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Madhya Pradesh High Court · body

2016 DIGILAW 516 (MP)

Surendra Jain S/o Rajendra Jain v. Shripad S/o Shri Madhao Kapil

2016-06-30

RAJENDRA MENON, VIVEK RUSIA

body2016
ORDER : Vivek Rusia, J. This order shall also govern disposal of connected W.P. No. 5227/12 as both the petitions involve common facts and grounds and are being decided analogously. 2. For the sake of convenience, facts are taken from W.P. No. 4649/2012. Petitioner has filed the present petition being aggrieved by the order dated 30.09.2010 passed by the Debt Recovery Tribunal, Jabalpur (for short 'the DRT') in Securitisation Application No.72/08 and part of the order dated 11.04.2012 passed by the Debt Recovery Appellate Tribunal, Allahabad (for short 'the DRAT') in Appeal No.R-70/2012 by which auction sale by the bank has been set aside. 3. For ready reference respondent No.1 who borrowed the loan is referred to as “borrower”. Respondent No.2 who is a financial institution advanced loan to respondent No.1 is referred as “bank” and the petitioner who purchased the property in auction sale is referred as “auction purchaser” in the facts of the case. 4. That respondent No.1 borrower took a housing loan from respondent No.2 bank of Rs. 10 lacs. The said loan was disbursed on 28.06.2003. The borrower availed the amount of Rs. 6,00,525/- against the term loan of Rs. 10 lacs from the bank. Towards the repayment of loan he has deposited only Rs. 5100/- on 07.08.2003 and Rs. 10,000/- on 31.03.2006. Thereafter, by way of cheques Rs. 80,200/- and Rs. 50,000/- were given to the bank but both cheques were dishonored due to insufficient funds. Since the loan amount was not paid, his account was classified as Non Performing Asset (NPA) under the norms fixed by the Reserve Bank of India. 5. Bank issued notice under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the SARFAESI ACT') to the borrower as well as guarantor demanding an amount of Rs. 7,56,700.85 including interest up to 31.03.2006 within a period of 60 days. Since the borrower failed to make repayment of the outstanding dues within the stipulated period of 60 days, the bank issued possession notice on 01.08.2006 and the same was published in the daily newspaper on 07.12.2006. Thereafter, the auction publication notice was issued for sale of the secured asset on 14.02.2007 inviting tenders up to 17.03.2007. By way of auction sale on 17.03.2007, the auction purchaser i.e. the petitioner offered the bid of Rs. 11 lacs which was further increased to Rs. Thereafter, the auction publication notice was issued for sale of the secured asset on 14.02.2007 inviting tenders up to 17.03.2007. By way of auction sale on 17.03.2007, the auction purchaser i.e. the petitioner offered the bid of Rs. 11 lacs which was further increased to Rs. 12,05,001 on negotiation. Vide letter dated 19.03.2007, the bank informed the borrower regarding the auction sale of his property in which highest bid of Rs. 12,05,001/- was received. It was further informed that in case there is any other buyer with a better offer, he may approach the bank together with 20% of the offer amount. Vide letter dated 08.12.2007 borrower was again informed by the bank to submit any alternative offer as against the higher offer. Vide letter dated 12.01.2008 bank wrote a letter to the auction purchaser to submit the balance sale consideration on or before 27.01.2008 or else the earnest money shall be forfeited. The auction purchaser accordingly deposited a cheque of Rs. 10,95,101/- with the respondent bank on 26.01.2008. This fact was also brought to the knowledge of the borrower by the bank vide letter dated 03.03.2008 and directed him to vacate the mortgage property. Vide letter dated 21.07.2008 the borrower wrote to the respondent/bank that he shall deposit the entire outstanding dues in the account latest by 24.07.2008. Vide letter dated 25.07.2008 a similar proposal was again given to the borrower to deposit the entire outstanding dues on or before 30.07.2008. Since the borrower did not turn up, the bank had no option but to accept the entire sale consideration deposited by the auction purchaser. Thereafter, the bank has issued the sale certificate on 12.09.2008 and the same was later on registered with the office of Sub-Register, Indore. The bank after adjusting the outstanding dues in the loan account of the borrower remitted an amount of Rs. 1,67,221.58 to another branch of SBI, Indore from where the loan was given to the borrower. Thereafter, after settlement of all the amount, the balance amount was refunded to the borrower vide letter dated 22.10.2008. 6. That the borrower approached this Court by way of writ petition No.6570/2008 in which vide order dated 23.10.2008 by way of interim relief the bank was restrained from taking physical possession from the petitioner subject to deposit of Rs. 10 lacs. The borrower in compliance of the said order submitted a cheque of Rs. 6. That the borrower approached this Court by way of writ petition No.6570/2008 in which vide order dated 23.10.2008 by way of interim relief the bank was restrained from taking physical possession from the petitioner subject to deposit of Rs. 10 lacs. The borrower in compliance of the said order submitted a cheque of Rs. 10 lacs with the bank on 03.11.2008. Since the account of the borrower was already closed after the auction sale, the bank did not present the said cheque. 7. The writ petition after notice came up for hearing and the respondents in the said writ petition raised an objection regarding the maintainability of the writ petition on the ground of availability of alternative remedy. Arguments were heard at length but vide order dated 20.11.2008 the writ petition was disposed of as the same was withdrawn by the borrower (petitioner) with a liberty to approach the DRT, Jabalpur under section 17 of the SARFAESI ACT. Thereafter, the borrower filed an application under section 17 which was registered as SA No.72/08 in which after notice reply was filed by the bank as well as by the auction purchaser. Initially, the interim relief was granted by the DRT in favour of the borrower but later on it was vacated on 18.06.2009. 8. During the pendency of the SA before the DRT, the bank has filed an application under section 14 of the SARFAESI ACT before the SDM for taking actual physical possession of the property in question. Vide order dated 29.07.2009, the said application was allowed and the possession was taken from the borrower and handed over to the auction purchaser. The said order has become final as it was not challenged. 9. Learned DRT vide order dated 30.09.2010 has allowed the application filed by the borrower on three grounds. Firstly, that account of respondent No.1 borrower was not classified as NPA, therefore, the provisions of section 13 cannot be invoked. Secondly, on the ground that the objection filed by the borrower under section 13(2) has not been decided under section 13(3A) of the SARFAESI ACT. Firstly, that account of respondent No.1 borrower was not classified as NPA, therefore, the provisions of section 13 cannot be invoked. Secondly, on the ground that the objection filed by the borrower under section 13(2) has not been decided under section 13(3A) of the SARFAESI ACT. Thirdly, on the ground that 25% of the auction amount was not deposited on the same day and remaining 75% of the amount was not deposited as per the provisions of the Security Interest (Enforcement) Rules, 2002 (for short 'the Rules of 2002') The learned DRT after setting aside the auction sale has set aside the sale certificate dated 12.09.2008 and directed the bank to take possession from the auction purchaser and hand over to the borrower within a period of 15 days and return the amount of Rs. 12,05,001/- along with interest at the rate of 18% to the auction purchaser. The borrower was further directed to deposit the entire dues towards loan account within a period of 15 days from the date of the order, failing which the bank is at liberty to realise the dues by way of proceedings under the SARFAESI ACT of 2002. 10. Being aggrieved by the said order the bank filed review petition No.5/10 which was also dismissed vide order dated 18.04.2011. Thereafter, the bank filed an appeal under section 18 of the SARFAESI ACT of 2002 before the DRAT. By order dated 11.04.2012 the DRAT has allowed the appeal filed by the bank in part and partially upheld the order of the DRT. The DRAT reversed the finding of the DRT in respect of classification of the account as NPA. The DRAT has held that no objection to the notice under section 13(2) has ever been submitted by the borrower, therefore, the question of decision does not arise but the DRAT has affirmed the order of the DRT in respect of the finding recorded with regard to violation of provisions of Rule 9(3) and 9(4) of the Rules of 2002 and held that the auction sale has rightly been set aside by the DRT. It is important to mention here that the auction purchaser did not prefer any appeal against the order of the DRT before the DRAT and only the bank had filed an appeal. 11. It is important to mention here that the auction purchaser did not prefer any appeal against the order of the DRT before the DRAT and only the bank had filed an appeal. 11. That now the auction purchaser filed a writ petition No.4649/12 challenging the orders of the DRT as well as the DRAT. The bank has filed writ petition against the order of DRT which is registered as W.P.No.5227/12. In both the writ petitions notices were issued, returns were filed by the respective parties and thereafter rejoinder was filed. After admission, the writ petitions were directed to be heard finally. Respondent No.1/borrower filed the return in support of the order of DRT as well as DRAT and the respondent/bank filed the return in support of the petitioner as the bank has filed independent writ petition against the order of DRT as well as DRAT. 12. We have heard learned counsel for the parties at length. Shri Sethi, learned Senior Counsel on behalf of the auction purchaser submits that the learned DRT as well as DRAT committed an error of law as well as fact while not considering the fact that the auction notice specifically provided that the tenderer should pay 10% of the reserved price along with the tender and the remaining entire amount has to be deposited within 15 days from the date of communication of acceptance of tender by the bank. The auction purchaser has fully complied with the said condition by depositing 10% and 90% within 15 days from the receipt of the letter from the bank. It is further submitted that the requirement of Rule 9(3) of the Rules of 2002 is not mandatory and substantial compliance has been made by the auction purchaser by making the entire payment and the sale certificate was issued on 12.01.2008. The bank issued notices to the borrower informing him about the sale. The borrower had ample opportunity to make the payment to the bank. It is submitted that no equity can be said to be in favour of the defaulter merely because he has deposited Rs. 10 lacs in pursuant to the interim order passed by the High Court. Since the writ petition was finally disposed of, therefore, the interim order stands automatically vacated. That the auction purchaser being a bona fide purchaser, his interest ought to have been protected by the DRT as well as DRAT. 10 lacs in pursuant to the interim order passed by the High Court. Since the writ petition was finally disposed of, therefore, the interim order stands automatically vacated. That the auction purchaser being a bona fide purchaser, his interest ought to have been protected by the DRT as well as DRAT. He submitted that during the pendency of these proceedings, he has already sold part of the property to respondents No.3 & 4. 13. Shri Sinhal, learned counsel for the bank argued that in W.P.No.4649/2012 the bank is respondent and in W.P.No.5227/12 in which the bank is the petitioner. He submitted that since the borrower could not comply with the mandatory provisions provided under section 13 of the SARFAESI ACT of 2002, the bank rightly auctioned the said house and issued sale certificate in favour of the auction purchaser. Since the mandatory limit was over, the DRT as well as DRAT ought not to have set aside the sale. He has justified the action of the bank by submitting that the requirement of deposit of 25% as contemplated under Rule 9 (3) of the Rules of 2002, on the date of auction itself occurs if the sale is finalized. He submitted that the auction purchaser is required to deposit 25% of the sale price only after sale is confirmed along with the tender and under sub section (4) since the auction purchaser has deposited the entire amount within fifteen days from 12.01.2008, therefore, the bank has rightly confirmed the sale. He has further submitted that he has filed three applications in the writ petition. In IA No.2168/2013, which is an application under Order 5, Rule 16 of CPC prayer has been made by the bank that respondent No.1 i.e. borrower be directed to delete certain part of the pleadings in the return in which he has made baseless allegations against the bank. Since the bank acted in accordance with law and did their duty to recover the loan, the allegation of fraud and misleading the court ought not to have been levelled against the bank. IA No.2638/2013, an application under Order 13, Rule 10 CPC has been filed seeking direction to produce the original copy of un-issued TDR No.CBS/164173 Dated 24.10.2009 from the borrower. IA No.2639/2013, an application under Order 13, Rule 10 CPC has been filed praying for production of record of original memo dated 30.06.2010. IA No.2638/2013, an application under Order 13, Rule 10 CPC has been filed seeking direction to produce the original copy of un-issued TDR No.CBS/164173 Dated 24.10.2009 from the borrower. IA No.2639/2013, an application under Order 13, Rule 10 CPC has been filed praying for production of record of original memo dated 30.06.2010. All these applications were directed to be considered at the time of final hearing. So far as the allegations levelled against the bank are concerned, counsel for the borrower in presence of borrower has made a statement that he is not pressing the said remarks and ready to withdraw the same from his reply and prayed that it may be treated as withdrawn. Since we are deciding the question of law involved in this case, therefore, other two applications need not be considered at the time of final hearing. 14. Counsel for the bank has further submitted that even after acceptance of the offer of the auction purchaser, an opportunity was given to the borrower to repay the loan amount. In response to the said letter, he replied to the bank vide letter dated 25.07.2008 informing that he shall deposit the balance amount positively by 30.07.2008 in any case, failing which he shall loose his viable mercies and available favours from the bank and the bank can finalise the confirmation of sale of his house. Hence, he contended that the DRT as well as the DRAT wrongly set aside the auction sale. 15. Shri Abhinav Malhotra, learned counsel on behalf of the borrower submitted that any sale or transfer of the secured assets cannot take place without duly informing the borrower of the time and date of such sale or transfer so as to enable the borrower to tender the dues of the secured creditor with all costs, charges and expenses as contemplated under Section 13 (8) of the SARFAESI ACT of 2002. He further contended that Rule 9(1) of the Rule of 2002 itself prescribes that no sale of immovable property would take place before expiry of thirty days from the date on which the public notice of sale is published. He has placed heavy reliance over Rule 9(3) that the auction purchaser has to pay 25% of the amount of sale price to the authorised officer conducting the sale and in default of such deposit, the property shall forthwith be sold again. He has placed heavy reliance over Rule 9(3) that the auction purchaser has to pay 25% of the amount of sale price to the authorised officer conducting the sale and in default of such deposit, the property shall forthwith be sold again. In the present case, undisputedly, the auction purchaser has deposited only 10% of the amount, therefore, in violation of the mandatory provisions of the Act as well as Rules of 2002 the DRT and DRAT have rightly quashed the auction sale. He has further submitted that the bank ought to have interested in getting his money rather than auctioning the property. The property which belongs to the borrower should not be taken from him in view of the provisions of law. Section 13 and Rule 9 gives valuable right to the borrower to protect his assets and in the present case the same has been infringed by the conduct of the bank. He has further submitted that the writ petition filed by the auction purchaser is not maintainable because he has not filed any appeal under Section 18 of the SARFAESI Act, 2002 before the DRAT against the order of DRT dated 30.09.2010, hence the petition is liable to be dismissed on this ground alone. In support of his contentions, he has placed reliance over the decision in the matter of Mathew Varghese v. M. Amritha Kumar and Others reported in (2014) 5 SCC 510; J. Rajiv Subramaniyan and Another v. Pandiyas and Others reported in (2014) 5 SCC 651 ; United Bank of India v. Satyawati Tondon and Others reported in (2010) 8 SCC 110 ; General Manager, Shri Siddeshwara Cooperative Bank Limited and Another v. Iqbal and Others reported in (2013) 10 SCC 83 and Rao Mahmood Ahmad Khan v. Ranbir Singh and Others reported in 1995 Supp (4) SCC 275. 16. Shri Umesh Gajankush, learned counsel appeared on behalf of the respondents No.3 and 4 i.e. subsequent purchaser has argued in support of the auction purchaser. 17. We have heard learned counsel for the parties at length. 18. Having heard learned counsel for the parties and perused the judgment and orders passed by DRT, DRAT, provisions of the SARFAESI Act of 2002 and Rules of 2002, first we shall consider the writ petition filed by the auction purchaser (WP No.4649/2012). 17. We have heard learned counsel for the parties at length. 18. Having heard learned counsel for the parties and perused the judgment and orders passed by DRT, DRAT, provisions of the SARFAESI Act of 2002 and Rules of 2002, first we shall consider the writ petition filed by the auction purchaser (WP No.4649/2012). It is not disputed fact in the writ petition that the auction purchaser participated in the auction proceedings and deposited only 10% of the amount at the time of auction. Thereafter, after receiving the letter dated 12.01.2008 from the bank he deposited the balance 90% of the sale consideration which was a tender condition issued by the bank, however, the rule provides deposit of 25% and 75% and then only sale would be finalized. That the auction purchaser who was party in the writ petition No.6570/2008 and thereafter before the DRT in SA No.72/2008 the orders were passed in his presence. The DRT vide order dated 30.09.2010 has set aside the auction sale and directed the bank to take possession from the auction purchaser and deliver it to the borrower. Despite that, he did not prefer an appeal under Section 18 of the SARFAESI Act of 2002 before the DRAT, therefore, he did not exercise his right of appeal by challenging the order of DRT and accepted the same and now in Writ Petition he is directly challenging the order of DRT as well as DRAT. It means he is directly challenging the order of DRT without exhausting the statutory remedy of appeal, therefore, the petition filed by the borrower i.e. Writ Petition No.4649/2012 is not maintainable, hence it is dismissed. 19. Since the bank which has filed the appeal against the order of DRT before the DRAT has now filed the writ petition before this court (WP No.5227/2012) challenging the order of DRT as well as DRAT, therefore, we shall now deal with the writ petition filed by the Bank and the grounds raised therein. The core question involved in this petition is “Whether the bank has auctioned the property of borrower strictly in compliance of Section 13 of the SARFAESI Act of 2002 and Rule 9 of the Rules of 2002”. The core question involved in this petition is “Whether the bank has auctioned the property of borrower strictly in compliance of Section 13 of the SARFAESI Act of 2002 and Rule 9 of the Rules of 2002”. In order to examine the correctness of the impugned judgment of DRT as well as DRAT, Section 13 (1) & (8) of the SARFAESI Act OF 2002 and Rule 9 of the Rules of 2002 are reproduced herein below: 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) xxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxx (3) xxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxx (8) If the dues of the secured creditor together with all costs, charges and expenses incurred by him are tendered to the secured creditor at any time before the date fixed for sale or transfer, the secured assets 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. Rule 9. 9. Time of sale, issues of sale certificate and delivery of possession, etc.- (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. (2) The sale shall be confirmed in favour of the purchaser who has offered the highest sale price in his bid or tender or quotation or offer to the authorised officer and shall be subject to confirmation by the secured creditor: Provided that no sale under this rule shall be confirmed, if the amount offered by sale price is less than the reserve price, specified under sub rule (5) of rule 9. Provided further that if the authorised officer fails to obtain a price higher than the reserve price, he may, with the consent of the borrower and the secured creditor effect the sale at such price. Provided further that if the authorised officer fails to obtain a price higher than the reserve price, he may, with the consent of the borrower and the secured creditor effect the sale at such price. (3) On every sale of immovable property, the purchaser shall immediately pay a deposit of twenty five per cent of the amount of the sale price, to the authorised officer conducting the sale and in default of such deposit, the property shall forthwith be sold again. (4) The balance amount of purchase price payable shall be paid by the purchaser to the authorised officer on or before the fifteenth day of confirmation of sale of the immovable property or such extended period as may be agreed upon in writing between the parties. (5) In default of payment within the period mentioned in such rule (4), the deposit shall be forfeited and the property shall be resold and the defaulting purchaser shall forfeit all claim to the property or to any part of the sum for which it may be subsequently sold. (6) On confirmation of sale by the secured creditor and if the terms of payment have been complied with, the authorised officer exercising the power of shall issue a certificate of sale of the immovable property in favour of the purchaser in the form given in Appendix V to these rules. (7) Where the immovable property sold is subject to any encumbrances, the authorised officer may, if he thinks fit, allow the purchaser to deposit with him the money required to discharge the encumbrances and any interest due thereon together with such additional amount that may be sufficient to meet the contingencies or further cost, expenses and interest as may be determined by him: (Provided that if after meeting the cost of removing encumbrances and contingencies there is any surplus available out of the money deposited by the purchaser such surplus shall be paid to the purchaser within fifteen days from the date of finalisation of the sale.) (8) On such deposit of money for discharge of the encumbrances, the authorised officer (shall) issue or cause the purchaser to issue notices to the persons interested in or entitled to the money deposited with him and take steps to make the payment accordingly. (9) The authorised officer shall deliver the property to the purchaser free from encumbrances known to the secured creditor on deposit of money as specified in sub rule (7) above. (10) The certificate of sale issued under sub rule (6) shall specifically mention that whether the purchaser has purchased the immovable secured asset free from any encumbrances known to the secured creditor or not. 20. Section 13 sub-Section (8) of the SARFAESI Act of 2002 specifically provides that if the dues of secured creditor together with all costs, charges and expenses are tendered at any time before the date fixed for sale, the secured assets shall not be sold or transferred by the secured creditor. Rule 9 sub-section (1) read with section 8 of the Rules of 2002 gives a valuable right to the borrower that no sale of immovable property under this rule shall take place before the expiry of 30 days from the date on which the public notice for sale is published. It means before the auction sale 30 days time should be given to the borrower to make the payment to the secured creditor and if he fails to make payment then only auction sale takes place under rule 9. The Hon'ble Supreme Court in the case of Mathew Varghese (supra) has considered the scope of Rule 9. The relevant paragraphs of the aforesaid judgment are reproduced herein below:- 30. Therefore, by virtue of the stipulations contained under 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 expenses and any such sale or transfer effected without complying with the said statutory requirement would be a constitutional violation and nullify the ultimate sale. 31. Once the said legal position is ascertained, the 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. 31. Once the said legal position is ascertained, the 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 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 (6) of Rule 8 again states that the authorised 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 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) contemplates a clear 30 days individual notice to the borrower and also a public notice by way of publication in the 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 the 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) 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. 38. 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. 38. 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 meed by itself will not deprive the mortgagor of his right to redemption, that the extinction of the right of redemption has to be subsequent to the deed conferring such power, that the right of redemption is not extinguished at the expiry of the period, that the enquiry 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 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 in Narandas Karsondas while construing Section 60 of the TP Act. But as rightly contended by Mr. Shyam Divan, we fail to note any distinction to be drawn while applying the above said 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 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 TP 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 the Court. Keeping the said situation in mind, it was held that the right of redemption will not 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 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. It was also stated that the equity of redemption is not extinguished by mere contract for sale and the most important and vital principle 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 served on the mortgagor. Therefore, it was held that until the sale is complete by registration of sale, the mortgagor does not lose the right of redemption. It was also made clear that it was erroneous to suggest that the mortgagee would be acting as the agent of the mortgagor in selling the property. 53. We, therefore, hold that unless and until a clear 30 days notice is given to the borrower, no sale or transfer can be resorted to by a secured creditor. In the event of any such sale properly notified after giving 30 days clear notice to the borrower did not take place as scheduled for reasons which cannot be solely attributable to the borrower, the secured creditor cannot effect the sale or transfer of the secured asset on any subsequent date by relying upon the notification issued earlier. In other words, once the sale does 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 procedure prescribed above will have to be followed afresh, as the notice issued earlier would lapse. In that respect, the only other provision to be noted is sub-rule (8) of Rule 8 as per which sale by any method other than public auction or public tender can be on such terms as may be settled between the parties in writing. As far as sub-rule (8) is concerned, the parties referred to can only relate to the secured creditor and the borrower. As far as sub-rule (8) is concerned, the parties referred to can only relate to the secured creditor and the borrower. It is, therefore, imperative that for the sale to be effected under Section 13(8), the procedure prescribed under Rule 8 read along with Rule 9(1) has to be necessarily followed, inasmuch as that is the prescription of the law for effecting the sale as has been explained in detail by us in the earlier paragraphs by referring to Sections 13(1), 13(8) and 37, read along with Section 29 and Rule 15. In our considered view any other construction will be doing violence to the provisions of the SARFAESI Act, in particular Sections 13(1) and (8) of the said Act. 21. In the case of General Manager, Sri Siddeshwara Cooperative Bank Ltd. and another v. Ikbal and others reported in (2013) 10 SCC 83 , the Hon'ble Supreme Court has considered the requirement of deposit of 25% under rule 9 (3) of the Rules of 2002. The relevant paragraphs 14 & 19 of the aforesaid order are reproduced below: 14. A reading of sub rule (1) of Rule 9 makes it manifest that the provision is mandatory. The plain language of Rule 9(1) suggests this. Similarly, Rule 9(3) which provides that the purchaser shall pay a deposit of 25% of the amount of the sale price on the sale of immovable property also indicates that the said provision is mandatory in nature. As regards balance amount of purchase price, sub rule (4) provides that the said amount shall be paid by the purchaser on or before the fifteenth day of confirmation of sale of immovable property or such extended period as may be agreed upon in writing between the parties. The period of fifteen days in Rule 9(4) is not that sacrosanct and it is extendable if there is a written agreement between the parties for such extension. What is the meaning of the expression “written agreement between the parties” in Rule 9(4)? The 2002 Rules do not prescribe any particular form for such agreement except that it must be in writing. The use of the term “written agreement” means a mutual understanding or an arrangement about relative rights and duties by the parties. For the purposes of Rule 9(4), the expression “written agreement” means nothing more than a manifestation of mutual assent in writing. The use of the term “written agreement” means a mutual understanding or an arrangement about relative rights and duties by the parties. For the purposes of Rule 9(4), the expression “written agreement” means nothing more than a manifestation of mutual assent in writing. The word “parties” for the purposes of Rule 9(4) we think must mean the secured creditor, borrower and auction purchaser. 19. There is no doubt that Rule 9(1) is mandatory but this provision is definitely for the benefit of the borrower. Similarly, Rule 9(3) and Rule 9(4) are for the benefit of the secured creditor (or in any case for the benefit of the borrower). It is settled position in law that even if a provision is mandatory, it can always be waived by a party (or parties) for whose benefit such provisions has been made. The provision in Rule 9(1) being for the benefit of the borrower and the provisions contained in Rule 9(3) and Rule 9(4) being for the benefit of the secured creditor (or for that matter for the benefit of the borrower), the secured creditor and the borrower can lawfully waive their right. These provisions neither expressly nor contextually indicate otherwise. Obviously, the question whether there is waiver or not depends on the facts of each case and no hard and fast rule can be laid down in this regard. 22. In view of the above provisions of law and the law laid down by the Supreme Court, we shall consider the findings recorded by the DRT as well as DRAT. The DRT has recorded the finding which is reproduced below: Without classification as NPA and without considering the objections lodged by the appellant to 13(2) notice the bank has proceeded to take possession of the property as per Ext.R-2 & R-3 on 01/08/06 and, therefore, issued the auction notice dated 14/02/07 Ext.A-4 and proceeded and conducted the auction on 17/03/07 finalising the bid in favour of the third respondent who had bid the property for Rs. 11 lacs which was the reserve price of the property as per Ext.A-4 the auction notice. This amount was thereafter by negotiation enhanced to Rs. 12,05,001/-. Admittedly the earnest money and the deposit of 25% was not done by the bidder on the date of auction as stipulated in Ext.A-4. So also the balance amount of Rs. 11 lacs which was the reserve price of the property as per Ext.A-4 the auction notice. This amount was thereafter by negotiation enhanced to Rs. 12,05,001/-. Admittedly the earnest money and the deposit of 25% was not done by the bidder on the date of auction as stipulated in Ext.A-4. So also the balance amount of Rs. 12,05,001/- is stated to have been deposited by cheque on 26/01/08 which is admittedly a National holiday being Republic Day whereas the bidder was to deposit the balance dues on or before 15 days after confirming the sale in his favour. The contention that the Respondent Bank had as per Ext.R6 to R8 requested the appellant to produce persons with better offer than the bid for Rs. 12,05,001/- by the 3rd Respondent and on his failure to do so, the bid for 12,05,001/- was finalised in favour of respondent No.3 who had deposited the entire amount on 28.01.08 with due intimation to the Appellant as per Ext. R9 and the subsequent letters dated 10.04.08, 29.04.08 Ext.R10 & R11 to vacate the premises thus sold to Respondent no.3 will not help the Bank to rectify the statutory violations and utter disregard for the law laid down by the Supreme Court shown by the authorised officer of the Bank in taking recourse to recovery of dues under Act, 2002. Having conducted the auction on 17.03.07, the Bank has called upon the borrower to repay the dues and granted further time of 1 year to the bidder (who is seen to have not deposited 25% on the date of Auction as per the terms laid down in Ext.A4) to deposit the balance amount of Rs. 10,95,101/- by cheque on 26.01.08 cleared on 28.01.08 again in violation of the terms and conditions of Ext.A4 and had issued the sale certificate Ext.R17 on 12.09.08. It is stated in the reply that after appropriating the dues towards the Home Loan account, out of the remaining amount the dues of Rs. 1,67,221.58 was appropriated towards another account of the borrower as per Ext.R19 dated 5.8.08 for which demand notice Ext.R18 dated 31.07.08 was issued. Ext.R22 reveals that an amount of Rs. 16772/- was deducted towards Recovery agent charges for the dues amounting to Rs. 1,67,221.58 in the personal account. 1,67,221.58 was appropriated towards another account of the borrower as per Ext.R19 dated 5.8.08 for which demand notice Ext.R18 dated 31.07.08 was issued. Ext.R22 reveals that an amount of Rs. 16772/- was deducted towards Recovery agent charges for the dues amounting to Rs. 1,67,221.58 in the personal account. So called demand notice was issued on 31.07.08 and amount was appropriated on 5.08.08 without any effort for recovery towards this account. 23. The aforesaid finding of the DRT has been upheld by the DRAT has been considered in detail in paras-11,12,14,15,16,17 and held that no amount of 25% was deposited on the date of auction. Relevant paragraphs-16 & 17 of the order passed by the DRAT are reproduced below: 16. Sub rule (4) of Rule 9 prescribes the manner of extension of time by way of agreement in writing between the parties. The aforesaid Rule has to be given effect to mean that things are to be done in the manner as prescribed under the Rules. In this reference, the judgment passed by the Apex Court in J&K Housing Board and Another v. Kunwar Sanjay Krishan Kaul and Others, (2011) 10 SCC 714 is relevant and its relevant paragraph No.32 is as under: “32. It is settled law that when any statutory provision provides a particular manner for doing a particular act, the said thing or act must be done in accordance with the manner prescribed therefor in the Act. Merely because the parties concerned were aware of the acquisition proceedings or served with individual notices does not make the position alter when the statute makes it very clear that all the procedures/modes have to be strictly complied with the manner provided therein. Merely because the land owners failed to submit their objections within 15 days after the publication of notification under Section 4(1) of the State Act, the authorities cannot be permitted to claim that it need not be strictly resorted to. 17. On the basis of the aforesaid, admittedly, there had been no agreement between the parties to extend the period of deposit, but there had been correspondences only and much correspondence cannot be terms to be an agreement in writing to extend the period. There was no letter even on part of the respondent No.2 that he accepted the same. 17. On the basis of the aforesaid, admittedly, there had been no agreement between the parties to extend the period of deposit, but there had been correspondences only and much correspondence cannot be terms to be an agreement in writing to extend the period. There was no letter even on part of the respondent No.2 that he accepted the same. However, the time could only be extended for deposit of remaining amount of 75% only by way of an agreement in writing between the parties, which was not at all entered into, therefore, the judgment passed by the Tribunal by which the auction has been set aside does not require any interference. Accordingly, the findings in this regard recorded by the Tribunal are to be upheld. More so, on the date of auction, as per Rule 9(3) as aforesaid, no amount of 25% was deposited on the date of auction. 24. Since the statutory Tribunal and the appellate Tribunal after examining the record as well as provisions of law has considered that there is a violation of Rule 9(3) in the auction of the property and the Supreme Court has held that these provisions are mandatory in nature and are required to be complied with, therefore, we have no option but to uphold the order the DRT as well as DRAT in respect of quashing the auction sale. In the present case in the auction notice itself the bank has wrongly provided deposit of 10% amount along with the tender and remaining 90% after acceptance of the tender contrary to sub rule (3) of rule 9. The auction was held on 17.03.2007 and vide letter dated 12.01.2008 the bank has directed the auction purchaser to deposit the balance amount by 27.01.2008 whereas rule 9(4) contemplates that balance amount of the purchase price shall be paid by the purchaser to the authorised officer on or before 15th day of confirmation of the sale or such extended period as may be agreed upon in writing between the parties. In the present case no such agreement in writing was arrived at between the auction purchaser and the bank and time cannot be treated to be extended by way of correspondence in absence of any agreement in writing. In response to the letter the auction purchaser deposited the amount on 26.01.2008. 25. In the present case no such agreement in writing was arrived at between the auction purchaser and the bank and time cannot be treated to be extended by way of correspondence in absence of any agreement in writing. In response to the letter the auction purchaser deposited the amount on 26.01.2008. 25. The contention of the auction purchaser cannot be accepted that in the present case sale has never been confirmed or finalised prior to 12.01.2008 is liable to be rejected. As per sub rule (2) of Rule 9 the sale shall be confirmed in favour of the purchaser who has offered the highest price subject to the fulfilment of the conditions as mentioned in the proviso. When the auction purchaser has offered the sale price more than the reserve price and the authorised officer has obtained the higher price than the reserve price then such an auction sale is treated to be confirmed and thereafter the auction purchaser is required to deposit 25% of the sale amount to the officer conducting sale. It means at the time of sale the auction purchaser should deposit 25% amount to the officer who is conducting the sale and the balance amount shall be paid on or before 15 days of confirmation of the sale. In sub rule (4) the word “confirmation of sale” is also mentioned which reflects that the sale has already been confirmed as per sub rule (2) the authorised officer has received highest sale price in the bid. In the present case admittedly the bank sent a letter dated 12.01.2008 demanding balance amount much after 17.03.2007 then only the auction purchaser deposited the balance amount and that too not in the ratio of 25%:75%, therefore, we are of the considered opinion that the writ petition filed by the auction purchaser as well as the bank is liable to be dismissed. Accordingly, both petitions are hereby dismissed.