amount of Rs.7,32,19,142/= alongwith interest and other expenses. The borrower, M/s. Madras Petrochem Ltd., was also directed to pay the amount within thirty days failing which the bank was entitled and at liberty to proceed further under the SARFAESI Act to recover the aforesaid amount, subject to the following conditions: - a) Lot-A – Immovable properties, cannot be sold for less than Rs.25 Crores, till the borrower company gives their express consent for such sale. But the bank was at liberty to obtain suitable orders from DRT, Mumbai, for a registered sale and for reconversion of the property. The appeal was partially and conditionally allowed to that effect. b) ICICI Bank was given liberty to confirm the sale in respect of Lot-B – Movable properties, subject to direction of the DRT, by giving a fresh opportunity to bidders for the joint lots to make an improved offer for not less than Rs.4.63 Crores, including the highest bidder of Lot-B. In case no bidder comes forward, ICICI Bank was to confirm the sale in favour of M/s. Rahamath Steel. 8. 8. The guarantor, M/s.Mahavir Plantations Private Ltd., thereafter, filed writ petition before this Court in W.P. No.6462/05 for issuance of a certiorarified mandamus by calling for the records in S.A. No.19/04 and to quash the order dated 19th Jan., 2005, with further prayer to direct the concerned respondents to pass fresh orders after reconverting Lot-A and Lot-B properties and by affording opportunity to the guarantor. In the meantime, by 7th March, 2005, sale certificate was issued and the following payments were received on different dates :- 1st March, 2005 -Rs.2,56,25,000/= 2nd March, 2005 -Rs.1,30,00,000/= 7th March, 2005 -Rs. 78,75,000/= This Court, on 11th March, 2005, asked the guarantor, M/s.Mahavir Plantation Private Ltd., whether they were prepared to pay 50% of the demand raised by ICICI Bank, but the counsel having expressed inability, the said writ petition was dismissed on the said date. A third party, M/s.K.K. Steel Enterprises, filed application in S.A. No.16/05 to accept their offer for Rs.4,83,40,000/=. It was rejected on 11th March, 2005. Against order dated 11th March, 2005, passed in W.P. No.6462/05, the guarantor, M/s.Mahavir Plantation Private Ltd., preferred W.A. No.734/05, which was also dismised by a Bench of this Court on 12th April, 2005, on the ground of alternative remedy. Thereafter, the guarantor preferred an appeal u/s 18 of SARFAESI Act before DRAT, Chennai, in April, 2005, registered as M.A. (S.A.) No.60/05 in S.A. No.19/04 without filing any application u/s 17 before DRT, Chennai. Another appeal was preferred by M/s. K.K.Steel Enterprises u/s 18 of SARFAESI Act before the DRAT, Chennai, in M.A. (S.A.) No.59/05 in S.A. No.19/04. Without notice to any of the respondents, the appeal preferred by the guarantor, M/s. Mahavir Plantation Private Ltd., was heard and order was reserved on 17th May, 2005. Similarly, without notice to any of the parties, the appeal preferred by M/s.K.K.Steel Enterprises was heard on 24th May, 2005, and order was reserved. In both the appeals, impugned orders were pronounced on 13th June, 2005, by DRAT, Chennai. 9. Similarly, without notice to any of the parties, the appeal preferred by M/s.K.K.Steel Enterprises was heard on 24th May, 2005, and order was reserved. In both the appeals, impugned orders were pronounced on 13th June, 2005, by DRAT, Chennai. 9. In both the appeals, M.A. (S.A.) No.60/05 and M.A. (S.A.) No.59/05, DRAT, Chennai, by impugned order dated 13th June, 2005, while holding that it is incumbent upon the secured creditor to issue a notice to the guarantor also, so that the guarantor will have an opportunity to answer the claim, accepting the case of the appellant/guarantor, that no notice was issued on it u/s 13 (2) of the Act, the DRAT, Chennai, set aside the order. The appeals were allowed with the following condition: - “In the result, both MA (SA)-60/2005 and MA (SA)-59/2005 are allowed on the following conditions: - 1) M/s. K.K. Steel Enterprises (Appellant in MA (sa)-59/2005) is hereby directed to deposit their offer amount of Rs.4,83,40,000/= (Rupees Four Crores Eighty Three Lakhs Forty Thousand only) with the 1st respondent Bank on or before 8. 2005 and the 1st respondent Bank shall deposit the same in a separate interest earning No-Lien Account. 2) After the receipt of the amount of Rs.4,83,40,000/= from M/s.K.K. Steel Enterprises, the 1st respondent Bank is directed to bring Lot-B of the property for sale in public auction, after giving due notice of the auction and by following the procedure as required under the SARFAESI Act, and the upset price of the property shall be fixed at Rs.4,83,40,000/= (Rupees Four Crores Eighty Three Lakhs and Forty Thousand only) and if there is no further offer over and above Rs.4,83,40,000/= (Rupees Four Crores Eighty Three Lakhs and Forty Thousand only), the sale shall be confirmed in favour of M/s.K.K. Steel Enterprises. 3) If M/s. K.K. Steel Enterprises fails to deposit the amount of Rs.4,83,40,000/= on or before 8. 2005, the 1st respondent Bank is directed to bring the property in public auction after due publication of the auction as required under the Act, by fixing the upset price at Rs.4,65,00,000/= (Rupees Four Crores and Sixty Five Lakhs only), (that was the offer made by M/s.Rahamath Steel) and if there is no bid over and above the said amount of Rs.4.65 Crores, the sale shall be confirmed in favour of M/s.Rahamath Steel. 4) If the property is sold only for Rs.4,65,00,000/= (Rupees Four Crores and Sixty Five Lakhs only), the difference amount between Rs.4,83,40,000/= and Rs.4,65,00,000/=, i.e., Rs.18,40,000/= shall be recovered from M/s.K.K. Steel Enterprises as if it is a debt due to the 1st respondent Bank under the RDDB & FI Act, 1993. 5) If the sale is confirmed in favour of M/s.K.K. Steel Enterprises or in favour of anyone else, the 1st respondent Bank shall return the sale amount already deposited by M/s.Rahamath Steel. 6) As this appeal falls under the SARFAESI Act, the appellant in MA (SA)-60/2005 has to comply with Section 18 of the said Act. As the appellant has made out a case that the entire proceedings taken by the 1st respondent Bank are vitiated and that this Tribunal had already directed the appellant in MA (SA)-59/2005 to deposit the amount offered for Lot-B of the property, I feel that it would suffice if the appellant in MA (SA)-60/2005 is directed to deposit 25% of the claim made by the 1st respondent Bank, i.e., Rs.7,32,19,141.28p on or before 8. 2005. 7) The 1st respondent Bank is hereby directed not to give possession of any items of Lot-B of the property to any one and if possession has already been given in respect of any items, as contended by the 1st respondent Bank, it shall retrieve the same and place it in the Lot-B of the property and bring the entire property for sale in public auction and possession shall be given to the successful bidder. 8) No order is necessary in IA-2/2005 and IA-3/2005 in MA (SA)-60/2005. 9) If the parties find any difficulty in executing this Order, they can approach this Appellate Tribunal for further orders.” 10. Learned counsel appearing on behalf of ICICI Bank made the following submissions :- .(a) Section 13 (2) notice is required to be issued only to the principal borrower, who fulfills the conditions laid down under the said section. The guarantor, who does not fulfill all the conditions, which are necessary for getting notice u/s 13 (2), is not entitled for such notice. .(b) By no stretch of imagination Section 13 (2) envisages a notice to the guarantor, who merely gives a personal or corporate guarantee. The guarantor, who does not fulfill all the conditions, which are necessary for getting notice u/s 13 (2), is not entitled for such notice. .(b) By no stretch of imagination Section 13 (2) envisages a notice to the guarantor, who merely gives a personal or corporate guarantee. The object of the SARFAESI Act is to realise the debt by proceeding to sell the secured assets in the manner provided u/s 13 of the Act. .(c) The direction given by the appellate tribunal in the last portion of the impugned order and the earlier finding that the interim notice is vitiated are self-contradictory. .(d) The appeal, as was filed by the guarantor, was not maintainable u/s 18, the guarantor having not moved the Debts Recovery Tribunal u/s 17 challenging the action of the secured creditor – bank, as was taken u/s 13 (4). .(e) The appeal filed by the guarantor was mala fide to defeat the secured creditors to recover the loan, particularly, when the guarantor has taken over the management by May, 1991. .(f) M/s. K.K.Steel Enterprises having not taken part in the auction proceeding, had no right to file application u/s 17 or appeal u/s 18. .(g) The order passed by the DRT, Chennai, directing the secured creditor – bank, to move before the DRT, Mumbai, in respect of Lot-A – immovable properties is de hors the law. The Tribunal ought to have confined itself within the provisions of the SARFAESI Act or could have asked the secured creditor – bank to go for fresh auction in respect of Lot-A – immovable properties. When the bank wanted to take legal action u/s 13 (4), there was no occasion for the bank to move before the DRT, Mumbai, for any permission. .(h) Reference made by DRT, Chennai, with regard to Rule 9 will come into play only if finally the authorised officer failed to obtain price higher than the reserve price. The said rule 9 pertains to a particular sale and does not prohibit the authorised officer to reauction the immovable properties and to fetch a price more than the reserve price. 11. The said rule 9 pertains to a particular sale and does not prohibit the authorised officer to reauction the immovable properties and to fetch a price more than the reserve price. 11. The only stand taken by the contesting respondent – M/s.Mahavir Plantation Private Ltd., is that the guarantor being a borrower within the meaning of Section 2 (f) of the Act, no action could be taken by the secured creditor – bank herein, u/s 13 (4) without giving notice to the guarantor u/s 13 (2) of the Act, 2002. 12. Chapter III of SARFAESI Act, 2002, provides enforcement of security interest by secured creditor. Under Section 13, any security interest created in favour of any secured creditor may be enforced without intervention of a court or tribunal, by such creditors in accordance with the provisions of the said Act. Where borrower is a defaulter in repayment of secured debt or any installment of repayment, and, further, the debt standing against him has been classified as a non-performing asset by the secured creditor, in such case, the secured creditor is entitled to exercise all or any of the rights under sub-section (4) to Section 13, after notice to the borrower under sub-section (2) of Section 13. As per sub-section (3) of Section 13, a notice, which has to be given to the borrower, must contain the details of amount payable and the secured assets against which the secured creditor proposes to proceed in the event of non-compliance with a notice given under sub-section (2) to Section 13. Sub-section (4) provides for four measures which can be taken by the secured creditor in case of non-compliance with the notice served upon the borrower. Sub-section (4) provides for four measures which can be taken by the secured creditor in case of non-compliance with the notice served upon the borrower. Under clause (a), a secured creditor may take possession of the secured assets of the borrower, including the right to transfer by way of lease, assignment or sale for realising the secured asset; under clause (b) a secured creditor may take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured assets subject to the condition as provided under proviso thereof; under clause (c), a secured creditor could appoint any person as manager, to manage the secured assets, the possession of which has been taken over by the secured creditor and under clause (d), a secured creditor may, require at any time, by notice in writing, any person, who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor so much of the money as is sufficient to pay the secured debt. Section 17 provides for filing an application (appeal) to the Debts Recovery Tribunal within 45 days against any action, if taken against the borrower, under sub-section (4) to Section 13. Under sub-section (2) to Section 17, if such application (appeal) is preferred by a borrower, it cannot be entertained by the DRT, unless the borrower has deposited with the DRT 75% of the amount claimed under the notice referred to under sub-section (2) of Section 13. 13. The constitutional validity of the aforesaid provision of SARFAESI Act, 2002, was upheld by the Supreme Court in Mardia Chemicals Ltd. - Vs – Union of India & Ors. reported in 2004 (2) CTC 759. 13. The constitutional validity of the aforesaid provision of SARFAESI Act, 2002, was upheld by the Supreme Court in Mardia Chemicals Ltd. - Vs – Union of India & Ors. reported in 2004 (2) CTC 759. In the said case, the Supreme Court, while held that the purpose of service of notice upon the borrower under sub-section (2) of Section 13 is that a reply may be submitted by the borrower explaining the reasons as to why measures may or may not be taken under sub-section (4) of Section 13, it further held that the creditor must apply its mind to the objections raised in reply to such notice and internal mechanism must be evolved to consider such objection raised in reply to such notice and to communicate the reason for not accepting the objection, if raised by the borrower in reply to notice u/s 13 (2) of the Act. The Supreme Court further held that the next safeguard available to a secured creditor within the framework of the Act is to approach the DRT u/s 17 after measures are taken under sub-section (4) of Section 13. Referring to Section 13 (2) of the Act, the Supreme Court held as follows: - “77. It is also true that till the stage of making of the demand and notice under Section 13 (2) of the Act, no hearing can be claimed for by the borrower. But looking to the stringent nature of measures to be taken without intervention of Court with a bar to approach the Court or any other forum at that stage, it becomes only reasonable that the secured creditor must bear in mind the say of the borrower before such a process of recovery is initiated. So as to demonstrate that the reply of the borrower to the notice under Section 13 (2) of the Act has been considered applying mind to it. The reasons, howsoever brief that may be, for not accepting the objections, if raised in the reply, must be communicated to the borrower. So as to demonstrate that the reply of the borrower to the notice under Section 13 (2) of the Act has been considered applying mind to it. The reasons, howsoever brief that may be, for not accepting the objections, if raised in the reply, must be communicated to the borrower. True, presumption is in favour of validity of an enactment and a legislation may not be declared unconstitutional rightly more so, in the matters relating to fiscal and economic policies resorted to in the public interest, but while resorting to such legislation it would be necessary to see that the persons aggrieved get a fair deal at the hands of those who have been vested with the powers to enforce drastic steps to make recovery.” 14. Sections 13 (2) and 13 (4) again fell for consideration before the Supreme Court in the case of Transcore – Vs – Union of India reported in 2006 (5) CTC 753. In the said case, the Supreme Court held as follows: - “22. On reading Section 13 (2), which is the heart of the controversy in the present case, one finds that if a borrower, who is under a liability to a secured creditor, makes any default in repayment of secured debt and his account in respect of such debt is classified as non-performing asset then the secured creditor may require the borrower by notice in writing to discharge his liabilities within sixty days from the date of the notice failing which the secured creditor shall be entitled to exercise all or any of the rights given in Section 13 (4). Reading Section 13 (2) it is clear that the said sub-section proceeds on the basis that the borrower is already under a liability and further that, his account in the books of the bank or FI is classified as sub-standard, doubtful or loss. The NPA Act comes into force only when both these conditions are satisfied. Section 13 (2) proceeds on the basis that the debt has become due. It proceeds on the basic that he account of the borrower in the books of bank/FI, which is an asset of the bank/FI, has become non-performing. Therefore, there is no scope of any dispute regarding the liability. There is a difference between accrual of liability, determination of liability and liquidation of liability. Section 13 (2) deals with liquidation of liability. It proceeds on the basic that he account of the borrower in the books of bank/FI, which is an asset of the bank/FI, has become non-performing. Therefore, there is no scope of any dispute regarding the liability. There is a difference between accrual of liability, determination of liability and liquidation of liability. Section 13 (2) deals with liquidation of liability. Section 13 deals with enforcement of security interest, therefore, the remedies of enforcement of security interest under the NPA Act and the DRT Act are complementary to each other. There is no inherent or implied inconsistency between these two remedies under the two different Acts. Therefore, the doctrine of election has no application in this case. Section 13 (3) inter alia states that the notice under Section 13 (2) shall give details of the amount payable by the borrower as also the details of the secured assets intended to be enforced by the bank/FI. In the event of non-payment of secured debts by the borrower, notice under Section 13 (2) is given as a notice of demand. It is very similar to notice of demand under Section 156 of the Income Tax Act, 1961. After classification of an account as NPA, a last opportunity is given to the borrower of sixty days to repay the debt. Section 13 (3-A) inserted by amending Act 30 of 2004 after the judgment of this Court in Mardia Chemicals (supra), whereby the borrower is permitted to make representation/objection to the secured creditor against classification of his account as NPA. He can also object to the amount due if so advised. Under Section 13 (3-A), if the bank/FI comes to the conclusion that such objection is not acceptable, it shall communication within one week the reasons for non-acceptance of the representation/objection. A Proviso is added to Section 13 (3-A) which states that the reasons so communicated shall not confer any right upon the borrower to file an Application to the DRT under Section 17. The scheme of sub-sections (2), (3) and (3-A) of Section 13 of NPA Act shows that he notice under Section 13 (2) is not merely a show cause notice, it is a notice of demand. That notice of demand is based on the footing that he debtor is under a liability and that his account in respect of such liability has become sub-standard, doubtful or loss. That notice of demand is based on the footing that he debtor is under a liability and that his account in respect of such liability has become sub-standard, doubtful or loss. The identification of debt and the classification of the account as NPA is done in accordance with the guidelines issued by RBI. Such notice of demand, therefore, constitutes an action taken under the provisions of NPA Act and such notice of demand cannot be compared to a show cause notice. In fact, because it is a notice of demand which constitutes an action, Section 13 (3-A) provides for an opportunity to the borrower to make representation to the secured creditor. Section 13 (2) is a condition precedent to the invocation of Section 13 (4) of NPA Act by the bank/FI. Once the two conditions under Section 13 (2) are fulfilled, the next step which the bank or FI is entitled to take is either to take possession of the secured assets of the borrower or to take over management of the business of the borrower or to appoint any manger to mange the secured assets or require any person, who has acquired any of the secured assets from the borrower, to pay the secured creditor towards liquidation of the secured debt.” 15. Section 2 (f) defines – “borrower” - means any person who has been granted financial assistance by any bank or financial institution or who has given any guarantee or created any mortgage or pledge as security for the financial assistance granted by any bank or financial institution and includes a person who becomes a borrower of a securitisation company or reconstruction company consequent upon acquisition by it of any rights or interest of any bank or financial institution in relation to such financial assistance. Section 2 (zb) defines – “security agreement” - means an agreement, instrument or any other document or arrangement under which security interest is created in favour of the secured creditor including the creation of mortgage by deposit of title deeds with the secured creditor. Section 2 (zf) defines – “security interest” - means right, title and interest of any kind whatsoever upon property, created in favour of any secured creditor and includes any mortgage, charge, hypothecation, assignment other than those specified in section 31. 16. Section 2 (zf) defines – “security interest” - means right, title and interest of any kind whatsoever upon property, created in favour of any secured creditor and includes any mortgage, charge, hypothecation, assignment other than those specified in section 31. 16. Section 13 (2) stipulates notice to the borrower, who fulfils the following conditions: a) who is under a liability to a secured creditor under a security agreement; b) makes any default in repayment of any secured debt or any instalment thereof; and c) his account in respect of such debt is classified by the secured creditor as non-performing asset. 17. Admittedly, the borrower takes liability to a secured creditor under a security agreement. It is only in the case of principal borrower whose account can be classified by the secured creditor as a non-performing asset and not the account of the guarantor. Thus, from a plain reading of sub-section (2) to Section 13, it will be evident that the principal borrower, in any case, is entitled to notice under the said provision. The question of notice under sub-section (2) of Section 13 arises only in case of default of payment of any secured debt or any installment thereof and that account in respect of such debt is classified by the secured creditor as non-performing asset. Such notice under sub-section (2) of Section 13 is given only if the secured creditor intends to exercise all or any of the rights under sub-section (4) to Section 13. If the borrower fails to discharge his liability in full within the period specified in the notice under sub-section .(2) to Section 13, only in such cases the secured creditor may take measures as mentioned under clause (a) to (d) of sub-section (4). That means, the secured creditor could take possession of the secured assets of the borrower, including right to transfer; take over the management of the business of the borrower including right to sell for realising the secured asset or to appoint persons to manage the secured asset, etc. That means, the secured creditor could take possession of the secured assets of the borrower, including right to transfer; take over the management of the business of the borrower including right to sell for realising the secured asset or to appoint persons to manage the secured asset, etc. Therefore, it will be evident that only such borrower, whose asset has been secured to the creditor i.e., a security interest such as right, title and interest of any kind whatsoever upon the property is created in favour of any secured creditor, including mortgage, charge, hypothecation, etc., other than those specified u/s 31, such borrower has a right to claim a notice under sub-section (2) to Section 13. If the asset has been secured by the principal borrower, then principal borrower is entitled to receive notice under sub-section (2) to Section 13, but if the asset has been secured by the guarantor, who also comes within the definition of borrower under sub-section (2) to Section 13, he is also entitled for a notice under sub-section (2) to Section 13. However, in case the guarantor has not at all secured its asset and if it has not made any agreement, instrument or other document, arrangement under which security interest is created, that means it has not created its right, title and interest of any kind, whatsoever, of any of its property, such guarantor, as a routine, cannot claim for notice under sub-section .(2) to Section 13, as the bank will not take any steps against any secured asset of such guarantor under sub-section (4) to Section 13. On the contrary, even if a secured asset is of a guarantor, the loan having been taken by the principal borrower, he is entitled to notice under sub-section (2) to Section 13. This question, as raised in the writ petition, is answered accordingly. 18. In the present case, the principal borrower is M/s. Madras Petrochem Ltd., whereas the guarantor is M/s.Mahavir Plantation Private Ltd. The guarantor executed a corporate guarantee in favour of ICICI Bank on 15th Sept., 1992, i.e., much after the principal borrower availed loan facilities. From the corporate guarantee as enclosed with the additional typed set, it appears that pursuant to a scheme of rehabilitation provided by BIFR, the management of the borrower had been taken over by the guarantor effective from July, 1991. From the corporate guarantee as enclosed with the additional typed set, it appears that pursuant to a scheme of rehabilitation provided by BIFR, the management of the borrower had been taken over by the guarantor effective from July, 1991. Apart from other clauses, the following clauses were inserted in the deed of guarantee executed on 15th Sept., 1992: - “5. The Lenders shall have full liberty, without notice to the Guarantors and without in any way affecting this guarantee, to exercise at any time and in any manner any power or powers reserved to the Lenders under the Loan Agreement, to enforce or forbear to enforce payment of the Loans or any part thereof or interest or other moneys due to the Lenders from the Borrower or any of the remedies or securities available to the Lenders, to enter into any composition or compound with or to grant time or any other indulgence or facility to the Borrower AND the Guarantors shall not be released by the exercise by the Lenders of their liberty in regard to the matters referred to above or by any act or omission on the part of the Lenders or by any other matter or thing whatsoever which under the law relating to sureties would but for this provision have the effect of so releasing the Guarantors AND the Guarantors hereby waive in favour of the Lenders so far as may be necessary to give effect to any of the provisions of this Guarantee, all the surety ship and other rights which the Guarantors might otherwise be entitled to enforce. 6) This Guarantee shall be enforceable against the Guarantors notwithstanding that any security or securities comprised in any instrument(s) executed or to be executed by the Borrower in favour of the Lenders shall, at the time when the proceedings are taken against the Guarantors on this Guarantee, be outstanding or unrealised or lost. 6) This Guarantee shall be enforceable against the Guarantors notwithstanding that any security or securities comprised in any instrument(s) executed or to be executed by the Borrower in favour of the Lenders shall, at the time when the proceedings are taken against the Guarantors on this Guarantee, be outstanding or unrealised or lost. 7) The Guarantors hereby agree and give consent to the sale, mortgage on prior, pari-passu or second charge basis, release etc., of any of the assets by the Borrower from time to time as may be approved by the Lenders or the transfer of any of the assets of the Borrower from one unit to the other or to the relense or lease out by the Lenders any or whole of the assets charged to the Lenders on such terms and conditions as the Lead Institution may deem fit and this may be treated as a standing and continuing consent for each and every individual act of transfer, mortgage, release or lease of any of such assets of the Borrower. The Guarantors hereby declare and agree that no separate consent for each such transfer, mortgage, release or lease any of such assets would be necessary in future.” From the aforesaid corporate guarantee, while it is evident that the guarantor has taken over the management of the principal borrower, from the letter dated 9th Dec., 2004, issued by M/s. Madras Petrochem Ltd., to the Advocate and Notary Public of the Bank, one Sailesh T.Bhansali has signed as Managing Director for both M/s.Madras Petrochem Ltd. (Principal Borrower) and for M/s. Mahavir Plantation Private Ltd. (Guarantor). The aforesaid letter dated 9th Dec., 2004, reads as follows: - “Ref.No.1270/MPCL/DRT/ICICI-Sect.Act. To Kind& Partridge Advocates & Notary Public 2nd Floor, Catholic Centre 108, Armenian St. Chennai 600 001. Kind Att. Mr.T.Nithyanandam Dear Sir, SUB : MADRAS PETROCHEM LTD. Appeal S.A. No.19/2004 before DRT-I, Chennai Vs. ICICI Bank Ltd., Mumbai We refer to your letter TN-233/TT/RJ 6319 dated 012. 2004 and our tele talk and wish to inform you the following for presenting our matter before the DRT. 1. We are interested and agreeable to buy the plant and machinery which ICICI Bank has seized under the Securitisation Act and the price offer the bank has received at the Public Auction recently and the matter is before the DRT and awaiting judgment. 2. 1. We are interested and agreeable to buy the plant and machinery which ICICI Bank has seized under the Securitisation Act and the price offer the bank has received at the Public Auction recently and the matter is before the DRT and awaiting judgment. 2. The above is acceptable as a full and final settlement with all the banks and Institutions who have lend money to Madras Petrochem Ltd., towards their dues and they the lenders relieve the company and its guarantors from all the undertakings and guarantees given to them. 3. We are already discussing and negotiating with banks and Institutions for an out of Court of settlement and our meeting with IDBI is again fixed on 12. 2004. 4. Due to all these developments and our offer to accept, kindly request DRT for time. 5. In case they want a reply as NO or YES then also please present our mater to them and leave it to the DRT for justice. Kindly note the above is written to you for presenting it to DRT and also to safeguard our interest. This is written with the consent of M/s.Mahavir Plantations P. Ltd., who are the Promoters of the company. Mr.Sailesh T.Bhansali is the Managing Director of both the companies. Thanking you, Yours faithfully, For Madras Petrochem Ltd. & For Mahavir Plantations P. Ltd. Sailesh T.Bhansali Sailesh T.Bhansali (Managing Director) (Managing Director)” From the facts as discussed and letter as quoted above, it will be evident that the guarantor, who was managing the affairs of the borrower, had in fact received the notice on behalf of the borrower as was issued by ICICI Bank u/s 13 (2) of the Act and, thereby, no separate notice u/s 13 (2) was required to be issued on the guarantor. 19. Under Section 18, a person, including borrower has a right to appeal, if aggrieved by any of the measures taken by the secured creditor under sub-section (4) to Section 13. As per the provision, as was prevailing when action was taken under sub-section (4) to Section 13, a guarantor, who comes within the definition of borrower could have preferred appeal only after depositing 75% of the amount. However, instead of filing such appeal, the guarantor, M/s.Mahavir Plantation Private Ltd., straightaway, moved before this Court in W.P. No.6462/04. As per the provision, as was prevailing when action was taken under sub-section (4) to Section 13, a guarantor, who comes within the definition of borrower could have preferred appeal only after depositing 75% of the amount. However, instead of filing such appeal, the guarantor, M/s.Mahavir Plantation Private Ltd., straightaway, moved before this Court in W.P. No.6462/04. Learned single Judge agreed to entertain such writ petition subject to payment of 50% of the demand raised. But the guarantor having expressed inability to pay, the writ petition was dismissed on 11th March, 2005, with the following observation: - “Petitioner prays for a certiorarified mandamus to call for the records on the file of the third respondent in S.A. No.19 of 2004 and quash the order dated 11. 2005 and direct the third respondent to pass fresh orders after revaluing the Lot “A” and “B” of the properties and also by affording an opportunity to the petitioner in S.A. No.19 of 2004. After hearing the learned counsel for the petitioner, I had asked the learned counsel as to whether the petitioner is prepared to pay 50% of the demand raised by the Bank, being the usual pattern of interim order of this Court. The learned counsel expressed inability to pay the amount. 3. Consequently, the writ petition is dismissed. No costs. Connected WPMP No.7060 of 2005 is also dismissed.” The said order was affirmed by Division Bench on 12th April, 2005, in W.A. No.734/05. Only thereafter appeal u/s 18 was preferred before DRAT, Chennai, which passed the impugned order under challenge. The aforesaid fact only shows that the guarantor had no intention to pay even 50% of the demand raised by the bank, which raises doubt whether the guarantor was interested to sort out the matter or simply wanted to linger the case. The amount as payable by the borrower has not been disputed. The only question raised is whether before taking action under sub-section (4) to Section 13, a notice under sub-section (2) to Section 13 was required to be issued on the guarantor. 20. While four of the writ petitions have been preferred by the secured creditor – ICICI Bank, other two writ petitions have been preferred by auction purchaser, M/s.Rahamath Steels. The only question raised is whether before taking action under sub-section (4) to Section 13, a notice under sub-section (2) to Section 13 was required to be issued on the guarantor. 20. While four of the writ petitions have been preferred by the secured creditor – ICICI Bank, other two writ petitions have been preferred by auction purchaser, M/s.Rahamath Steels. Auction purchaser is aggrieved as the application filed by M/s.K.K.Steel Enterprises in regard to Lot-B, movable properties, has been allowed and ICICI Bank has been directed not to give possession of any item of Lot-B properties to anyone and if possession has already been given, to retrieve the same. 21. Admittedly, M/s.K.K.Steel Enterprises neither took part in the original auction nor applied pursuant to the subsequent auction notice published in the newspaper on 16th Aug., 2004, and not taken part in the subsequent bid held on 16th Sept., 2004. In the impugned order dated 13th June, 2005, the DRAT, Chennai, has not shown the reason to entertain the petition filed by M/s.K.K.Steel Enterprises, who had neither applied pursuant to the first auction notice or the second auction notice nor took part in any of the bid. 22. In the case of Himadri Coke and Petro Limited - Vs – Soneko Developers Pvt. Ltd. & Ors. reported in (2006) 132 Comp. Cases 696 (SC), the Supreme Court set aside the sale for the reasons mentioned in the judgment and remitted the matter for re-advertisement. Having noticed that the appellant, Himadri Coke and Petro Limited had not submitted any offer pursuant to the earlier advertisement, held that if any persons offer other than the offer received in response to advertisement has to be considered, then an opportunity must be granted to other offerors pursuant to a fresh advertisement. The appellant was not permitted to enter into the arena by making a fresh offer, having not earlier responded to the advertisement. So far as M/s. K.K. Steel Enterprises is concerned, its case is similar. It having not applied pursuant to the first or the second advertisement and having not taken part in any of the bid, without giving opportunity to other similarly situated persons, it was not open to DRAT to allow the application of M/s. K.K. Steel Enterprises in regard to Lot-B properties, even if subsequently he offered a higher value. It having not applied pursuant to the first or the second advertisement and having not taken part in any of the bid, without giving opportunity to other similarly situated persons, it was not open to DRAT to allow the application of M/s. K.K. Steel Enterprises in regard to Lot-B properties, even if subsequently he offered a higher value. So far as Lot-A, immovable property is concerned, reserve price being Rs.25 Crores, no offer less than Rs.25 Crores could have been accepted. In that view of the matter, if DRT, Chennai, had disallowed the sale in favour of one or other with regard to Lot-A property, for a sum less than Rs.25 Crores, such order is not required to be interfered. Further, as the secured creditor is entitled to enforce its security interest under Chapter III of SARFAESI Act, 2002, there being no provision to take prior permission for taking such action, DRAT, Chennai, ought not have asked the secured creditor – ICICI Bank to obtain any order from DRT, Mumbai. Such part of the order passed by DRAT, Chennai, for taking prior permission from DRT, Mumbai, cannot be upheld. 23. In the facts and circumstances and the error in the order as referred to above, we have no other option but to set aside the orders, both dated 13th June, 2005, passed in M.A. (SA) No.59/05 and M.A. (SA) No.60/05, both in S.A. No.19/04; order dated 29th July, 2005, passed in I.A. No.98/05 in M.A. (SA) No.59/05, the consequential orders and notices issued pursuant to such orders and they are accordingly set aside. The order dated 9th Aug., 2005, passed in R.A. (SA) No.25/05 is modified to the extent above. If M/s.Rahamath Steel is the highest bidder in respect of Lot-B, movable properties, and has improved upon its bid for Rs.4.65 Crores, and accepted by ICICI Bank, and if the entire amount of Rs.4.65 Crores has already been deposited with ICICI Bank, and possession of such movable properties with structures, plant and machinery and furniture have already been handed over to it on 7th March, 2005, as brought to the notice of the Court, the Tribunal will confirm such sale. So far as Lot-A, immovable property is concerned, let there be a fresh bid after publication and advertisement in different newspapers, but for not less than Rs.25 Crores, being the reserve price as fixed for such Lot-A property. So far as Lot-A, immovable property is concerned, let there be a fresh bid after publication and advertisement in different newspapers, but for not less than Rs.25 Crores, being the reserve price as fixed for such Lot-A property. No prior permission of DRT, Mumbai, is required to be obtained. 24. The writ petitions preferred by ICICI Bank and M/s.Rahamath Steel are allowed to the extent above and the Civil Revision Petition preferred by the guarantor, M/s.Mahavir Plantation Private Ltd., so far as Lot-A – immovable property is concerned, stands disposed of with the aforesaid observations and directions. Consequently, connected miscellaneous petitions are closed. In the facts and circumstances, the parties shall bear their respective costs.