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2020 DIGILAW 374 (TS)

Indian Overseas Bank v. Debts Recovery Tribunal I

2020-03-12

M.S.RAMACHANDRA RAO, T.AMARNATH GOUD

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ORDER : M.S. Ramachandra Rao, J. Though notice is served on respondent Nos.2 to 4, there is no representation on their behalf. 2. In this Writ Petition, the petitioner Bank has assailed order dt.27-12-2019 passed in Review Application No.11 of 2019 in S.A.No.343 of 2017 on the file of the Debts Recovery Tribunal-I at Hyderabad. 3. The said Secutarization Application had been allowed by the said Tribunal on 29-07-2019 on the ground that 30 days gap was not maintained by the petitioner Bank between the notice dt.27-02-2018 issued under Rule 8(6) and the notice issued under Rule 9(1) of the Security Interest (Enforcement) Rules, 2002 ( for short, ‘the Rules’). The Tribunal had held that Rule 8(6) notice dt.27-02-2018 was served on the respondent Nos.2 and 3 on 06-03-2018; and without waiting for the expiry of 30 days from the date of receipt of Rule 8(6) notice, the petitioner had published e.auction sale notice for sale of the schedule properties in the news papers on 01-03-2018, fixing the auction on 06-04-2018. 4. In Canara Bank Vs. M. Amarender Reddy (2017) 4 SCC 735 , the Supreme Court held : “14. The secured creditor, after it decides to proceed with the sale of secured asset consequent to taking over possession (symbolic or physical as the case may be), is no doubt required to give a notice of 30 days for sale of the immovable asset as per sub-rule (6) of Rule 8. However, there is nothing in the Rules, either express or implied, to take the view that a public notice under sub-rule (6) of Rule 8 must be issued only after the expiry of 30 days from issuance of individual notice by the authorised officer to the borrower about the intention to sell the immovable secured asset. In other words, it is permissible to simultaneously issue notice to the borrower about the intention to sell the secured assets and also to issue a public notice for sale of such secured asset by inviting tenders from the public or by holding public auction. The only restriction is to give thirty days’ time gap between such notice and the date of sale of the immovable secured asset. 15. The only restriction is to give thirty days’ time gap between such notice and the date of sale of the immovable secured asset. 15. We hold that the High Court has committed a manifest error in assuming that the notice of intention of sale to be given to the borrower and a public notice for sale cannot be simultaneously issued. The High Court was also not right in observing that after a notice regarding intention to sell the secured asset under sub-rule (6) of Rule 8 is given by the authorised officer to the borrower, only on expiry of 30 days there from can the secured creditor take a decision about the mode of sale referred to in sub-rule (5) of Rule 8 after giving notice to the borrower and then issue a public notice after expiry of further thirty days. By this interpretation, the High Court has virtually re-written the provisions and inevitably extended the time-frame of 30 days specified in sub-rule (6) of Rule 8 (at least in relation to the sale of secured asset by inviting tenders from the public or by holding public auction). 16. To put it differently, the only restriction placed on the secured creditor is to serve a notice of 30 days on the borrower intimating him about its intention to sell the immovable secured asset and the mode and date fixed for sale; and also to issue a public notice in two leading newspapers, if the sale of such secured asset is effected either by inviting tenders or by holding public auction, notifying the date of sale after 30 clear days from such notice. There is no need to wait for the expiry of 30 days from issuance of notice of intention to sell the secured asset given to the borrower, for publication of a public notice for sale of such asset. Nor is there any requirement to give a separate individual notice prior to deciding on the mode of sale of the secured asset. To the above extent, the opinion of the High Court in the impugned judgment will have to be overturned.” 5. Nor is there any requirement to give a separate individual notice prior to deciding on the mode of sale of the secured asset. To the above extent, the opinion of the High Court in the impugned judgment will have to be overturned.” 5. Thus there is nothing in the Rules, either express or implied, to take the view that a public notice under sub-rule (6) of Rule 8 must be issued only after the expiry of 30 days from the issuance of individual notice by the Authorised Officer to the borrower about the intention to sell the immovable secured asset. The only restriction is to give 30 days time gap between such notice and the date of sale of the immovable secured asset. There is no need for the secured creditor to wait for the expiry of 30 days from the issuance of notice of intention to sell the secured asset given to the borrower, for publication of a public notice for sale of such asset. 6. Similar view has been taken by this Court in M/s.Adhya Industries Vs. Vijaya Bank Order dt.08-01-2020 in W.P.No.25174 & 34129 of 2018 (DB). 7. Having regard to the above settled legal position, the view of the Debts Recovery Tribunal-I in Review Application No.11 of 2019 in S.A.No.343 of 2017 that there should be a gap of 30 days between service of notice under Rule 8(6) and issuance of notice under Rule 9(1) of the Rules, cannot be countenanced. 8. Accordingly, the Writ Petition is allowed. Order dt.27-12-2019 passed in Review Application No.11 of 2019 in S.A.No.343 of 2017 is set aside and the said Review Application is allowed. 9. Pending miscellaneous petitions, if any, shall stand closed. No order as to costs.