JUDGMENT :- (G. Raghuram, J.) The Debts Recovery Appellate Tribunal (Chennai Bench) [‘the DRAT’] by the order impugned dated 16.07.2008 allowed the appeal RA (SARFAESI)-49/2007, preferred by the 3rd respondent-Bank (a secured creditor) and set aside the order dated 31.07.2007 of the Debts Recovery Tribunal, Visakhapatnam (‘the DRT’). The chronology of facts: The petitioner is a private limited company incorporated under the provisions of the Companies Act 1956, engaged in the business of trading in rice. It has a factory at Gollapalli (v), Zedcherla (M), Mahabubnagar District. The petitioner availed credit facility from the secured creditor, initially in an amount of Rs. 2 crores which was thereafter enhanced to Rs.2.5 crores, for its business. The petitioner defaulted in payment of the outstanding dues/instalments. The secured creditor by a letter dated 20.12.2004 intimated the petitioner, inter alia that its total liability on the credit account is Rs.2,51,44,583/-; that as considerable time was already afforded the petitioner should pay Rs. 50 lakhs to enable regularization of the account, failing which the bank would initiate action for recovery of the dues. At the instance of the petitioner the secured creditor consented to release a part of the collateral security on payment of Rs.50 lakhs on or before 31.01.2005. As the petitioner failed in depositing the amount, the 3rd respondent through its letter dated 08.07.2005 renewed the offer for releasing part of the collateral security if the petitioner undertook to pay Rs.50 lakhs on or before 10.08.2005. Without complying with the conditions of the above offer, the petitioner made repeated representations seeking further time and filed W.P.No. 682/06 seeking release of the documents relating to the agricultural lands offered as collateral security. No such relief was granted in the writ petition as the petitioner failed to comply with the conditions of the interim orders therein. Without complying with the conditions of the above offer, the petitioner made repeated representations seeking further time and filed W.P.No. 682/06 seeking release of the documents relating to the agricultural lands offered as collateral security. No such relief was granted in the writ petition as the petitioner failed to comply with the conditions of the interim orders therein. On 22.03.2005 the secured creditor issued a notice u/Sec. 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘the Securitisation Act’) intimating default in repayment of loan instalments; that the loan account of the petitioner is classified as a Non-Performance Asset (NPA) [w.e.f. 11.02.2005]; that the joint and several liability of addressees 1 to 3 and 5 to 7 is Rs.2,59,94,500.28, as on 28.02.2005; and calling upon the petitioner to pay the said amount together with interest, within the specified period (60 days) failing which further action would be taken under the provisions of the Act. Earlier, in February 2005 the secured creditor called upon the petitioner to repay the entire dues by 13.03.2005. The petitioner filed W.P.No. 4804/05 contending that since its representation dated 13.01.2005 (requesting the 3rd respondent to release the seized stocks of paddy and to grant permission for release of the title deeds] was pending, the bank was not justified in initiating coercive steps for recovery of the dues. By the order dated 14.03.2005 W.P.No. 4804/05 was disposed of directing the secured creditor to dispose of the petitioner’s representation dated 13.01.2005 within three weeks and further that no coercive steps as indicated in its letter dated 23.02.205 should be initiated, till then. The secured creditor by a communication dated 19.04.2005 informed the petitioner (in response to its representation dated 13.01.2005) that as the petitioner’s account is classified as NPA no operations therein are permissible including release of the collateral security, as the said offer (for release of part of the collateral security) had already been withdrawn. The petitioner nevertheless filed W.P.No. 9203/05 challenging the Section 13(2) notice dated 23.03.2005, contending inter alia that the bank had not responded to its earlier representation dated 13.01.2005. The petitioner nevertheless filed W.P.No. 9203/05 challenging the Section 13(2) notice dated 23.03.2005, contending inter alia that the bank had not responded to its earlier representation dated 13.01.2005. By the judgment dated 29.04.2005 this writ petition was disposed of as the secured creditor had already responded by its letter dated 19.04.2005, to the petitioner’s representation dated 13.01.2005 and since the impugned letter dated 23.3.2005 was issued under the provisions of Sec. 13(2) of the Securitisation Act and in respect of which the petitioner could lodge objections to the Sec. 13(2) notice. In response to the notice dated 22.03.2005, the petitioner submitted objections dated 09.05.2005 and 18.05.2005, asserting inter alia that in view of the provisions of Sec. 31 (i) of the Securitisation Act, the provisions of the Act are inapplicable where the amount due is less than 20% of the principal amount and the interest thereon; that the amount due from the petitioner as on the date of the issuance of the letter (dt 22.03.05) was only Rs.47,83,265/- which is less than 20% of the total outstanding liability of Rs.2,59,94,500. The petitioner also pleaded several constraints on account of which it could not clear loan instalments. The secured creditor by its letters dated 18.05.2005 and 28.06.2005 addressed the petitioner (in response to its objections dated 09.05.2005 and 18.05.2005), reiterating that the petitioner’s loan account was classified as NPA; that as per extant banking norms and the terms of the agreement between the parties since instalments/interest amounts were not paid by the petitioner, the account was classified as NPA and the entire amount mentioned in the demand notice dated 22.03.2005 became due and payable. The petitioner’s request for waiver of interest and release of collateral security was again rejected. In substance, the secured creditor categorically rejected all the objections of the petitioner. Thereafter, the secured creditor on 30.12.2006 issued a possession notice u/Sec. 13(4) and after initiating proceedings u/Sec.14 took possession of the unit on 30.12.2006 pursuant to orders passed by the District Magistrate, Mahabubnagar. The secured creditor thereafter issued a sale notice dated 19.01.2007 [under the provisions of Rule 6(2)/8(6) of the Security Interest (Enforcement) Rules, 2002 (‘the 2002 Rules’)]. Thereafter, the secured creditor on 30.12.2006 issued a possession notice u/Sec. 13(4) and after initiating proceedings u/Sec.14 took possession of the unit on 30.12.2006 pursuant to orders passed by the District Magistrate, Mahabubnagar. The secured creditor thereafter issued a sale notice dated 19.01.2007 [under the provisions of Rule 6(2)/8(6) of the Security Interest (Enforcement) Rules, 2002 (‘the 2002 Rules’)]. The challenge, the defense and the litigative context: The challenge to the impugned order of the DRAT is principally on the ground that the provisions of the Securitisation Act are not available in view of the provisions of Sec. 31 (j). The petitioner contends that in view of certain payments made by it after issuance of the Sec.13(2) notice dated 23.03.2005, the liability of the petitioner has fallen below the limits specified in Sec. 31(j). The secured creditor’s counter dated 4.11.2008 sets out details of the payments made by the petitioner after the notice dated 23.3.2005. There is no denial of these facts by the petitioner through any subsequent pleadings. The petitioner paid Rs.1,11,00,000 between 28.1.2006 to 27.9.2006. After this payment the amount due from the petitioner was Rs.2,14,26,796 (comprising Rs.1,32,02,358 towards the term loan and Rs.82,24,438 towards OCC account). By the date of the possession notice dated 30.12.2006, the petitioner failed to make any further payment and the outstanding amount due as on 31.12.2006 was Rs. 2,21,90,102.88 (comprising Rs.1,36,66,620 and Rs.85,23,482.88 towards the term loan and OCC accounts, respectively. The secured creditor issued a sale notice on 19.01.2007 and a press publication of the auction notice was issued on 19.01.2007 and 20.01.2007, scheduling the date of auction to 28.02.2007. After publication of the sale notice, on 2.2.2007 the petitioner paid Rs.1 crore while requesting release of the documents pertaining to lands in Sy.Nos. 298, 301/E, 301/EE, NH-7, Gollapalli (v), so as to enable it to sell these properties to clear the balance dues. The auction scheduled on 28.02.2007 was therefore withheld by the secured creditor. The petitioner however failed to make any further payment, except Rs.5,00,000 paid before the appeal before the DRAT in RA (SARFAESI)-49/2007 was filed by the secured creditor. According to the secured creditor (an assertion not disputed by the petitioner), of the Rs.1 crore paid on 2.2.2007, Rs.86,91,401.88 was adjusted towards the OCC account and this account was closed. The petitioner however failed to make any further payment, except Rs.5,00,000 paid before the appeal before the DRAT in RA (SARFAESI)-49/2007 was filed by the secured creditor. According to the secured creditor (an assertion not disputed by the petitioner), of the Rs.1 crore paid on 2.2.2007, Rs.86,91,401.88 was adjusted towards the OCC account and this account was closed. The remaining Rs.13,08,598.12 was credited to the term loan account; and the balance amount due as on 2.2.2007 (on the term loan account) was Rs.1,25,18,284.88. As on 31.10.2008 the petitioner’s liability is pleaded to be Rs.1,56,40,277.88 (the petitioner dos not refute this assetion). The petitioner filed SA No. 97/07 before the DRT. The principal contentions before the DRT were: A) That if the payments made after the Sec.13(2) notice dated 23.3.2005 are taken into account, the liability of the petitioner would fall below 20% of the principal amount and the interest due thereon and therefore proceedings under the Securitisation Act cannot be pursued in view of the provisions of Sec.31(j) of the said Act; B) That all the land components of the secured assets constitute agricultural lands, except an extent of ac.1.00 on which the factory buildings are situate and therefore the properties are outside the purview of the Securitisation Act; and C) That sale notice and auction notice were not separately issued but were issued on the same date, therefore this process is in violation of the provisions of the 2002 Rules. By the order dated 31.07.2007 the DRT allowed SA 79/07 preferred by the petitioner. This judgment regrettably, is incoherently structured and is bereft of clear analysis. The learned DRT held (Para-19) that the sale notice is mandatory and only 30 days thereafter can the auction be held; the sale and auction notices being distinct, cannot simultaneously be issued but were so issued and this procedural error is fatal to the proceedings. The DRT also held that the factory was seized on 30.12.2006 pursuant to the possession notice issued u/Sec. 13(4) and the petitioner was thus disabled to pay the dues without running the mill; that the locking and sealing of the godown area of the factory was however earlier in February 2005 and therefore the proceedings are vitiated. The DRT also held that the factory was seized on 30.12.2006 pursuant to the possession notice issued u/Sec. 13(4) and the petitioner was thus disabled to pay the dues without running the mill; that the locking and sealing of the godown area of the factory was however earlier in February 2005 and therefore the proceedings are vitiated. The DRT however held that the extent of Ac.5.00 on which the factory is situate was stated by the petitioner (in its loan application) to be factory land and therefore the petitioner/borrower cannot gainfully contend that it is agricultural land. In conclusion, the DRT held that the proceedings initiated and pursued under the Securitisation Act are not in accordance with the provisions of the Act, since the sale notice and auction notice were not separately issued; the amounts paid (subsequent to the possession notice dt 23.3.2005) were not taken into consideration and the amount due set out in the Sec.13 (2) notice and the sale notice is the same i.e., without factoring in the subsequent payments made. Though the DRT ruled that the land concerned is not agricultural land, it held in conclusion that the proceedings under the Securitisation Act were initiated contrary to spirit and letter of the legislation but only bent upon for recovery of the amount some how or other and the powers conferred by the legislature has to be taken in positive sense by giving proper opportunity to the borrower to repay the amount. The DRT also held that the term loan was rescheduled and payable up to 2009 and therefore the proceedings initiated must be considered as “in a hurry to recover the term loan”. In parting, the DRT observed that the efforts of the secured creditor should be that the unit should work because the loan is granted for the purpose of industry; and not to close down the industry. In this view the action of the secured creditor was premature and accordingly the petitioner’s appeal was allowed. Aggrieved thereby the secured creditor preferred an appeal to the DRAT. In this view the action of the secured creditor was premature and accordingly the petitioner’s appeal was allowed. Aggrieved thereby the secured creditor preferred an appeal to the DRAT. The DRAT allowed the appeal by the order impugned holding: A) That after deducting the amount of Rs.2,11,00,206 paid by the petitioner (subsequent to the notice u/Sec. 13(2) dt 23.3.2005) the balance amount due as on 31.5.2007 (at the time of filing the RA before the DRAT), is Rs.1,32,09,309.88, which is not less than 20% of the principal and the interest thereon as claimed in the notice u/Sec. 13(2); B) That though the security interest created in agricultural land is exempt from the provisions of the Securitisation Act qua Sec.31(i), the property brought to sale is property on which the rice mill, super structures, plant and machinery, movables, equipment and other accessories are situate and therefore do not constitute agricultural land; C) That according to Rule 8(1) of the 2002 Rules r/w Appendix-IV thereof the possession notice for immovable property should specify the same amount as mentioned in the notice issued u/Sec. 13(2) and there was no separate column prescribed for enumerating any amounts paid by the borrower after issuance of the notice u/Sec.13(2). In the circumstances the DRT held that stating the same amount in the possession notice as mentioned in the notice u/Sec. 13(2), is not violative of the provisions of the 2002 Rules; and D) That since 30 days notice was issued to the borrower (the petitioner) on 19.01.2007 in respect of sale notified to be held on 28.02.2007 and the publication of the sale notification was made both in the vernacular and English dailies, the appropriate procedure under the 2002 Rules was followed. Accordingly and on the above findings the DRAT allowed the appeal with costs. Thus is the petitioner before this court. Heard Sri S.Ravi learned Senior Counsel instructed by Sri B.Chandrasen Reddy learned counsel, for the petitioner and Sri S.R. Ashok learned Senior Counsel instructed by Sri V.Raghu learned counsel, for the respondents 3 and 4. Initially three respondents were arrayed in the writ petition. The 4th respondent was impleaded at its instance by the order dated 24.06.2009 in WPMP No. 15604/09. The 4th respondent is a Securitisation and Assets Reconstruction Company registered as such pursuant to the provisions of Sec.3 of the Securitisation Act. Initially three respondents were arrayed in the writ petition. The 4th respondent was impleaded at its instance by the order dated 24.06.2009 in WPMP No. 15604/09. The 4th respondent is a Securitisation and Assets Reconstruction Company registered as such pursuant to the provisions of Sec.3 of the Securitisation Act. The 3rd respondent as the secured creditor entered into a deed of assignment dated 31.03.2009 with the 4th respondent whereunder it assigned the debts due to it from the petitioner in favour of the 4th respondent, upon the terms and conditions set forth in the deed of assignment aforesaid. Thereafter and pursuant thereto the 4th respondent became the legal and beneficient owner of the entirety of the debts of the petitioner owed to the secured creditor and therefore to all the rights, title and interests in these debts of the petitioner. In the circumstances the 4th respondent got itself impleaded as such in the proceedings aforesaid. The learned Senior Counsel Sri Ravi urged that continuation of proceedings under the Securitisation Act despite payments made by the petitioner subsequent to the Sec.13(2) notice (the petitioner paid Rs.2.16 crores on various dates between 28.1.06 and before the secured creditor preferred an appeal to the DRAT against the order of the DRT dated 31.07.2007), is illegal and unauthorized in view of the provisions of Sec. 31(j) of the Securitisation Act. Per contra, Sri Ashok, the learned Senior Counsel (for respondents 3 and 4) contends that at no point of time, even after initiation of proceedings under the Securitisation Act, by the issuance of the notice dated 23.03.2005 has the amount due from the petitioner to the secured creditor fallen below 20 per cent of the principal amount and interest thereon and therefore the provisions of Sec. 31(j) do not apply to exclude the provisions of the Securitization Act or to render illegal in any way continuance of proceedings thereunder. The Relevant Statutory Provisions: In the context of the singular challenge to the continuation of the proceedings, the relevant provisions of the Securitisation Act and of the Recovery of Debts Due to Banks & Financial Institutions Act, 1993 (‘the 1993 Act’) need to be considered. a) Sec.31 of the Securitisation Act is among the raft of miscellaneous provisions set out in Chapter-VI. This provision enumerates the classes of cases to which the provisions of the Act are not to apply. a) Sec.31 of the Securitisation Act is among the raft of miscellaneous provisions set out in Chapter-VI. This provision enumerates the classes of cases to which the provisions of the Act are not to apply. Clauses (a) to (j) of Sec. 31 enumerate the circumstances in which the provisions of the Act are not to apply. Clause (j) (which is relevant to this lis) reads: any case in which the amount due is less than twenty per cent of the principal amount and interest thereon. b) Sec. 2(f) of the Securitisation Act defines “borrower” as meaning: 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 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. c) Sec. 2(ha) of the Securitisation Act defines “debt” as having: the meaning assigned to it in clause (g) of Section 2 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993). d) Sec. 2(g) of the 1993 Act defines “debt” as meaning any liability (inclusive of interest) which is claimed as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions during the course of any business activity undertaken by the bank or the financial institution or the consortium under any law for the time being in force, in cash, or otherwise, whether secured or unsecured, or assigned, or whether payable under a decree or order of any Civil Court or any arbitration award or otherwise or under a mortgage and subsisting on, and legally recoverable on, the date of application. e) Sec. 2(j) of the Securitisation Act defines ‘default’ as meaning: non-payment of any principal debt or interest thereon or any other amount payable by a borrower to any secured creditor consequent upon which the account of such borrower is classified as non-performing asset in the books of account of the secured creditor. e) Sec. 2(j) of the Securitisation Act defines ‘default’ as meaning: non-payment of any principal debt or interest thereon or any other amount payable by a borrower to any secured creditor consequent upon which the account of such borrower is classified as non-performing asset in the books of account of the secured creditor. f) Sec. 2(o) of the Securitisation Act defines ‘non-performing asset’ as: an asset or account of a borrower, which has been classified by a bank or financial institution as sub-standard, doubtful or loss asset, -- (a) in case such bank or financial institution is administered or regulated by any authority or body established, constituted or appointed by any law for the time being in force, in accordance with the directions or guidelines relating to assets classifications issued by such authority or body; (b) in any other case, in accordance with the directions or guidelines relating to assets classifications issued by the Reserve Bank; g) Sec. 2(s) of the Securitisation Act defines ‘prescribed’: means prescribed by rules made under this Act. h) Chapter-III of the Securitisation Act sets out provisions relating to Enforcement of Security Interest. Sec.13 (to the extent relevant and material), reads: 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 secured creditor may be enforced, without the intervention of the court or tribunal, by such creditor in accordance with the provisions of this Act. (2) Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under sub-section (4). … … … (4) In case the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely— (a) take possession of the secured assets of the borrowers including the right to transfer by way of lease, assignment or sale for realizing the secured asset; (b) take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale for realizing the secured asset. i) Sec. 35 enacts an over-riding effect to the provisions of the Securitisation Act over anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of such law. Sec. 37 enjoins that the provisions of this Act or the Rules made thereunder shall be in addition to, and not in derogation of the Companies Act, 1956; the Securities Transactions (Regulation) Act, 1956; the Securities and Exchange Board of India Act, 1992; the Recovery of Debts due to Banks and Financial Institutions Act, 1993 or any other law for the time being in force. Analyses: To comprehend the scope and applicability of the provisions of Sec. 31(j) in the context of the facts, circumstances and contentions in this case, an interactive analysis of the relevant provisions of the Securitization Act is necessary. Before we proceed towards this analysis we notice the factual assumption by the petitioner which is the basis for its contention that continuance of the proceedings is prohibited qua Sec. 31(j) of the Securitisation Act. In its representation dated 9.5.2005 (in response to the secured creditor’s Sec.13(2) notice dt 23.3.05), reiterated in another representation dated 18.5.2005, the petitioner stated that the total amount due is only Rs.47,83,265 as against the total amount of Rs.2,59,94,500, which is less than 20 per cent of the total loan amount with interest due. In its representation dated 9.5.2005 (in response to the secured creditor’s Sec.13(2) notice dt 23.3.05), reiterated in another representation dated 18.5.2005, the petitioner stated that the total amount due is only Rs.47,83,265 as against the total amount of Rs.2,59,94,500, which is less than 20 per cent of the total loan amount with interest due. How the petitioner arrived at its liability being only Rs.47,83,265 and not Rs.2,59,94,500 (as stated in the Sec.13(2) notice), is not clarified in the petitioner’s representations submitted in response to the secured creditor’s notice dt 18.05.2005 informing the petitioner (Para 3) that as per the bank norms and the terms of the agreement, since the instalments and interest were not paid the account was classified as NPA and the entire amount (specified) in the demand notice [u/Sec.13(2)] i.e., Rs.2,59,94,500 became due and is payable. We infer that the petitioner presumes its liability to repayment continues to be in terms of the initial agreement between the parties i.e., payment of equated monthly or quarterly instalments and on that basis had calculated its balance liability at Rs.47,83,265. However, as the petitioner admittedly committed default in the servicing of the loan, the secured creditor, in accordance with the extant RBI guidelines, had determined the account as NPA (there is no dispute by the petitioner as to the validity of the determination of the account as NPA). Once the loan account is validly classified as NPA, Sec. 13(2) of the Securitisation Act comes into operation. This provision as already noticed, enjoins that when a relevant debt (falling within the provisions of the Securitisation Act) is classified by the secured creditor as NPA, the borrower may be required by notice in writing to discharge in full this liability to the secured creditor, within 60 days. This was clarified by the secured creditor in the communication dated 18.05.2005 and was reiterated in another communication dated 28.06.2005. The claim of the petitioner that its liability as on the date of the notice dated 23.03.2005 is only Rs. 47,83,265 as against the demanded liability of Rs.2,59,94,500, is therefore without basis. As the essential factual assumption is misconceived, so is the consequent legal projection and the endeavour of the petitioner to seek refuge in the provisions of Sec.31(j). The claim of the petitioner that its liability as on the date of the notice dated 23.03.2005 is only Rs. 47,83,265 as against the demanded liability of Rs.2,59,94,500, is therefore without basis. As the essential factual assumption is misconceived, so is the consequent legal projection and the endeavour of the petitioner to seek refuge in the provisions of Sec.31(j). Another facet of the petitioner’s claim to the benefits of Sec.31(j) is based on the payments by the petitioner subsequent to the issuance of the notice u/Sec. 13(2). As already noticed, the petitioner in all paid Rs.2,11,00,00 during the period 28.01.2006 to 02.02.2007 (Rs.1,11,00,000 was paid during 28.1.06 to 27.9.06 and Rs.1,00,0,000 on 2.2.07). The petitioner pleads to have paid Rs.5,00,000 prior to the secured creditor preferring an appeal to the DRAT. The petitioner’s claim as to the applicability of the provisions of Sec. 31(j) is premised on the assumption that its total liability is frozen at Rs.2,59,94,500 and this frozen liability progressively diminished with payments made post-Sec. 13(2) notice. The fallacy underlying this premise is clear. The continuing interest liability of the petitioner does not get extinguished nor the quantum of its liability get crystallized or became immutable after the notice issued u/Sec.13(2). As set out in the counter affidavit of the 3rd respondent dated 04.11.2008, by the date of the possession notice issued by the secured creditor (dt 31.12.06) the balance liability of the petitioner was Rs.2,21,90,102.88 (after crediting Rs.1,11,00,000 paid by the petitioner between 28.01.06 to 27.09.06). After giving credit for Rs.1,00,0,000 subsequently paid on 02.02.2007 and Rs.5,00,00 paid later (and before the appeal preferred by the secured creditor to the DRAT), the liability of the petitioner as on 02.02.2007 stood at Rs.1,25,18,284.88 and as on 31.08.2008 at Rs.1,56,40,277.88. There is no denial by the petitioner of this averment pleaded in the 3rd respondent’s counter dated 04.11.2008. On facts therefore, the amount due from the petitioner never fell below the limit of 20 per cent of the principal amount and interest thereon to attract the provisions of Sec. 31 (j). The unstated assumption by the petitioner that its interest liability ceases after issuance of a notice u/Sec. 13(2) heralding the initiation of proceedings under the Securitisation Act, is a presumption that has no basis in law or practice and none such is either pleaded nor established. The unstated assumption by the petitioner that its interest liability ceases after issuance of a notice u/Sec. 13(2) heralding the initiation of proceedings under the Securitisation Act, is a presumption that has no basis in law or practice and none such is either pleaded nor established. The Securitisation Act contains rigorous provisions for recovery of a secured debt by a secured creditor. From the scheme of the provisions of the Act, “secured creditor” means a bank or a financial institution; “secured asset” means the property on which security interest is created; “security interest” means the right, title and interest of any kind whatsoever upon property created in favour of any secured creditor including any mortgage, charge, hypothecation or assignment, other than those specified in Sec.31; “default” means non-payment of any principal debt or interest thereon or any other amount payable by a borrower to any secured creditor consequent upon which the account of such borrower is classified as NPA in the books of account of the secured creditor; and “non-performing asset” means an asset or account of a borrower classified by secured creditor as sub-standard, doubtful or loss asset, inter alia in accordance with the terms or guidelines relating to assets classification issued by any administrative or regulating authority or the Reserve Bank in respect of a bank or a financial institution. U/Sec.13, fortified by the non obstante provision in sub-sec.(1), a security interest created in favour of any secured creditor may be enforced without the intervention of a court or tribunal in accordance with the provisions of the Act. The provisions of sub-sec. (2) enact that where there is a default in the repayment of a secured debt or any installment thereof and the account in respect of such debt is classified by the secured creditor as NPA, the secured creditor may proceed towards enforcement of the secured interest in accordance with the provisions of Chapter-III and other provisions of the Securitisation Act. (2) enact that where there is a default in the repayment of a secured debt or any installment thereof and the account in respect of such debt is classified by the secured creditor as NPA, the secured creditor may proceed towards enforcement of the secured interest in accordance with the provisions of Chapter-III and other provisions of the Securitisation Act. On analyses of the aforementioned provisions of the Securitisation Act it is apparent that the following are the conditions precedent for initiation of the proceedings, i.e., threshold conditions: (a) There should have been a security interest created, in respect of a secured asset; under a security agreement; in favour of a secured creditor; and thus in respect of a secured debt; (b) There should have occurred a default in the repayment of the secured debt or any instalment thereof; (c) Such debt should have been classified by the secured creditor as a NPA in accordance with any extant terms or guidelines relating to assets classifications issued by any authority or body established, constituted or appointed by any law for the time being in force; (d) The security interest must be in respect of classes of cases other than those excluded by the provisions of Sec.31. Sec.31(a) to (g) specify classes of cases in respect of right, title and interest upon property created inter alia by a mortgage, charge, hypothecation or assignment, to which the provisions of the Act would not apply; (e) Sec. 31(h) enjoins disapplication of the provisions of the Act to any security interest for securing repayment of any financial asset not exceeding Rs.1,00,000. (f) Sec.31(i) excludes the operation of the provisions of the Act to a security interest created in agricultural land, perhaps in recognition of the limitations on the Parliament’s legislative domain qua Entry-18, List-II of the Seventh Schedule of the Constitution or presumably on a conscious legislative choice, to exclude agricultural debt or debt involving furnishing of security of agricultural assets from the rigor of the provisions of the Securitisation Act; and (g) Sec.31 (j) excludes operation of the provisions of the Act to cases where the amount due is less than 20 per cent of the principal amount and interest thereon. In the context of the provisions of Sec. 31(j) taken together with other provisions of the Act already referred to, it is legitimate to infer that even in cases where a default has occurred in repayment of a secured debt or any installment thereof and the account in respect of such debt could be classified by the secured creditor as NPA, in accordance with any operational terms or guidelines relating to assets classifications, proceedings under the Act are excluded and prohibited, where the amount due is less than 20 per cent of the principal amount and interest thereon. It follows therefore that even where a loan account is legitimately treated as NPA on account of the sub-standard quality of the security or a persistent though marginal and technical default in repayment of equated installments or other such reasons or circumstances, yet proceedings under the Act are excluded, where the subsisting liability of the borrower to the secured creditor is less than 20 per cent of the principal amount and the interest thereon. Section 31(j) of the Securitization Act in our considered view is intended to exclude recourse to the provisions of the Act where there is substantial repayment (quantified by legislative policy as 20 per cent of the principal amount and interest thereon). The provisions of Section 31 in our considered view, enjoin dis-application of the provisions of the Act to the enumerated classes of cases set out in clauses (a) to (j) of Section 31. Though Section 31 occurs in Chapter-VI (Miscellaneous) and on a unitary construction of its phraseology signals operation not only at the threshold stage (at the stage of initiation of proceedings under the Act), but thereafter as well (i.e., dynamic application), it requires to be noticed that Section 2 (zf) defines security interest as meaning the 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. Chapter-III of the Act sets out a raft of provisions for enforcement of security interest, commencing from Section 13. Section 13 (1) (to the extent relevant for this analysis), enacts that any security interest created in favour of any secured creditor may be enforced, without the intervention of the court or tribunal, by such creditor in accordance with the provisions of this Act. Section 13 (1) (to the extent relevant for this analysis), enacts that any security interest created in favour of any secured creditor may be enforced, without the intervention of the court or tribunal, by such creditor in accordance with the provisions of this Act. Sub-section (2) of Section 13 enables the secured creditor to enforce the security interest where any borrower who is under a liability to a secured creditor under a security agreement defaults in repayment of a secured debt or any installment thereof and his account in respect of such debt if classified by the secured creditor as non-performing asset, to require the borrower by a notice in writing to discharge in full his liability to the secured creditor within sixty (60) days from the date of notice; and where the borrower fails to discharge in full such liability, the secured creditor is entitled to exercise all or any of the rights under sub-section (4). Sub-section (4) of Section 13 enacts that where the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may inter alia take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realizing the secured asset. Since the classes of cases/circumstances enumerated in Section 31 are excluded from the definition of security interest, defined in Section 2 (zf), it follows that the matrix of enforcement provisions is inapplicable to the excluded classes of cases specified in Section 31. On a true and fair construction of the provisions of Section 13, the inference is compelling that where enforcement provisions of Section 13 are validly initiated, the secured creditor is entitled to pursue the enforcement provisions to the logical conclusion by taking recourse to one or more of the measures enumerated in subsection (4) of Section 13 to recover the secured debt, in full. Sub-section (8) of Section 13 provides that if the dues of the secured creditor together with all costs, charges and expenses incurred by him are tendered to the secured creditor at any time before the date fixed for sale or transfer, the secured asset shall not be sold or transferred by the secured creditor, and no further steps shall be taken by him for transfer or sale of that secured asset. This provision considered in the context of the other provisions of Section 13 (referred to above), signals the legislative intent that the sale or transfer of the secured asset by the secured creditor is prohibited only where its dues (the liability in full – vide sub-sections (2) and (4) of Section 13) together with all costs, charges and expenses incurred are tendered at any time before the date fixed for the sale or transfer of the secured asset. If there is no tender of the whole of the liability, the sale or transfer of the secured asset may proceed. On a true and fair construction of the relevant provisions of the Act (adverted to above), the provisions of Section 31 enumerate the classes of cases and circumstances on fulfillment of which an interest which would otherwise be a security interest is not so; and in such circumstance no proceedings under the Act may be initiated. If proceedings under the Act are validly initiated including on due consideration of the provisions of Section 31, the enforcement provisions of the Act, including as set out in sub-section (4) of Section 13 would not thereafter become inoperative. In the context of Section 31 (j) therefore, any payment made by a borrower to a secured creditor after issuance of the notice under Section 13 (2) would not affect or invalidate pursuit of the remedies available to a secured creditor under sub-section (4), even where on giving credit to such subsequent payments made, the amount due would fall below 20% of the principal amount and interest thereon. On this analysis, the provisions of Section 31 (j) and in particular clause (j) thereof are threshold conditions for valid initiation of processes under the Act for enforcement of the security interest. As analyzed and explained in Central Bank of India v. State of Kerala ( (2009) 4 SCC 94 ), the Securitization Act was enacted by the Parliament in purported exercise of the legislative field under Entry-45 in List-I of the Seventh Schedule of the Constitution. This legislation and the earlier 1993 Act were passed on consideration of the reports of the Tiwari and Narasimham Committees constituted by the Central Government. This legislation and the earlier 1993 Act were passed on consideration of the reports of the Tiwari and Narasimham Committees constituted by the Central Government. The Apex Court (at paragraph No. 23 of the judgment) characterized the Securitization Act as one of the most radical legislative measures for ensuring that dues of secured creditors including banks and financial institutions are recovered from the defaulting borrowers without any obstruction and for the first time the secured creditors have been empowered to take measures for recovery of their dues without the intervention of the Courts or tribunals. The Supreme Court also pointed out that this legislation apart from bringing into existence a new dispensation for registration and regulation of securitization or reconstruction companies; facilitating securitization of financial assets of banks and financial institutions; easy transferability of financial assets by the securitization or reconstruction company to acquire financial assets of banks and financial institutions, by issue of debentures or bonds or any other security in the nature of debenture; empowering the securitization or reconstruction company to raise funds by issue of security receipts to qualified institutional buyers, also empowers banks and financial institutions to take possession of the securities given for financial assistance and sale or lease the same or take over the management. In the facts and circumstances of the case however the amount due from the petitioner at no point of time was less than twenty per cent (20%) of the principal and interest thereon warranting application of the provisions of Section 31 (j) and consequently disapplication of the provisions of the Act. On the analysis above, there are no merits in this writ petition. The writ petition is accordingly dismissed. There shall however be no order as to costs.