JUDGMENT : Madhav J. Jamdar, J. The Petitioner is the owner of Heritage Bungalow, Mittal Grandeur, Junction of Khatau Road and Captain Prakash Rehe Marg, C.S. No. 85, Colaba Division, Street No. 25, Cuffe Parade, Mumbai-400030 (hereinafter referred to as “the said property”). The Petitioner is also a co-borrower. The Petitioner, Respondent No. 4 and Respondent No. 5 availed financial assistance of aggregate amount of Rs. 111,15,22,899/- (Rs. One Hundred Eleven Crores Fifteen Lakhs Twenty Two Thousand Eight Hundred Ninety-Nine) from Respondent No. 2 by five different loans granted on various dates. The said property was mortgaged with Respondent No. 2 as security towards said loan. The Respondent No. 2 sold the said property to Respondent No. 6 by private treaty under Rule 8(5) of the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as “the said Rules”). The said Rules are made by the Central Government in exercise of the powers conferred by sub-Section 1 and Clause (b) of sub-Section 2 of Section 38 read with sub-Sections 4, 10 and 12 of Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “the said Act”). 2. Reliefs sought in the Petition:— 3. The Petitioner by present Writ Petition has inter alia sought following relief:— “(a) that this Hon'ble Court be pleased to hold the Rule 6(iii) of the Impugned Notification GSR 1046 (E) dated 9th November 2016 (Exhibit “A” hereto) insofar as it removes the requirement of consent of borrower for the purpose of sale of secured assets by way of private treaty is unconstitutional, illegal and void;” 4. By Rule 6(iii) of said Notification being G.S.R.1046 (E) dated 3rd November, 2016 (wrongly mentioned as 9th November 2016 in prayer clause) sub-Rule 8 of Rule 8 of said Rules is amended by substituting the words “between the parties in writing” by the words “between the secured creditor and proposed purchaser in writing”. 5. The original Rule 8(8) is as follows:— “Rule 8(8) Sale by any methods other than public auction or public tender, shall be on such terms as may be settled between the parties in writing.” (Emphasis supplied) The said original Rule 8(8) is interpreted by the Supreme Court in Mathew Varghese v. M. Amritha Kumar, (2014) 5 SCC 610 and General Manager Sri. Siddheshwara Co-operative Bank Ltd. v. Ikbal, (2013) 10 SCC 83 by holding that the word “parties must mean the secured creditor, borrower and auction purchaser”. 6. The amended Rule 8(8) as amended by impugned notification dated 3rd November, 2016 (hereinafter referred to as “the amended Rule”) is as follows:— “Rule 8(8) Sale by any methods other than public auction or public tender, shall be on such terms as may be settled between the secured creditor and the proposed purchaser in writing.” (Emphasis supplied) Thus, the Petitioner is challenging constitutional validity of amended Rule 8(8) as it removes the requirement of consent of borrower for the purpose of settlement of terms of sale for conducting the same by obtaining quotations or by private treaty of secured assets by secured creditor/authorized officer. 7. There are several reliefs sought in the petition. This Court by order dated 27th October 2020 (passed in LDVCIA No. 1 of 2020 in this Writ Petition) clarified that for other reliefs the remedy is before the Debt Recovery Tribunal and this Writ Petition is restricted to prayer regarding constitutional validity of Rule 8(8). All the parties before us agreed that the scope of Writ Petition is restricted only to the extent of examining the constitutional validity of Rule 8(8) as amended by Notification bearing No. GSR 1046(E) dated 3rd November 2016 and as far as other reliefs are concerned, the Petitioners are at liberty to pursue the Securitisation Application No. 116 of 2019 filed under Section 17 of the said Act pending before DRTI, Mumbai or to take appropriate proceedings in that behalf. 8. Factual background:— Before setting out the rival pleadings, contentions, submissions and consideration of the same, it is necessary to set out the factual position:— (a) On 31st August, 2014, 24th March, 2015, 31st August, 2016, 9th July, 2018 and 27th September, 2018, the Respondent No. 2 by five separate loans granted aggregate financial assistance of Rs. 111,15,22,899/- (Rs. One Hundred Eleven Crores, Fifteen Lakhs Twenty-Two Thousand Eight Hundred Ninety-Nine) to Petitioner, Respondent No. 4 and Respondent No. 5 for which the said property was secured by way of mortgage. 111,15,22,899/- (Rs. One Hundred Eleven Crores, Fifteen Lakhs Twenty-Two Thousand Eight Hundred Ninety-Nine) to Petitioner, Respondent No. 4 and Respondent No. 5 for which the said property was secured by way of mortgage. (b) The account of the borrowers was classified as NPA on 17th April 2019, 9th May 2019 and 15th May 2019 and consequently notices u/s. 13(2) of the said Act were issued by Respondent No. 2 calling upon the borrowers to repay the outstanding amount of Rs. 100,95,60,734/- (Rs. One Hundred Crores Ninety Five Lakhs, Sixty Thousand Seven Hundred Thirty-Four) within 60 days thereof. (c) On 2nd August, 2019, symbolic possession of subject property was taken by Respondent No. 2 u/s. 13(4) of said Act. (d) Valuation report dated 13th August 2019 of one Astute Valuers & Consultants Pvt. Ltd. shows the value of the subject property at Rs. 158 Crores (appx.) and distress value at Rs. 118 Crores (appx.) (e) On 27th August 2019, First Sale Notice issued to Petitioner, Respondent No. 4 and Respondent No. 5 under Rule 8(6) of the said Rules for e-auction of the said property to be held on 9th October 2019 at a reserved price of Rs. 121 Crores. (f) In September 2019, Petitioner filed SA No. 116 of 2019 u/s. 17 of the said Act before DRT-I, Mumbai challenging First Sale Notice. Petitioner also filed IA No. 746 of 2019 for stay of the sale. (g) On 30th September 2019, Assignment Agreement was executed by Respondent No. 2 in favour of Respondent No. 3.in respect of the said loans. (h) On 9th October 2019, e-auction of the subject property pursuant to First Sale Notice failed as no bids were received. (i) On 18th October 2019, order passed by Chief Metropolitan Magistrate, Mumbai permitting Authorized Officer to take over possession of the subject property by allowing application u/s. 14 of the said Act filed by Respondent No. 2 and permitting Authorized Officer to take over possession of the subject property. (j) On 8th November 2019, actual and physical possession of the subject property was taken by the Authorized Officer. (k) In December 2019, Petitioner came to know that Respondent No. 2 has assigned the debts to Respondent No. 3 and filed IA No. 145 of 2020 for impleadment of Respondent No. 3 as a party Respondent to SA No. 116 of 2019. (k) In December 2019, Petitioner came to know that Respondent No. 2 has assigned the debts to Respondent No. 3 and filed IA No. 145 of 2020 for impleadment of Respondent No. 3 as a party Respondent to SA No. 116 of 2019. (l) On 5th December 2019, Second Sale Notice issued to Petitioner, Respondent No. 4 and Respondent No. 5 under Rule 8 (6) of the said Rules for e-auction of the subject property to be held on 30th December 2019 at a reserved price of Rs. 110 Crores. (m) On 30th December 2019, e-auction of subject property pursuant to Second Sale Notice failed as no bids were received. (n) On 10th January 2020, Third Sale Notice issued to Petitioner, Respondent No. 4 & Respondent No. 5 under Rule 8(6) of the said Rules for e-auction of the subject property to be held on 31st January 2020 at a reserved price of Rs. 110 Crores. (o) On 31st January 2020, e-auction of subject property pursuant to Third Sale Notice failed as no bids were received. (p) On 17th February 2020, Fourth Sale Notice issued to Petitioner, Respondent No. 4 & Respondent No. 5 under Rule 8(6) of the said Rules for e-auction of the subject property to be held on 13th March, 2020 at a reserved price of Rs. 82 Crores. (q) In March 2020, Petitioner filed IA No. 146 of 2020 in SA No. 116 of 2019 seeking interim and ad-interim reliefs against the Fourth Sale Notice. (r) On 11th March 2020, since the DRT was not available, Petitioner filed Writ Petition (L) No. 764 of 2020 in this Court claiming relief against the Fourth Sale Notice. (s) On 13th March 2020, e-auction of subject property pursuant to Fourth Sale Notice failed as no bids were received. (t) On 13th March 2020, this Court allowed Petitioner to withdraw the Writ Petition (L) No. 764 of 2020 as e-auction of subject property pursuant to Fourth Sale Notice failed. However, all contentions were kept open. (u) On 13th March 2020, Fifth Sale Notice issued to Petitioner, Respondent No. 4 & Respondent No. 5 under Rule 8(6) of the said Rules for e-auction of the subject property to be held on 31st March, 2020 at a reserved price of Rs. 82 Crores. However, all contentions were kept open. (u) On 13th March 2020, Fifth Sale Notice issued to Petitioner, Respondent No. 4 & Respondent No. 5 under Rule 8(6) of the said Rules for e-auction of the subject property to be held on 31st March, 2020 at a reserved price of Rs. 82 Crores. (v) In March 2020, Petitioner filed IA No. 161 of 2020 in SA No. 116 of 2019 seeking interim and ad-interim reliefs against the Fifth Sale Notice. (w) On 23rd March 2020, National Lockdown was imposed due to COVID-19. (x) 31st March 2020, e-auction of subject property pursuant to Fifth Sale Notice failed due to COVID-19 lockdown as well as non-receipt of bids. (y) On 31st March 2020, IA No. 1616 of 2020 was rendered infructuous due to the failure of the e-auction pursuant to the Fifth Sale Notice. (z) On 15th April 2020, sale notice issued by Respondent No. 3 to Petitioner, Respondent No. 4 and Respondent No. 5 under Rule 8(6) read with Rule 9(1) and proviso thereto of the said Rules for sale of subject property by Private Treaty for a minimum sale price of Rs. 75 Crores. The relevant portion of said notice is reproduced hereinbelow for ready reference. “The Authorised Officer of the Secured Creditor hereby serves on you this notice of sale of 30 days regarding the mortgaged property (ies) being sold by way of private treaty strictly on “as is where is”, “as is what is”, “whatever there is” and “without any recourse” basis for a total recovery of Rs. 116,28,68,770/- (Rupees One Hundred Sixteen Crore Twenty Eight Lakh Sixty Eight Thousand Seven Hundred Seventy Only) pending towards the captioned Loan Accounts by way of outstanding principal, arrears (including accrued late charges) and interest till 11.04.2020 along with applicable future interest in terms of the Loan Agreements and other related loan document(s) w.e.f. 12.04.2020 along with legal expenses and other charges. The minimum Sale Price for the mortgaged Property (ies) will be Rs. 75,00,00,000/- (Rupees Seventy Five Crore Only). The minimum Sale Price for the mortgaged Property (ies) will be Rs. 75,00,00,000/- (Rupees Seventy Five Crore Only). In view of the aforesaid, the Authorised Officer of the Secured Creditor is issuing this notice of sale in conformity with Rule 8(6) read with Rule 9(1) and proviso thereto of the Security Interest (Enforcement) Rules, 2002.” (aa) In April 2020, Petitioner filed IA No. 163 of 2020 in SA No. 116 of 2019 before DRT-I, Mumbai seeking stay on the operation of the Sale Notice dated 15th April 2020. (bb) On 14th May 2020, common order was passed by DRT-I in IA No. 145 of 2020 and IA No. 163 of 2020 in SA No. 116 of 2019 allowing Respondent No. 3 to proceed with the sale of subject property subject to certain conditions mentioned therein including that the sale shall be subject to the result of the SA and buyer be put to notice of the same. IA NO. 145 of 2020 was allowed thereby making Respondent No. 3 a party Respondent to the SA. (cc) On 29th May 2020, order was passed by the High Court refusing to grant any interim relief to the Petitioner. (dd) On 28th August 2020, Consent Terms executed between Respondent No. 3 and Respondent No. 6 for the purpose of Sale of the subject property by way of private treaty for total consideration of Rs. 77 Crores to be paid as provided in the Consent Terms. (ee) On 9th September 2020, Sale Certificate issued by Respondent No. 3 in favour of Respondent No. 6. (ff) On 16th September 2020, Respondent No. 3 intimated Petitioner that the subject property has been sold for Rs. 77 Crores to Respondent No. 6 and possession of the same has been handed over to him on 9th September 2020. (gg) On 5th October 2020, order was passed by the Hon'ble Supreme Court refusing to interfere with the order dated 29th May, 2020 passed by the High Court. (hh) On 14th October 2020, Petitioner by their Advocate's letter replied to Respondent No. 3's letter dated 16th September 2020 and requested to provide details of the sale including list of buyers with whom Respondent No. 3 was negotiating for sale of the property. 9. PLEADINGS: 10. (hh) On 14th October 2020, Petitioner by their Advocate's letter replied to Respondent No. 3's letter dated 16th September 2020 and requested to provide details of the sale including list of buyers with whom Respondent No. 3 was negotiating for sale of the property. 9. PLEADINGS: 10. At the outset, we clarify that we are only referring to the pleadings of the parties from the point of view of prayer clause (a) i.e. with respect to constitutional validity of Rule 8(8) of the said Rules. This Court by order dated 27/10/2020 (passed in LDVCIA No. 1 of 2020 in this Writ Petition) specifically clarified that for other reliefs the Petitioner to approach before the Debt Recovery Tribunal and this Writ Petition is restricted to prayer regarding the constitutional validity of Rule 8(8). We also clarify that as the challenge is to the constitutional validity of Rule 8(8), pleadings and submissions are overlapping to certain extent. We have already set out the factual background hereinabove. Therefore we are making reference to the pleadings to the extent which is necessary. 11. WRIT PETITION. (a) The essential pleadings in this behalf are to be found in various paragraphs including paragraphs 6, 6.11, 6.29, 6.37 of the Writ Petition. The said paragraphs are reproduced hereinbelow for ready reference: “6. In the present case, in fact the Rule is being used to exploit the vulnerable condition of the Petitioner herein. In the present case, the subject property which was valued at Rs. 300 Crores at the time of taking loan and which was valued by the Respondent No. 2 itself in or around August 2019 at Rs. 158 Crores is being proposed and intended to be sold by the Respondent No. 3 vide the Impugned Sale Notice dated 15th April 2020 at Rs. 75 Crores under a private treaty and that too during the period of Nationwide Lockdown when the Petitioner would be unable to avail of his right to redeem the subject property. This entire exercise is a blatant misuse of the provisions of the SARFAESI Act and is contrary to the basic principles of natural justice and fair play, and therefore the Petitioner has approached this Hon'ble Court to not primarily challenge the constitutional validity of the Impugned Notification and also the impugned Sale Notice and the exercise of sale which is being done by virtue thereof at such a devalued valuation.” “6.11. In furtherance thereof, the Respondent No. 3 from time to time issued Sale Notices purportedly under Rule 8 (6) of the Security Interest (Enforcement) Rules, 2002 dated 5th December 2019, 10th January 2020 and 17th February 2020 respectively, scheduling the sale of the subject property by way of e-auction. It is pertinent to note that the Respondent No. 3 progressively reduced the Reserve Price of the subject property from time to time with each auction. The summary of the Sale Notices issued as aforesaid is set out hereinbelow: Date of Notice Notice issued by Date of Auction Reserve Price (Rs.) % reduction from 1st Notice (approx.) 27.08.2019 Respondent No. 2 09.10.2019 121,00,00,000/- — 05.12.2019 Respondent No. 3 30.12.2019 110,00,00,000/- - (10%) 10.01.2020 Respondent No. 3 31.01.2020 110,00,00,000/- - (10%) 17.02.2020 Respondent No. 3 13.03.2020 82,00,00,000/- - (32%) 13.03.2020 Respondent No. 3 31.03.2020 82,00,00,000/- - (32%) 15.04.2020 Respondent No. 3 Unspecified (30 days from date of notice) 75,00,00,000/- - (38%) “6.29. In this manner it is evident that, the Respondent Nos, 2 and 3 have connived at progressively devaluing the subject property for reasons best known to them in a completely arbitrary and unjustified manner, as shown in the table hereinabove.” “6.37. In the meanwhile, pending hearing of the SLP an email dated 15th September, 2020 was issued by one Mr. John Abraham which was addressed to Respondent No. 3 and 4 and copy of which was also marked to the Petitioner, which highlighted that the Respondent No. 1 was negotiating with him to sell the said Subject Property and at one point of time Mr. Abraham was willing to offer a price to the tune of Rs. 84 Crores. He has in his email pointed out the unprofessional approach of the Respondent Nos. 2 and 3 to mischievously dispose of this asset.” 12. Grounds raised in the Writ Petition: The Petitioner in this behalf have raised grounds A, B, C, D, BBB, CCC, DDD, FFF and HHH. The said grounds are set out below for ready reference. “A. THAT the Impugned Notification insofar as it amends Rule 8 (8) of the Security Interest (Enforcement) Rules, 2002 by taking away the requirement of consent of borrower for the sale of secured assets by way of private treaty is arbitrary, unreasonable and violative of Article 14 of the Constitution. The said grounds are set out below for ready reference. “A. THAT the Impugned Notification insofar as it amends Rule 8 (8) of the Security Interest (Enforcement) Rules, 2002 by taking away the requirement of consent of borrower for the sale of secured assets by way of private treaty is arbitrary, unreasonable and violative of Article 14 of the Constitution. B. THAT even otherwise, the Impugned Notification is violative of of the law laid down by the Supreme Court in J. Rajiv Subramaniyan v. Pandiyas [ (2014) 5 SCC 651 ] that the sale of secured assets by way of private treaty may not be conducted except pursuant to a written agreement between the secured creditor and the borrower. C. THAT even otherwise, the Impugned Notification is violative of Article 300A of the Constitution insofar as it deprives the Petitioner of his valuable right to property without the authority of law. D. THAT even otherwise, the Impugned Notification, being in the nature of subordinate legislation, is arbitrary, unreasonable and ultra vires Section 13 of the SARFAESI Act itself. BBB. That the amendment to the Rule, is contrary to law laid down by Hon'ble Supreme Court and it is made to circumvent and dilute the law laid down by Hon'ble Apex Court. This itself makes amendment to the Rule unconstitutional, illegal and arbitrary; CCC. That the amendment to the Rule is excessive delegation in the hands of Bank and NBFC's. The authority to sale under private treaty, defeats the entire foundation of basic rule of maximization of value; DDD. That non-receipt of bids during stressed marked condition, can never be the basis of conducting the sale under a private treaty; FFF. That this amendment to the Rule is open for blatant misuse of power and authority and will discourage public auction which is otherwise proper and transparent; HHH. That the Rule travels much beyond the scope of the legislation which was to give authority to Bank to sale property without any intervention of the Court/Tribunal. The basis of the Act and initial Rules which were incorporated provided that as far as sale by Private Treaty were concerned, were to be conducted with the consent of the borrower, to avoid any illegality as well as irregularity. The basis of the Act and initial Rules which were incorporated provided that as far as sale by Private Treaty were concerned, were to be conducted with the consent of the borrower, to avoid any illegality as well as irregularity. However, by way of amendment it is now sought to be diluted to keep it exclusively in the hands of Asset Reconstruction Companies, with no mechanism to monitor or supervise the same. The intent of the Act was to provide transparent mechanism to conduct process of sale, which is now sought to be diluted;” 13. AFFIDAVIT-IN-REPLY OF RESPONDENT NOS. 2 AND 3 DATED 5TH DECEMBER, 2020. To answer the contention of the Petitioner that the impugned amendment is violative of the law laid down by the Supreme Court, reliance is placed on the judgments of the Supreme Court and contended that it is open to the legislature to remove the defect or to amend the definition or any other provision of the Act. On the basis of the Supreme Court judgment, it is contended that secured asset will vest in the secured creditor. The relevant pleadings are to be found in paragraphs 6(f), 7, 19, 20, 28 and 29:— “6(f) The plea of the Petitioner that the borrower's consent would be required for sale by private treaty, would set at naught the entire spirit of the act. It would keep the borrower in the driving seat, aid the borrower in calling the shots and delaying the sale of the secured assets. The statutory right granted to secured creditor to realise the security by private treaty would turn turtle. 7. Due to a lack of responses, the reserve price was gradually reduced to Rs. 75 Crore vide Sale Notice dated 15.04.2020. Date of Notice Date of Auction Reserve Price (In Rs.) Outcome of sale notice 27.08.2019 (First Sale Notice) 09.10.2019 121 Cr. Auction failed 05.12.2019 (Second Sale Notice) 30.12.2019 110 Cr. Auction failed 10.01.2020 (Third Sale Notice) 31.01.2020 110 Cr. Auction failed 17.02.2020 (Fourth Sale Notice) 13.03.2020 82 Cr. Auction failed 13.03.2020 (Fifth Sale Notice) 31.03.2020 82 Cr. Auction failed 15.04.2020 (Sixth Sale Notice) Thirty days after receipt of sale notice. 75 Cr. Sale Successful for Rs. 77 Cr. “19. Auction failed 05.12.2019 (Second Sale Notice) 30.12.2019 110 Cr. Auction failed 10.01.2020 (Third Sale Notice) 31.01.2020 110 Cr. Auction failed 17.02.2020 (Fourth Sale Notice) 13.03.2020 82 Cr. Auction failed 13.03.2020 (Fifth Sale Notice) 31.03.2020 82 Cr. Auction failed 15.04.2020 (Sixth Sale Notice) Thirty days after receipt of sale notice. 75 Cr. Sale Successful for Rs. 77 Cr. “19. I say that the conduct of the Petitioner is mala fide, which disentitles him for any relief, which is evident from the fact that Hon'ble DRT, Mumbai had given the Petitioner an opportunity to regularize the accounts by paying overdue amounts in the accounts as on 31.03.2020, Petitioner was also permitted to introduce the buyer to purchase the property above the reserve price at Rs. 75 Crores. However, the Petitioner neither regularised the account nor brought the purchaser for an amount exceeding Rs. 75 Crores and by way of the present amendment is trying to rake up new grounds to challenge the sale.” “20. I say that the sale by private treaty is conducted in accordance with the law. The Petitioner has already invoked the jurisdiction of the Hon'ble Debt Recovery Tribunal. The Tribunal is seized of the proceedings and is bound to decide pending Securitisation Application in accordance with the law. The Respondent No. 3 has issued Sale Certificate dated 09.09.2020 as a matter of fact and inference sought to be drawn from the notice dated 09.09.2020 is illusory and motivated just to cause prejudice against the Respondents. The reference of the communications of three parties [Mr. John Abraham, Mr. Gaurav Ghai and Mr. Deven Mehta] after completion of sale is irrelevant for the adjudication of issue before this Hon'ble Court. Mr. John Abraham has not participated in the auction fixed on 13.03.2020 and 31.03.2020. The offer from the other two parties was lower than the price at which the subject property was sold.” “28. It was never the intention of the legislature that the sale by private treaty should be conducted as per the agreement between the borrower and secured creditor. The notice under Rule 8 (6) protects interests of the borrower whereby an opportunity is given to the borrower to redeem the property by paying entire dues of the secured creditor.” “29. I deny that Rule is being exploited or the subject property is worth Rs. The notice under Rule 8 (6) protects interests of the borrower whereby an opportunity is given to the borrower to redeem the property by paying entire dues of the secured creditor.” “29. I deny that Rule is being exploited or the subject property is worth Rs. 300 crores or there is any illegality or infirmity in fixing reserve price at Rs. 75 crores as alleged. I say that the Petitioner has neither made any attempt to redeem the property for more than 13 months nor has brought any buyer for the purchase of the property for the alleged amount.” 14. Affidavit-in-reply on behalf of Respondent No. 1 - Union of India dated 27th January 2021: The following contentions are inter alia raised by the Union of India: (a) The constitutional validity of the provisions of SARFAESI Act, 2002 and the Security Interest (Enforcement) Rules, 2002 has already been upheld by the Hon'ble Supreme Court in the case of Mardia Chemicals v. Union of India, 2004 (4) SCC. (b) Reliance is placed on Statement of Objects and Reasons of the said Act. The following contention is raised in paragraph 9. (i) It is contended that these Rules have been framed by the Central Government in exercise of powers conferred by the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, which empowers the Central Government to make rules, in particular and without prejudice to the generality of the forgoing power in respect of the manner in which the rights of a secured creditor may be exercised by one or more of his officers under sub Section (12) of Section 13. (ii) Rule 8(8) speaks about the terms to be settled at the time of sale by private treaty, and sale by private treaty has been prescribed as one of the modes under Rule 8(5)(d) of the Security Interest (Enforcement) Rules, and constitutional validity of Rule 8(5)(d) has already been upheld by this Hon'ble Court itself in the matter of Ms. (ii) Rule 8(8) speaks about the terms to be settled at the time of sale by private treaty, and sale by private treaty has been prescribed as one of the modes under Rule 8(5)(d) of the Security Interest (Enforcement) Rules, and constitutional validity of Rule 8(5)(d) has already been upheld by this Hon'ble Court itself in the matter of Ms. Sea Poly Plast India Pvt. Ltd. v. Union of India vide judgment dated 14.11.2011 wherein referring the judgment of the Division Bench of the Hon'ble Gujarat High Court, has held, that, Just because the borrower is excluded from Rule 8(5) of the Rules of 2002 or has no voice at the time when the valuation is fixed and the reserve price is also fixed, by itself will not render Rule 8(5) unconstitutional. 15. SUBMISSIONS: We have heard Mr. Nitin Thakkar, learned Senior Counsel appearing for the Petitioner, Mr. Anil C. Singh, learned Additional Solicitor General for Respondent No. 1, Mr. Pravin Samdhani, learned Senior Counsel for Respondent Nos. 2 and 3 and Mr. Milind Sathe, learned Senior Counsel for Respondent No. 6 from time to time. The submissions advanced by them briefly are recorded hereinbelow. 16. Submissions of Mr. Thakkar, learned senior counsel on behalf of Petitioner:— 17. Mr. Thakkar, learned Senior Counsel submitted that the said amended Rule 8(8) gives unfettered and arbitrary power to the secured creditor/authorised officer to sale the property of the borrower/owner at price and terms which are agreed between the secured creditor and buyer. He submitted that absence of arbitrary power, is an essential element of the Rule of law. He submitted that even if there is discretion, the sphere of the same should be defined and the discretion must be within clearly defined limits. He relied on the judgment of the Supreme Court in the matter between S.G. Jaisinghani v. Union of India, (1967) 2 SCR 703 , and particularly on paragraph 14 of the same to substantiate said contention. 18. He submitted that by the impugned amendment an unrestricted power is given to the authorised officers/secured creditor and therefore even if he acts arbitrarily or with improper motives, there is no check and therefore it is manifestly arbitrary, unreasonable and violative of the constitutional rights of the Petitioner. 18. He submitted that by the impugned amendment an unrestricted power is given to the authorised officers/secured creditor and therefore even if he acts arbitrarily or with improper motives, there is no check and therefore it is manifestly arbitrary, unreasonable and violative of the constitutional rights of the Petitioner. He relied on the judgment of the Supreme Court in the matter of Dwarka Prasad Laxmi Narain v. Uttar Pradesh, AIR 1954 SC 224 , and particularly paragraphs 5, 7 and 8 of the same. 19. He relied on the judgment of the Supreme Court in the matter of State of Tamil Nadu v. P. Krishnamurthy, (2006) 4 SCC 517 , particularly paragraph 15 of the same to point out the grounds available to challenge the vires of the subordinate legislation. 20. He submitted that the amended Rule destroys the basic objective of the said Act. He submitted that the Scheme of the said Act more particularly Section 13(8) of the said Act is very clear and accordingly the sale of the secured assets if required to be conducted is to be assets if conducted be conducted in fair and transparent manner to achieve maximum value of secured assets and to preserve right of redemption under Section 13(8) and therefore the impugned amended provision is violative of Articles 14 and 19 of the Constitution of India. 21. He relied on the judgment of the Supreme Court in the matter of State of Mysore v. S.R. Jayaram, (1968) 1 SCR 349 , particularly paragraph 15 of the same on arbitrary power. He submitted that the power to conduct sale by private treaty can be exercised at any time i.e. even at first instance. Thus, the sale by private treaty can be conducted at any price, and on the terms and conditions which the secured creditor and the proposed purchaser agrees. He submitted that thus arbitrary powers are conferred on the secured creditor/authorised officer. He submitted that the borrower who has very important stake is excluded. 22. He submitted that the Supreme Court in Mathew Varghese (supra) and General Manager Sri. Siddheshwara Co.-operative Bank Ltd. (supra) has interpreted Rule 8(8), as existing before amendment, particularly the word “Parties” as appearing in the amended Rule 8(8) to include “borrower”. He submitted that the borrower who has very important stake is excluded. 22. He submitted that the Supreme Court in Mathew Varghese (supra) and General Manager Sri. Siddheshwara Co.-operative Bank Ltd. (supra) has interpreted Rule 8(8), as existing before amendment, particularly the word “Parties” as appearing in the amended Rule 8(8) to include “borrower”. He submitted that said interpretation is constitutionally valid as by said interpretation, constitutional right to property as guaranteed by Article 300(A) of the Constitution of India is protected. He submitted that by the impugned amendment, said right to property is taken away in arbitrary and illegal manner without any due process of law or without transparent process. The justification which is sought to be given for the impugned amendment to avoid mischief of borrower as the borrower would never agree to sale by private treaty. He submitted that this justification is contrary to the judgment of the Supreme Court, which has held that the word “Parties” includes borrower. 23. He relied on the judgment of Mathew Varghese v. M. Amritha Kumar, (2014) 5 SCC 610 , and particularly paragraphs 29.4, 30, 31 and 53 of the same. He submitted that no sale can be postponed beyond one calendar month. He submitted that by the impugned amendment, terms can be settled between the secured creditor and the proposed purchaser in writing and by such terms, they can agree to conduct sale even after expiry of said one month and therefore the impugned amendment is contrary to the judgment in case of Mathew Varghese (supra). 24. Mr. Thakkar, learned Senior Counsel appearing for the for the Petitioner also raised following contentions:— (a) As per unamended Rules consent of the borrower/mortgagor was mandatory. The Supreme Court in two judgments, viz Mathew Varghese (supra) and Sri. Siddheshwara Co-op Bank Ltd. (supra) held that the consent of the borrower is required as well as terms need to be agreed in writing. (b) Sale was conducted on 9th September 2020, based on sale notice dated 15th April 2020 by way of Private Treaty. Thus, sale was conducted almost after five months of the sale notice which is impermissible. He submitted that sale was conducted at the price of Rs. 77 crores. In the first public auction reserve price was fixed at Rs. 121 crores and in the last public auction the reserve price was fixed at Rs. 82 crores. Thus, sale was conducted almost after five months of the sale notice which is impermissible. He submitted that sale was conducted at the price of Rs. 77 crores. In the first public auction reserve price was fixed at Rs. 121 crores and in the last public auction the reserve price was fixed at Rs. 82 crores. (c) In view of the amended Rules the sale can be conducted at any time without their being end date of sale and terms are not required to be disclosed or agreed by the borrower in view of the amended Rule. He therefore submitted that the amended Rule is arbitrary and gives untrammeled power to the secured creditor to conduct the sale. (d) The amended Rule removes the concept of transparency contemplated under the Act and Rules and infringe Article 14. (e) The amended Rule is contrary to other provisions of the Act and Rules, more particularly Rule 8(7) and proviso to Rule 9(1). (f) The Petitioner is only challenging mechanism provided for conducting the sale by private treaty and not the authority or legislative competence to permit sale by private treaty. (g) The amended Rule is inconsistent to Rule 13(9) which contemplates notice before any mode of sale. (h) Authorised officer is mandated to serve to the borrower a notice of 30 days for sale of the immovable secured assets under Sub-rule (6) of Rule. (i) The requirement of compliance of Sub-rule (7) of Rule 8 regarding every notice of sale is mandatory and applicable to all modes of sale including sale by private treaty. (j) The said Sub-rule (7) contemplates a detailed notice giving relevant particulars as set out in said Sub-rule and that such notice shall be affixed on the conspicuous part of the immovable property and such notice should be uploaded on the website of the secured creditor. (k) The submission that Rule 8(7) is to be applied only in case of public auction or public tender is not correct and the said procedure is required to be followed in all types of sales including by private treaty. (l) As a result of impugned amendment the borrower has been essentially excluded when the sale of property by private treaty is being conducted by the authorised officer. (m) The amended Rule gives arbitrary and untrammeled powers to secured creditors to sell the property. (l) As a result of impugned amendment the borrower has been essentially excluded when the sale of property by private treaty is being conducted by the authorised officer. (m) The amended Rule gives arbitrary and untrammeled powers to secured creditors to sell the property. (n) He submitted that in Mathew Varghese (supra) it has been specifically held that the sale expires after lapse of one calendar month and if it is held that there is no end date of sale then it will make the provision arbitrary and illegal. (o) He then submitted that to hold sale by Private Treaty as constitutional certain minimum requirements are to be complied with, namely, obtaining valuation, 30 days sale notice is required to be given to the borrower, compliance of Rule 8(6) and Rule 8(7), date of the sale should be provided in the notice of sale [Rule 8(7)(d)] as laid down by Mathew Varghese (supra). He submitted that no sale shall take place before expiry of the period provided under the notice i.e. 30 days [Rule 9(1)] and in the event the sale (by any method) does not take place on the scheduled date, the sale ought to be deemed as failed and the sale notice ought to be deemed as lapsed. 25. Submissions of Mr. Anil Singh, learned Additional Solicitor General, on behalf of Respondent No. 1-Union of India:— 26. Mr. Anil Singh, learned Additional Solicitor General submitted that there are no specific grounds raised in the petition and no details are given regarding said grounds to challenge the constitutional validity of said amended rule. He pointed out the ground Nos. (A), (B), (C), (D), (BBB), (CCC), (FFF) and (HHH) and submitted that these are only vague grounds and no specific grounds are raised and no details are given. To substantiate this contention, he relied on the judgment of the Supreme Court in the matter of V.S. Rice & Oil Mills v. State of Andhra Pradesh, (1964) 7 SCR 456 , and particularly paragraph 22 of the same. He also relied in this behalf on the judgment of the Supreme Court in the matter of Amrit Banaspati Co. Ltd. v. Union of India, (1995) 3 SCC 335 . and particularly paragraphs 6. 27. He also relied in this behalf on the judgment of the Supreme Court in the matter of Amrit Banaspati Co. Ltd. v. Union of India, (1995) 3 SCC 335 . and particularly paragraphs 6. 27. The learned ASG submitted that the person challenging constitutional validity of a particular provision has to satisfy that either the enactment lacks legislative competence, the same is beyond the scope of the existing Act or the same is manifestly arbitrary. He submitted that the Petitioner has failed to establish any of the grounds. To substantiate this contention he relied on the judgment reported in the case of State of Madhya Pradesh v. Rakesh Kohli, (2012) 6 SCC 312 , and more particularly on paragraph 17 of the same. He also relied on the judgment in the matter of Indian Express Newspapers (Bombay) Private Limited v. Union of India, (1985) 1 SCC 641 , more particularly on paragraph 75 of the same. 28. The learned ASG pointed out various provisions of said Act including Section 13, Section 38 and Rule 8 of the said Rules. He particularly relied on Section 13(3), section 13(4), section 13(8), Section 17 and Rule 8(6). He submitted that the scheme of the said Act provides sufficient safeguards to ensure that rights of the borrower are not affected. 29. He relied on the judgment in the matter of Sea Poly Plast India Private Limited v. Union of India, (2012) 2 Mah LJ to substantiate that sufficient safeguards are provided in the scheme of the Act and Rules. He also relied on the judgment in the case Mathew Varghese (supra) and particularly on paragraph nos 29, 29.4, 31 and 53 and on the judgment in the case of J. Rajiv Subramaniyam (supra), particularly on paragraphs 12, 16 and 17 to substantiate the same. 30. He relied on the judgment in the case of Consumer Action Group v. State of Tamil Nadu, (2000) 7 SCC 425 , and particularly on paragraph 18 to point out the sphere of delegated legislation. He also relied on the judgment of Co-ordinate Bench of this Court, in the matter of Film and TV Producers Guild of India v. Union of India, AIR 2021 OnLine Bom 3090 and more particularly, on paragraph 73.4 regarding same aspect. 31. He also relied on the judgment of Co-ordinate Bench of this Court, in the matter of Film and TV Producers Guild of India v. Union of India, AIR 2021 OnLine Bom 3090 and more particularly, on paragraph 73.4 regarding same aspect. 31. He relied on paragraph 36 of the said judgment in the matter of Film and TV Producers Guild of India (supra) to substantiate his submission that legislation may not his submission that legislation may not be invalidated merely on account of a possibility of its possibility of its abuse. 32. Submissions of Mr. Samdhani, learned senior counsel appearing on behalf of Respondent Nos. 2 and 3:— 33. Mr. Samdhani, learned Senior Counsel appearing on behalf of Respondent Nos. 2 and 3 submitted that the Petitioners restricted their challenge only to the ground of arbitrariness and that there are no guidelines and or checks on exercise of power of sale by private treaty. He submitted that no details are given regarding the same. He submitted that there cannot be any challenge under Article 14 towards delegated piece of legislation in the absence of detailed grounds with material particulars. He submitted that there is no challenge to the amended rule on the ground of legislative competence and there is no ground that any of the fundamental rights of the Petitioner under Chapter III of the Constitution of India is violated. The ground argued is only arbitrariness under Article 14, however, the same cannot be considered in the absence of any particulars and without providing any basis. He relied on the judgment in the matter between the State of Jammu & Kashmir v. Shri Trilok Nath Khosa, (1974) 1 SCC 19 and more particularly on paragraph 18 of the same to paragraph 18 the same to substantiate the ground that there are no sufficient pleadings. 34. He submitted that there is presumption in favour of constitutionality. He relied on the judgment in Goa Glass Fibre Limited v. State of Goa, (2010) 6 SCC 499 and more particularly on paragraph 15 of the same and submitted that a statute can be invalidated or held unconstitutional on limited grounds viz. on the ground of the incompetence of the legislature which enacts it legislature which enacts it and on the ground that it breaches or violates any of the fundamental rights or other constitutional rights and on no other ground. 35. on the ground of the incompetence of the legislature which enacts it legislature which enacts it and on the ground that it breaches or violates any of the fundamental rights or other constitutional rights and on no other ground. 35. He submitted that the said Act and Rules are in the nature of economic policy and involves regulation of economic activities. He submitted that the impugned amendment was necessary to eradicate mischief and find solution to the practical problem and therefore in such matters, the Court should not interfere. To substantiate this submission, he relied on judgment in Bhavesh D. Parish v. Union of India, (2000) 5 SCC 471 and more particularly on paragraph 23 of the same. 36. He submitted that provisions of the Act and the Rules both are required to be seen textually and contextually. If so analyzed textually and contextually, the text becomes clear and the purpose and reason behind provision of the Act and Rules and the amendment to the Rules fall in place and the challenge become unsustainable. He relied on judgment in Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd., (1987) 1 SCC 424 particularly on paragraph 33 of the same to substantiate said contention. He submitted that the purpose of said Act and Rules is speedy recovery of debt due to banks and financial institutions and therefore the said amendment is in furtherance of the said object. He submitted that right to sell the secured assets by private treaty is included in power of sale under Section 13(4) of the said Act and therefore the amended Rule cannot be held to be outside the scope of the said Act. 37. He submitted that possibility of abuse and misuse of power does not invalidate the Act. He relied on the judgment in A. Thangal Kunju Musaliar v. Venkatchalam Potti, Authorised Official and Income Tax Officer, (1955) 2 SCR 1196 , more particularly on paragraph 68 of the same. He also relied on judgment in the matter of Naraindas Indurkhya v. State of Madhya Pradesh, (1974) 4 SCC 788 more particularly on paragraphs 21 to 23 of the same to substantiate the said contention and that the legislature should provide guidelines to perform discretionary functions by the executive. He submitted that there are sufficient safeguards and checks and balance under the provisions of the said Act and said Rules. He submitted that there are sufficient safeguards and checks and balance under the provisions of the said Act and said Rules. He submitted that apart from procedural and substantive safeguards as provided in Section 13 and Rule 8, a complete safeguard is available under Section 17 of the said Act in the form of statutory appeal available to the borrower. 38. He submitted that the impugned amendment to the Rule was to remove the basis of the observations of Hon'ble Supreme Court in Mathew Varghese (supra) and in General Manager Sri. Siddheshwara Co.-operative Bank Ltd. (supra) and not to overturn the said decisions. He submitted that this legislative exercise is permissible and within the legislative competence. To substantiate this contention he relied on judgment in Union of India v. Exide Industries Limited, (2020) 5 SCC 274 , particularly on paragraph Nos. 15, 16, 17, 26, 47, 48. He also relied on the judgment in State of T.N. v. Arooran Sugars Ltd., (1997) 1 SCC 326 , more particularly on paragraph 16 of the same to substantiate said contention. 39. He relied on judgment in the matter between Transcore v. Union of India, (2008) 1 SCC 125 . He relied on paragraph 26 of the said judgment. He submitted that in the said judgment it has been held that under Section 13 (6) of the said Act, the secured asset will vest in the secured creditor free of all encumbrances and therefore, amended Rule 8(8) is in consonance with the fiction provided in Section 13(6) of the said Act. 40. Submissions of Dr. Sathe, learned senior counsel appearing on behalf of Respondent No. 6:— 41. Dr. Sathe, learned Senior Counsel appearing for the Respondent No. 6 pointed out various provisions of the Act and Rules. He pointed out section 13 and various steps to be taken for enforcement of the security interest. He pointed out 2016 amendment made in subsection 8 of section 13. He also pointed out Rule 6 and 8 and various steps involved in procedure for sale of immovable secured assets contemplated under the Rules. He submitted that scheme of section 13 of the Act read with Rules particularly Rule 8 and 9 shows that precautions are taken to protect the interest of borrower as well as to realise maximum price from the sale of secured assets. He submitted that scheme of section 13 of the Act read with Rules particularly Rule 8 and 9 shows that precautions are taken to protect the interest of borrower as well as to realise maximum price from the sale of secured assets. He submitted that requirements of Rule 8 and 9 are mandatorily to be complied with in conducting sale and, therefore, the same is complete protection of interest of the borrower. He submitted that sufficient safeguards are provided under the scheme of section 13 read with Rule 8 and 9. He submitted that measures taken by the secured creditors/authorised officers can be challenged by the aggrieved persons by filing application before the Debts Recovery Tribunal under section 17 of the said Act. He submitted that amended Rule 8(8) is neither manifestly arbitrary nor it confers upon the secured creditor or authorised officer any unguided discretion. 42. He submitted that section 13(8) was amended with effect from 1st September 2016 which inter alia provides the manner of sale by private treaty. Rule 8(8) was amended with effect from 4th November 2016, which is in conformity with amended section 13(8). Therefore, no consent of borrower is required when the sale is by way of private treaty or by way of inviting quotations from persons dealing with the secured assets. 43. He relied on the judgment of the Supreme Court reported in Swiss Ribbons Pvt. Ltd. v. Union of India, (2019) 4 SCC 17 to contend that the said Act and Rules are economic legislation and, therefore, the Parliament/Executive, who make the law/delegated legislation are entitled to experiment and that is how the economic legislation evolve and the Courts ought not to interfere with this process since these are the matters of economic experiment. 44. He relied on the judgment of the Supreme Court reported in State of Tamil Nadu (supra) and the judgment of this Court in the matter between The Film and Television Producers Guild of India Ltd. (supra) to support the contention that the parameters for considering the validity of delegated legislation are delineated by the Supreme Court and this Court and none of the parameters for striking down subordinate legislation has been satisfied by the Petitioner in the present case in challenging amended Rule 8(8). 45. Submissions of Mr. Thakkar, learned senior counsel on behalf of the Petitioner in Rejoinder:— Mr. 45. Submissions of Mr. Thakkar, learned senior counsel on behalf of the Petitioner in Rejoinder:— Mr. Thakkar, the learned Senior Counsel for the Petitioner in rejoinder submitted that no material has been brought on record by Respondent No. 1 - Union of India to justify the amendment. He submitted that contrary stands are taken by the learned counsel appearing for Respondent Nos. 2 and 3 and learned counsel appearing for Respondent No. 6. Respondent Nos. 2 and 3 took stand that notice contemplated under Rule 8(7) is not applicable to sale by private treaty whereas the Respondent No. 6 has contended that notice under said Rule is required to be issued with necessary changes. He reiterated that by the impugned amended rule arbitrary power has been vested with the secured creditor. 46. Before considering the rival submissions, we clarify that number of authorities were cited before us, however we will make reference to those authorities which are necessary to decide the various issues raised before us. 47. Since the validity of Rule 8(8) of the said Rules is challenged which is undoubtedly a subordinate legislation, it is necessary to set out well established parameters of challenge to the subordinate legislation. 48. Grounds to challenge the delegated legislation/subordinate legislation 49. Mr. Thakkar, learned Senior Counsel appearing for the Petitioner and Dr. Sathe, learned Senior Counsel appearing for the Respondent No. 6 relied on the judgments of the Supreme Court in the matter of State of Tamil Nadu (supra). Mr. Anil Singh, the learned ASG has relied on paragraph 75 of the judgment in the case of Indian Express News Papers (Bombay) Pvt. Ltd. (supra). The said paragraph 75 is quoted with approval in State of Tamil Nadu (supra). Paragraph 15 to 20 of the State of Tamil Nadu (supra) are relevant and reproduced hereinbelow for read reference: “15. There is a presumption in favour of constitutionality or validity of a sub-ordinate Legislation and the burden is upon him who attacks it to show that it is invalid. It is also well recognized that a sub-ordinate legislation can be challenged under any of the following grounds:— a) Lack of legislative competence to make the sub-ordinate legislation. b) Violation of Fundamental Rights guaranteed under the Constitution of India. c) Violation of any provision of the Constitution of India. It is also well recognized that a sub-ordinate legislation can be challenged under any of the following grounds:— a) Lack of legislative competence to make the sub-ordinate legislation. b) Violation of Fundamental Rights guaranteed under the Constitution of India. c) Violation of any provision of the Constitution of India. d) Failure to conform to the Statute under which it is made or exceeding the limits of authority conferred by the enabling Act. e) Repugnancy to the laws of the land, that is, any enactment. f) Manifest arbitrariness/unreasonableness (to an extent where court might well say that Legislature never intended to give authority to make such Rules). 16. The court considering the validity of a sub-ordinate Legislation, will have to consider the nature, object and scheme of the enabling Act, and also the area over which power has been delegated under the Act and then decide whether the subordinate Legislation conforms to the parent Statute. Where a Rule is directly inconsistent with a mandatory provision of the Statute, then, of course, the task of the court is simple and easy. But where the contention is that the inconsistency or non-conformity of the Rule is not with reference to any specific provision of the enabling Act, but with the object and scheme of the Parent Act, the court should proceed with caution before declaring invalidity. 17. In Indian Express Newspapers (Bombay Pvt. Ltd. v. Union of India [ (1985) 1 SCC 641 ], this Court referred to several grounds on which a subordinate legislation can be challenged as follows: “75. A piece of subordinate legislation does not carry the same degree of immunity which is enjoyed by a statute passed by a competent legislature. Subordinate legislation may be questioned on any of the grounds on which plenary legislation is questioned. In addition it may also be questioned on the ground that it does not conform to the statute under which it is made. It may further be questioned on the ground that it is contrary to some other statute. That is because subordinate legislation must yield to plenary legislation. It may also be questioned on the ground that it is unreasonable, unreasonable not in the sense of not being reasonable, but in the sense that it is manifestly arbitrary.” 18. It may further be questioned on the ground that it is contrary to some other statute. That is because subordinate legislation must yield to plenary legislation. It may also be questioned on the ground that it is unreasonable, unreasonable not in the sense of not being reasonable, but in the sense that it is manifestly arbitrary.” 18. In Supreme Court Employees Welfare Association v. Union of India [ (1989) 4 SCC 187 ], this Court held that the validity of a subordinate legislation is open to question if it is ultra vires the Constitution or the governing Act or repugnant to the general principles of the laws of the land or is so arbitrary or unreasonable that no fair-minded authority could ever have made it. It was further held that Rules are liable to be declared invalid if they are manifestly unjust or oppressive or outrageous or directed to be unauthorized and/or violative of general principles of law of the land or so vague that it cannot be predicted with certainty as to what it prohibited or so unreasonable that they cannot be attributed to the power delegated or otherwise discloses bad faith. 19. In Shri Sitaram Sugar Co. Ltd. v. Union of India [ (1990) 3 SCC 223 ], a Constitution Bench of this Court reiterated: “Power delegated by statute is limited by its terms and subordinate to its objects. The delegate must act in good faith, reasonably, intra vires the power granted, and on relevant consideration of material facts. All his decisions, whether characterized as legislative or administrative or quasi-judicial, must be in harmony with the Constitution and other laws of the land. They must be “reasonably related to the purposes of the enabling legislation”. See Leila Mourning v. Family Publications Service [411 US 356 (1973)]. If they are manifestly unjust or oppressive or outrageous or directed to an unauthorized end or do not tend in some degree to the accomplishment of the objects of delegation, court might well say, “Parliament never intended to give authority to make such rules; they are unreasonable and ultra vires“ : per Lord Russel of Killowen, C.J. in Kruse v. Johnson, [1898] 2 Q.B. 91.” 20. In St. Johns Teachers Training Institute v. Regional Director, NCTE [ (2003) 3 SCC 321 ], this Court explained the scope and purpose of delegated legislation thus: “10. In St. Johns Teachers Training Institute v. Regional Director, NCTE [ (2003) 3 SCC 321 ], this Court explained the scope and purpose of delegated legislation thus: “10. A regulation is a rule or order prescribed by a superior for the management of some business and implies a rule for general course of action. Rules and regulations are all comprised in delegated legislations. The power to make subordinate legislation is derived from the enabling Act and it is fundamental that the delegate on whom such a power is conferred has to act within the limits of authority conferred by the Act. Rules cannot be made to supplant the provisions of the enabling Act but to supplement it. What is permitted is the delegation of ancillary or subordinate legislative functions, or, what is fictionally called, a power to fill up details. The legislature may, after laying down the legislative policy confer discretion on an administrative agency as to the execution of the policy and leave it to the agency to work out the details within the framework of policy. The need for delegated legislation is that they are framed with care and minuteness when the statutory authority making the rule, after coming into force of the Act, is in a better position to adapt the Act to special circumstances. Delegated legislation permits utilisation of experience and consultation with interests affected by the practical operation of statutes. Rules and regulations made by reason of the specific power conferred by the statutes to make rules and regulations establish the pattern of conduct to be followed. Regulations are in aid of enforcement of the provisions of the statute. The process of legislation by departmental regulations saves time and is intended to deal with local variations and the power to legislate by statutory instrument in the form of rules and regulations is conferred by Parliament. The main justification for delegated legislation is that the legislature being overburdened and the needs of the modern-day society being complex, it cannot possibly foresee every administrative difficulty that may arise after the statute has begun to operate. Delegated legislation fills those needs. The regulations made under power conferred by the statute are supporting legislation and have the force and effect, if validly made, as an Act passed by the competent legislature. (See Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi.)” (Emphasis supplied) 50. Delegated legislation fills those needs. The regulations made under power conferred by the statute are supporting legislation and have the force and effect, if validly made, as an Act passed by the competent legislature. (See Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi.)” (Emphasis supplied) 50. A co-ordinate bench of this Court in The Film and Television Producers Guild of India Ltd. (supra) relied on paragraph 10 of the Supreme Court judgment in St. Johns Teachers Training Institute v. Regional Director N.C.T.E., (2003) 3 SCC 321 . The relevant portion of which is already reproduced hereinabove. 51. Mr. Anil Singh, learned ASG has relied on paragraph 18 of the judgment of Consumer Action Group (supra). The same is reproduced hereinbelow:— “18. The catena of decisions referred to above concludes unwaveringly in spite of very wide power being conferred on delegatee that such a section would still not be ultra vires, if guideline could be gathered from the Preamble, Object and Reasons and other provisions of the Acts and Rules. In testing validity of such provision, the courts have to discover, whether there is any legislative policy purpose of the statute or indication of any clear will through its various provisions, if there be any, then this by itself would be a guiding factor to be exercised by the delegatee. In other words, then it cannot be held that such a power is unbridled or uncanalised. The exercise of power of such delegatee is controlled through such policy. In the fast changing scenario of economic, social order with scientific development spawns innumerable situations which Legislature possibly could not foresee, so delegatee is entrusted with power to meet such exigencies within the in built check or guidance and in the present case to be within the declared policy. So delegatee has to exercise its powers within this controlled path to subserve the policy and to achieve the objectives of the Act. A situation may arise, in some cases where strict adherence to any provision of the statute or rules may result in great hardship, in a given situation, where exercise of such power of exemption is to remove this hardship without materially effecting the policy of the Act, viz., development in the present case then such exercise of power would be covered under it. All situation cannot be culled out which has to be judiciously judged and exercised, to meet any such great hardship of any individual or institution or conversely in the interest of society at large. Such power is meant rarely to be used. So far decisions relied by the petitioner, where the provisions were held to be ultra vires, they are not cases in which court found that there was any policy laid down under the Act. In A.N. Parasuraman (supra) Court held Section 22 to be ultra vires as the Act did not lay down any principle or policy. Similarly, in Kunnathat Thathunni Moopil Nair (supra) Section 7 was held to be ultra vires as there was no principle or policy laid down.” 52. Mr. Anil Singh, the learned ASG has relied on paragraph 17 of State of Madhya Pradesh v. Rakesh Kohli (Supra). The said paragraph 17 is reproduced hereinbelow:— “17. This Court has repeatedly stated that legislative enactment can be struck down by Court only on two grounds, namely (i), that the appropriate Legislature does not have competency to make the law and (ii), that it does not take away or abridge any of the fundamental rights enumerated in Part - III of the Constitution or any other constitutional provisions. In Mcdowell and Co.2 while dealing with the challenge to an enactment based on Article 14, this Court stated in paragraph 43 (at pg. 737-38) of the Report as follows: “43……..A law made by Parliament or the legislature can be struck down by courts on two grounds and two grounds alone, viz., (1) lack of legislative competence and (2) violation of any of the fundamental rights guaranteed in Part III of the Constitution or of any other constitutional provision. There is no third ground………. …….. if an enactment is challenged as violative of Article 14, it can be struck down only if it is found that it is violative of the equality clause/equal protection clause enshrined therein. Similarly, if an enactment is challenged as violative of any of the fundamental rights guaranteed by clauses (a) to (g) of Article 19(1), it can be struck down only if it is found not saved by any of the clauses (2) to (6) of Article 19 and so on. No enactment can be struck down by just saying that it is arbitrary or unreasonable. No enactment can be struck down by just saying that it is arbitrary or unreasonable. Some or other constitutional infirmity has to be found before invalidating an Act. An enactment cannot be struck down on the ground that court thinks it unjustified. Parliament and the legislatures, composed as they are of the representatives of the people, are supposed to know and be aware of the needs of the people and what is good and bad for them. The court cannot sit in judgment over their wisdom.” (Emphasis Supplied) 53. Approach of the Court while dealing with Economic Legislation 54. In the present case we are concerned with the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2022 and the Security Interest (Enforcement) Rules, 2002. Undoubtedly the said Act and said Rules are legislation which deals with economic matters. The Supreme Court in the case of Swiss Ribbons Pvt. Ltd. (supra) have discussed what should be the approach of the Court while dealing with economic legislation and it has been held that the Court must defer to the legislative judgment in the matters relating to social and economic policies and must not interfere unless the exercise of legislative judgment appears to be palpably arbitrary. The Supreme Court discussed the said aspect under the title “Judicial hands-off qua economic legislation”. After discussing the judgments of Foreign Courts, the Supreme Court referred to some of the judgments of the Supreme Court in paragraphs 21 to 23, which are reproduced hereinbelow: “21. In this country, this Court in R.K. Garg v. Union of India, (1981) 4 SCC 675 has held: “8. Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. It has been said by no less a person than Holmes, J., that the legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrinaire or strait-jacket formula and this is particularly true in case of legislation dealing with economic matters, where, having regard to the nature of the problems required to be dealt with, greater play in the joints has to be allowed to the legislature. The court should feel more inclined to give judicial deference to legislative judgment in the field of economic regulation than in other areas where fundamental human rights are involved. Nowhere has this admonition been more felicitously expressed than in Morey v. Doud where Frankfurter, J., said in his inimitable style: In the utilities, tax and economic regulation cases, there are good reasons for judicial self-restraint if not judicial deference to legislative judgment. The legislature after all has the affirmative responsibility. The courts have only the power to destroy, not to reconstruct. When these are added to the complexity of economic regulation, the uncertainty, the liability to error, the bewildering conflict of the experts, and the number of times the judges have been overruled by events - self-limitation can be seen to be the path to judicial wisdom and institutional prestige and stability. The Court must always remember that “legislation is directed to practical problems, that the economic mechanism is highly sensitive and complex, that many problems are singular and contingent, that laws are not abstract propositions and do not relate to abstract units and are not to be measured by abstract symmetry; that exact wisdom and nice adaption of remedy are not always possible and that judgment is largely a prophecy based on meagre and uninterpreted experience. Every legislation, particularly in economic matters is essentially empiric and it is based on experimentation or what one may call trial and error method and therefore it cannot provide for all possible situations or anticipate all possible abuses. There may be crudities and inequities in complicated experimental economic legislation but on that account alone it cannot be struck down as invalid. The courts cannot, as pointed out by the United States Supreme Court in Secretary of Agriculture v. Central Roig Refining Company [94 L.Ed. 381 : 338 US 604 (1950)] be converted into tribunals for relief from such crudities and inequities. There may even be possibilities of abuse, but that too cannot of itself be a ground for invalidating the legislation, because it is not possible for any legislature to anticipate as if by some divine prescience, distortions and abuses of its legislation which may be made by those subject to its provisions and to provide against such distortions and abuses. There may even be possibilities of abuse, but that too cannot of itself be a ground for invalidating the legislation, because it is not possible for any legislature to anticipate as if by some divine prescience, distortions and abuses of its legislation which may be made by those subject to its provisions and to provide against such distortions and abuses. Indeed, howsoever great may be the care bestowed on its framing, it is difficult to conceive of a legislation which is not capable of being abused by perverted human ingenuity. The Court must therefore adjudge the constitutionality of such legislation by the generality of its provisions and not by its crudities or inequities or by the possibilities of abuse of any of its provisions. If any crudities, inequities or possibilities of abuse come to light, the legislature can always step in and enact suitable amendatory legislation. That is the essence of pragmatic approach which must guide and inspire the legislature in dealing with complex economic issues. 19. It is true that certain immunities and exemptions are granted to persons investing their unaccounted money in purchase of Special Bearer Bonds but that is an inducement which has to be offered for unearthing black money. Those who have successfully evaded taxation and concealed their income or wealth despite the stringent tax laws and the efforts of the tax department are not likely to disclose their unaccounted money without some inducement by way of immunities and exemptions and it must necessarily be left to the legislature to decide what immunities and exemptions would be sufficient for the purpose. It would be outside the province of the Court to consider if any particular immunity or exemption is necessary or not for the purpose of inducing disclosure of black money. That would depend upon diverse fiscal and economic considerations based on practical necessity and administrative expediency and would also involve a certain amount of experimentation on which the Court would be least fitted to pronounce. The Court would not have the necessary competence and expertise to adjudicate upon such an economic issue. The Court cannot possibly assess or evaluate what would be the impact of a particular immunity or exemption and whether it would serve the purpose in view or not. The Court would not have the necessary competence and expertise to adjudicate upon such an economic issue. The Court cannot possibly assess or evaluate what would be the impact of a particular immunity or exemption and whether it would serve the purpose in view or not. There are so many imponderables that would enter into the determination that it would be wise for the Court not to hazard an opinion where even economists may differ. The Court must while examining the constitutional validity of a legislation of this kind, be resilient, not rigid, forward looking, not static, liberal, not verbal and the Court must always bear in mind the constitutional proposition enunciated by the Supreme Court of the United States in Munn v. Illinois [94 US 113 (1876)], namely, that courts do not substitute their social and economic beliefs for the judgment of legislative bodies. The Court must defer to legislative judgment in matters relating to social and economic policies and must not interfere, unless the exercise of legislative judgment appears to be palpably arbitrary. The Court should constantly remind itself of what the Supreme Court of the United States said in Metropolis Theater Company v. City of Chicago : (SCC Online US SC para 12) 12. …The problems of government are practical ones and may justify, if they do not require, rough accommodations, illogical it may be, and unscientific. But even such criticism should not be hastily expressed. What is best is not always discernible, the wisdom of any choice may be disputed or condemned. Mere error of government are not subject to our judicial review. It is true that one or the other of the immunities or exemptions granted under the provisions of the Act may be taken advantage of by resourceful persons by adopting ingenious methods and devices with a view to avoiding or saving tax. But that cannot be helped because human ingenuity is so great when it comes to tax avoidance that it would be almost impossible to frame tax legislation which cannot be abused. But that cannot be helped because human ingenuity is so great when it comes to tax avoidance that it would be almost impossible to frame tax legislation which cannot be abused. Moreover, as already pointed out above, the trial and error method is inherent in every legislative effort to deal with an obstinate social or economic issue and if it is found that any immunity or exemption granted under the Act is being utilized for tax evasion or avoidance not intended by the legislature, the Act can always be amended and the abuse terminated. We are accordingly of the view that none of the provisions of the Act is violative of Article 14 and its constitutional validity must be upheld. 22. Likewise, in Bhavesh D. Parish v. Union of India, (2000) 5 SCC 471 , this Court held: “26. The services rendered by certain informal sectors of the Indian economy could not be belittled. However, in the path of economic progress, if the informal system was sought to be replaced by a more organized system, capable of better regulation and discipline, then this was an economic philosophy reflected by the legislation in question. Such a philosophy might have its merits and demerits. But these were matters of economic policy. They are best left to the wisdom of the legislature and in policy matters the accepted principle is that the courts should not interfere. Moreover in the context of the changed economic scenario the expertise of people dealing with the subject should not be lightly interfered with. The consequences of such interdiction can have large-scale ramifications and can put the clock back for a number of years. The process of rationalization of the infirmities in the economy can be put in serious jeopardy and, therefore, it is necessary that while dealing with economic legislations, this Court, while not jettisoning its jurisdiction to curb arbitrary action or unconstitutional legislation, should interfere only in those few cases where the view reflected in the legislation is not possible to be taken at all. 30. Before we conclude there is another matter which we must advert to. 30. Before we conclude there is another matter which we must advert to. It has been brought to our notice that Section 45-S of the Act has been challenged in various High Courts and a few of them have granted the stay of provisions of Section 45-S. When considering an application for staying the operation of a piece of legislation, and that too pertaining to economic reform or change, then the courts must bear in mind that unless the provision is manifestly unjust or glaringly unconstitutional, the courts must show judicial restraint in staying the applicability of the same. Merely because a statute comes up for examination and some arguable point is raised, which persuades the courts to consider the controversy, the legislative will should not normally be put under suspension pending such consideration. It is now well settled that there is always a presumption in favour of the constitutional validity of any legislation, unless the same is set aside after final hearing and, therefore, the tendency to grant stay of legislation relating to economic reform, at the interim stage, cannot be understood. The system of checks and balances has to be utilized in a balanced manner with the primary objective of accelerating economic growth rather than suspending its growth by doubting its constitutional efficacy at the threshold itself. 23. In Directorate General of Foreign Trade v. Kanak Exports, (2016) 2 SCC 226 , this Court has held: “109. Therefore, it cannot be denied that the Government has a right to amend, modify or even rescind a particular scheme. It is well settled that in complex economic matters every decision is necessarily empiric and it is based on experimentation or what one may call trial and error method and therefore, its validity cannot be tested on any rigid prior considerations or on the application of any straitjacket formula. In Balco Employees' the Supreme Court held that laws, including executive action relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion, etc. In Balco Employees' the Supreme Court held that laws, including executive action relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion, etc. that the legislature should be allowed some play in the joints because it has to deal with complex problems which do not admit of solution through any doctrine or straitjacket formula and this is particularly true in case of legislation dealing with economic matters, where having regard to the nature of the problems greater latitude require to be allowed to the legislature.” (Emphasis supplied) 55. Possibility of Abuse-whether can be ground to challenge constitutional validity 56. Supreme Court in A. Thangal Kunju Musaliar v. M. Venkatachalam Potti (supra) dealt with this aspect namely whether possibility of abuse can be a ground of challenge to the validity of pieces of legislation. The relevant discussion is in paragraphs 68 and 69 of the said judgment, which are reproduced hereinbelow for ready reference: “68. It was, however, urged that it would be open to the Government within the terms of Section 5(1) the Act itself to discriminate between persons and persons who fell within the very group or category; the Government might refer the case of A to the Commission leaving the case of B to be dealt with by the ordinary procedure laid down in the Travancore Act 23 of 1121. The possibility of such discriminatory treatment of persons falling within the same group or category, however, cannot necessarily invalidate this piece of legislation. It is to be presumed, unless the contrary were shown, that the administration of a particular law would be done “not with an evil eye and unequal hand” and the selection made by the Government of the cases of persons to be referred for investigation by the Commission would not be discriminatory. 69. This question was considered by this Court in two cases viz. Kathi Raning Rawat v. The State of Saurashtra and Kedar Nath Bajoria v. The State of West Bengal. Mr. 69. This question was considered by this Court in two cases viz. Kathi Raning Rawat v. The State of Saurashtra and Kedar Nath Bajoria v. The State of West Bengal. Mr. Justice Mukherjea, as he then was, dealt with the argument in Kathi Raning Rawat v. The State of Saurashtra as under: “It is a doctrine of the American courts which seems to be well founded on principle that the equal protection clause can be invoked not merely where discrimination appears on the express terms of the statute itself, but also when it is the result of improper or prejudiced execution of the law. (Vide Weaver on Constitutional Law, p. 404). But a statute will not necessarily be condemned as discriminatory, because it does not make the classification itself but, as an effective way of carrying out its policy, vests the authority to do it in certain officers or administrative bodies…. In my opinion, if the legislative policy is clear and definite and as an effective method of carrying out that policy a discretion is vested by the statute upon a body of administrators or officers to make selective application of the law to certain classes or groups of persons, the statute itself cannot be condemned as a piece of discriminatory legislation. After all the law does all that is needed when it does all that it can, indicates a policy …. and seeks to bring within the lines all similarly situated so far as its means allow (Vide Buck v. Bell, 274 US 200 (1927), 208). In such cases, the power given to the executive body would import a duty on it to classify the subject-matter of legislation in accordance with the objective indicated in the statute. The discretion that is conferred on official agencies in such circumstances is not an unguided discretion; it has to be exercised in conformity with the policy to effectuate which the direction is given and it is in relation to that objective that the propriety of the classification would have to be tested. If the administrative body proceeds to classify persons or things on a basis which has no rational relation to the objective of the legislature, its action can certainly be annulled as offending against the equal protection clause. If the administrative body proceeds to classify persons or things on a basis which has no rational relation to the objective of the legislature, its action can certainly be annulled as offending against the equal protection clause. On the other hand, if the statute itself does not disclose a definite policy or objective and it confers authority on another to make selection at its pleasure, the statute would be held on the face of it to be discriminatory irrespective of the way in which it is applied….” The same line of demarcation was also emphasized by Patanjali Sastri, C.J., delivering the judgment of the Court in Kedar Nath Bajoria v. State of West Bengal.” (Emphasis added) 57. In The Film and Television Producers Guild of India Ltd. (supra) this Court discussed in para 36 whether possibility of abuse can be a ground for challenging the legislation. The relevant discussion is reproduced hereinbelow:— “36….In Pannalal Binjraj v. Union of India, AIR 1957 SC 395, the Constitution Bench of the Supreme Court has held - “legislation-especially primary legislation may not be invalidated merely on account of a possibility of its abuse. Even where an abuse occurs, what will be struck down will not be the provision but the abuse itself”. In Government of Andhra Pradesh v. P. Laxmi Devi, (2008) 4 SCC 720 , the Supreme Court has held - “There is always a difference between a statute and the action taken under a statute. The statute may be valid and constitutional, but the action taken under it may not be valid.” (Emphasis added) 58. The following broad principles emerge from the above judgments of the Supreme Court regarding challenge to subordinate legislation/delegated legislation:— A) There is a presumption in favour of constitutionality or validity of a sub-ordinate Legislation and the burden is upon him who attacks it to show that it is invalid. A piece of subordinate legislation does not carry the same degree of immunity which is enjoyed by a statute passed by a competent legislature. Subordinate legislation may be questioned on any of the grounds on which plenary legislation is questioned. B) A sub-ordinate legislation can be challenged under any of the following grounds: (1) Lack of legislative competence to make the subordinate legislation. (2) Violation of Fundamental Rights guaranteed under the Constitution of India. (3) Violation of any provision of the Constitution of India. Subordinate legislation may be questioned on any of the grounds on which plenary legislation is questioned. B) A sub-ordinate legislation can be challenged under any of the following grounds: (1) Lack of legislative competence to make the subordinate legislation. (2) Violation of Fundamental Rights guaranteed under the Constitution of India. (3) Violation of any provision of the Constitution of India. (4) Failure to conform to the Statute under which it is made or exceeding the limits of authority conferred by the enabling Act. (5) Repugnancy to the laws of the land, that is, any enactment. (6) Manifest arbitrariness/unreasonableness. C) The court considering the validity of a sub-ordinate Legislation, will have to consider the nature, object and scheme of the enabling Act, and also the area over which power has been delegated under the Act and then decide whether the subordinate Legislation conforms to the parent Statute. D) A sub-ordinate legislation is liable to be declared invalid if the same is manifestly unjust or oppressive or outrageous or directed to be unauthorized and/or violative of general principles of law of the land or so vague that it cannot be predicted with certainty as to what it prohibited or so unreasonable that they cannot be attributed to the power delegated or otherwise discloses bad faith. E) In spite of very wide power being conferred on delegatee that such a section would still not be ultra vires, if guideline could be gathered from the Preamble, Object and Reasons and other provisions of the Acts and Rules. In testing validity of such provision, the courts have to discover, whether there is any legislative policy purpose of the statute or indication of any clear will through its various provisions, if there be any, then this by itself would be a guiding factor to be exercised by the delegatee. In other words, then it cannot be held that such a power is unbridled or uncanalised. The exercise of power of such delegatee is controlled through such policy. F) No enactment can be struck down by just saying that it is arbitrary or unreasonable. Some or other constitutional infirmity has to be found before invalidating an Act. G) Every legislation, particularly in economic matters is essentially empiric and it is based on experimentation or what one may call trial and error method and therefore it cannot provide for all possible situations or anticipate all possible abuses. Some or other constitutional infirmity has to be found before invalidating an Act. G) Every legislation, particularly in economic matters is essentially empiric and it is based on experimentation or what one may call trial and error method and therefore it cannot provide for all possible situations or anticipate all possible abuses. There may be crudities and inequities in complicated experimental economic legislation but on that account alone it cannot be struck down as invalid. There may even be possibilities of abuse, but that too cannot of itself be a ground for invalidating the legislation. The Court must therefore adjudge the constitutionality of such legislation by the generality of its provisions and not by its crudities or inequities or by the possibilities of abuse of any of its provisions. If any crudities, inequities or possibilities of abuse come to light, the legislature can always step in and enact suitable amendatory legislation. H) Courts do not substitute their social and economic beliefs for the judgment of legislative bodies. The Court must defer to legislative judgment in matters relating to social and economic policies and must not interfere, unless the exercise of legislative judgment appears to be palpably arbitrary. I) The matters of economic policy are best left to the wisdom of the legislature and in policy matters the accepted principle is that the courts should not interfere. J) It is well settled that in complex economic matters every decision is necessarily empiric and it is based on experimentation or what one may call trial and error method and therefore, its validity cannot be tested on any rigid prior considerations or on the application of any straitjacket formula. K) Laws, including executive action relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion, etc. that the legislature should be allowed some play in the joints because it has to deal with complex problems which do not admit of solution through any doctrine or straitjacket formula and this is particularly true in case of legislation dealing with economic matters, where having regard to the nature of the problems greater latitude require to be allowed to the legislature. L) If the legislative policy is clear and definite and as an effective method of carrying out that policy a discretion is vested by the statute upon a body of administrators or officers, the statute itself cannot be condemned as a piece of discriminatory legislation. The discretion that is conferred on authorities should not be an unguided discretion; it has to be exercised in conformity with the policy. If the statute itself does not disclose a definite policy or objective and it confers authority on another to make selection at its pleasure, the statute would be held on the face of it to be discriminatory irrespective of the way in which it is applied. Some other principles we have discussed in later part of this judgment. The said principles are as follows: M) Absence of the arbitrary power is essential for Rule of law. In the system governed by the Rule of law when the discretion is conferred upon the executive authority, the same be confined within clearly defined limits. The discretion means sound discretion guided by law. Such discretion should not be arbitrary, vague and fanciful. N) To save a statutory provision from the vice of unconstitutionality sometimes a restricted or extended interpretation of the statute has to be given. This is because it is a well settled principle of interpretation that the Court should make every effort to save a statute from becoming unconstitutional and an another interpretation will be constitutional, then the Court should prefer the later, on the ground that the legislature is presumed to not have intended to have exceeded its jurisdiction. Sometimes to uphold the constitutional validity the statutory provision has to be read down. O) The doctrine of reading down or of recasting the statute can be applied for saving the statute from being struck down on account of its unconstitutionality. The Court would accept the interpretation which would be in favour of constitutionality rather than one which would render the law unconstitutional. The doctrine of “reading down” or “reading in to” the provision is to make it effective, workable and to ensure the attainment of the object of the Act. It is a rule of harmonious construction. Rule of “reading down” is to be used for the limited purpose of making a particular provision workable and to bring it in harmony with other provisions of the statute. It is a rule of harmonious construction. Rule of “reading down” is to be used for the limited purpose of making a particular provision workable and to bring it in harmony with other provisions of the statute. It is to be used keeping in view the scheme of the statute and to fulfill its purpose. P) The legislature cannot sit over a judgment of this Court or overrule it. There cannot be any declaration of invalidating a judgment of the Court without altering the legal basis of the judgment as a judgment is delivered with strict regard to the enactment as applicable at the relevant time. However, once the enactment itself stands corrected, the basic cause of adjudication stands altered and necessary effect follows the same. In exercising legislative power, the legislature by mere declaration, without anything more, cannot directly overrule, revise or override a judicial decision. It can render judicial decision ineffective by enacting valid law on the topic within its legislative field fundamentally altering or changing its character retrospectively. In the light of above legal position we will examine the constitutional validity of Rule 8(8) of the said Rules. 59. Points for consideration 60. At this stage, it is required to be made clear that Mr. Thakkar, the learned Senior Counsel fairly stated that he is not challenging the legislative competence to permit sale by private treaty and he is only challenging the mechanism provided for conducting the sale by private treaty. 61. The broad challenge raised by the Petitioner to the amended Rule 8(8) can be summarised as follows:— I. Rule 8(8) gives unfettered and arbitrary power to the secured creditor/authorised officer to sale property of the borrower/owner at price and terms which are agreed between the secured creditor and buyer. Unrestricted power is given to the secured creditor/authorised officer and, therefore, even if such secured creditor/authorised officer acts arbitrary or with improper motive there is no check. II. The sale by private treaty can be conducted even at first instance, for any price and on terms and conditions which proposed purchaser and secured creditor agrees. III. The impugned amendment is enacted to nullify the judgment of the Supreme Court in the case of Mathew Varghese (supra) and General Manager, Sri. Siddheshwara Co.-operative Bank Ltd. (supra). IV. II. The sale by private treaty can be conducted even at first instance, for any price and on terms and conditions which proposed purchaser and secured creditor agrees. III. The impugned amendment is enacted to nullify the judgment of the Supreme Court in the case of Mathew Varghese (supra) and General Manager, Sri. Siddheshwara Co.-operative Bank Ltd. (supra). IV. Amended rule destroys the basic objective of section 13 read with Rule 8 and 9 i.e. sale of secured asset in fair and transparent manner to achieve maximum value. V. The impugned amendment is contrary to the judgment of Mathew Varghese (supra) holding that no sale can be postponed beyond one month. 62. The learned ASG and learned Senior Counsel appearing for the respective Respondents have made extensive submissions regarding above points raised by the Petitioner and also raised certain additional points. The additional points raised by them are as follows:— VI. The Petitioner has not raised specific grounds and details to challenge the constitutional validity of said amended Rule. VII. The Central Government is empowered to enact amended Rule 8(8). VIII. Provisions of the Act and the Rules both are required to be seen textually and contextually. If so analyzed textually and contextually, the text becomes clear and the purpose and reason behind provision of the Act and Rules and the amendment to the Rules fall in place and the challenge become unsustainable. These aspects becomes very relevant in view of legal fiction created under section 13(6) of the said Act by which the secured creditor is placed in the position of the owner and therefore secured creditor can sell the secured asset as owner. IX. If the nature, object and scheme of the said Act and also the area over which power has been delegated under the said Act is examined then it is clear that the subordinate legislation in question i.e. amended Rule 8(8) is in conformity with the provisions of the said Act. REASONING: 63. Point No. 1 - Unfettered/Arbitrary powers are given to the Secured Creditor/Authorised Officer. 64. Mr. Thakkar, the learned Senior Counsel appearing for the Petitioner to substantiate the contention that absence of arbitrary power is the first essential of the Rule of law, relied on judgment of the Supreme Court in the matter of S.G. Jaisinghani (supra) and particularly on paragraph 14 of the same. 64. Mr. Thakkar, the learned Senior Counsel appearing for the Petitioner to substantiate the contention that absence of arbitrary power is the first essential of the Rule of law, relied on judgment of the Supreme Court in the matter of S.G. Jaisinghani (supra) and particularly on paragraph 14 of the same. The said paragraph 14 is reproduced hereinbelow for ready reference: “14. In this context it is important to emphasize that the absence of arbitrary power is the first essential of the rule of law upon which our whole constitutional system is based. In a system governed by rule of law, discretion, when conferred upon executive authorities, must be confined within clearly defined limits. The rule of law from this point of view means that decisions should be made by the application of known principles and rules and, in general, such decisions should be predictable and the citizen should know where he is. If a decision is taken without any principle or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law. (See Dicey-“Law of the Constitution”-10th Edn., Introduction ex). “Law has reached its finest moments”, stated Douglas, J. ub United States v. Wunderlick, “when it has freed man from the unlimited discretion of some ruler…. Where discretion, is absolute, man has always suffered”. It is in this sense that the rule of law may be said to be the sworn enemy of caprice. Discretion, as Lord Mansfield slated it in classic terms in the case of John Wilkes, “means sound discretion guided by law. It must be governed by Rule, not by humour : it must not be arbitrary, vague and fanciful.” 65. He also relied on the case of Dwarka Prasad Laxmi Narain Yadav (supra). He relied on paragraphs 7 and 8 of the said judgment. The said paragraphs are quoted hereinbelow for ready reference: “7.-------- The power of granting or withholding licences or of fixing the prices of the goods would necessarily have to be vested in certain public officers or bodies and they would certainly have to be left with some amount of discretion in these matters. The said paragraphs are quoted hereinbelow for ready reference: “7.-------- The power of granting or withholding licences or of fixing the prices of the goods would necessarily have to be vested in certain public officers or bodies and they would certainly have to be left with some amount of discretion in these matters. So far no exception can be taken; but the mischief arises when the power conferred on such officers is an arbitrary power unregulated by any rule or principle and it is left entirely to the discretion of particular persons to do anything they like without any check or control by any higher authority. A law or order, which confers arbitrary and uncontrolled power upon the executive in the matter of regulating trade or business in normally available commodities cannot but be held to be unreasonable. As has been held, by this court in Chintamon v. The State of Madhya Pradesh, the phrase “reasonable restriction’ connotes that the limitation imposed upon a person in enjoyment of a right should not be arbitrary or of an excessive nature beyond what is required in the interest of the public. Legislation, which arbitrarily or excessively invades the right, cannot be said to contain the quality of reasonableness, and unless it strikes a proper balance between the freedom guaranteed under Article 19(1)(g) and the social control permitted by clause (6) of Article 19, it must be held to be wanting in reasonableness. It is in the light of these principles that we would proceed to examine the provisions of this control Order, the validity of Which has been impugned before us on behalf of the petitioners. 8. … An unrestricted power has been given to the State Controller to make exemptions, and even if he acts arbitrarily or from improper motives, there is no check over it and no way of obtaining redress. Clause 3(2)(b) of the Control Order seems to us, therefore, prima facie to be unreasonable. We agree, however, with Mr. Umrigar that this portion of the Control Order, even though bad, is severable from the rest and we are not really concerned with the validity or otherwise of this provision in the present case as no action taken under it is the subject matter of any complaint before us. 66. We agree, however, with Mr. Umrigar that this portion of the Control Order, even though bad, is severable from the rest and we are not really concerned with the validity or otherwise of this provision in the present case as no action taken under it is the subject matter of any complaint before us. 66. He also relied on the judgment of the Supreme Court in the case of State of Mysore (supra) and particularly on paragraph 15 of the same which is reproduced hereinbelow for ready reference: “15. The principle of recruitment by open competition aims at ensuring equality of opportunity in the matter of employment and obtaining the services of the most meritorious candidates. Rules 1 to 8, 9(1) and the first part of Rule 9(2) seek to achieve this aim. The last part of Rule 9(2) subverts and destroys the basic objectives of the preceding rules. It vests in the Government an arbitrary power of patronage. Though Rule 9(1) requires the appointment of successful candidates to Class I posts in the order of merit and thereafter to Class II posts in the order of merit, Rule 9(1) is subject to Rule 9(2), and under the cover of Rule 9(2) the Government can even arrogate to itself the power of assigning a Class I post to a less meritorious and a Class II post to a more meritorious candidate. We hold that the last part of Rule 9(2) gives the Government an arbitrary power of ignoring the just claims of successful candidates for recruitment to offices under the State. It is violative of Articles 14 and 16(1) of the Constitution and must be struck down.” 67. Following principles emerge from the above authorities:— (I) Absence of the arbitrary power is essential for Rule of law. (II) In the system governed by the rule of law when discretion is conferred upon executive authority, the same be confined within clearly defined limits. (III) Discretion means sound discretion guided by law. It must not be arbitrary, vague and fanciful. (IV) When the power is conferred on the public officers, the mischief arises when the power conferred is arbitrary power and unregulated by any rule or principle and it is left entirely to the discretion of particular persons to do anything they like without any check or control by any higher authority. 68. (IV) When the power is conferred on the public officers, the mischief arises when the power conferred is arbitrary power and unregulated by any rule or principle and it is left entirely to the discretion of particular persons to do anything they like without any check or control by any higher authority. 68. In this behalf additionally we have also set out certain principles in paragraph 16(D) and 16(E). 69. Scheme of said Act and said Rules concerning enforcement of security interest. Before applying the above principles to the present case, it is necessary to examine the scheme of the said Act and said Rules regarding enforcement of the security interest with respect to immovable properties. The relevant provisions concerning this are Section 13 of the said Act and Rules 8 and 9 of the said Rules. The said Section 13 and Rules 8 and 9 are reproduced hereinbelow as they are relevant and important for examining the constitutional validity of the amended Rule 8(8). Section 13 of the said Act. 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. 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): Provided that- (i) the requirement of classification of secured debt as non-performing asset under this sub-section shall not apply to a borrower who has raised funds through issue of debt securities; and (ii) in the event of default, the debenture trustee shall be entitled to enforce security interest in the same manner as provided under this section with such modifications as may be necessary and in accordance with the terms and conditions of security documents executed in favour of the debenture trustee. (3) The notice referred to in sub-section (2) shall give details of the amount payable by the borrower and the secured assets intended to be enforced by the secured creditor in the event of non-payment of secured debts by the borrower. (3A) If, on receipt of the notice under subsection (2), the borrower makes any representation or raises any objection, the secured creditor shall consider such representation or objection and if the secured creditor comes to the conclusion that such representation or objection is not acceptable or tenable, he shall communicate within one week of receipt of such representation or objection the reasons for non-acceptance of the representation or objection to the borrower: Provided that the reasons so communicated or the likely action of the secured creditor at the stage of communication of reasons shall not confer any right upon the borrower to prefer an application to the Debts Recovery Tribunal under section 17 or the Court of District Judge under section 17A. (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 borrower including the right to transfer by way of lease, assignment or sale for realising 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 realising the secured asset: Provided that the right to transfer by way of lease, assignment or sale shall be exercised only where the substantial part of the business of the borrower is held as security for the debt: Provided further that where the management of whole, of the business or part of the business is severable, the secured creditor shall take over the management of such business of the borrower which is relatable to the security or the debt; (c) appoint any person (hereafter referred to as the manager), to manage the secured assets the possession of which has been taken over by the secured creditor; (d) require at any time by notice in writing, any person who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt. (5) Any payment made by any person referred to in clause (d) of sub-section (4) to the secured creditor shall give such person a valid discharge as if he has made payment to the borrower. (5-A) Where the sale of an immovable property, for which a reserve price has been specified, has been postponed for want of a bid of an amount not less than such reserve price, it shall be lawful for any officer of the secured creditor, if so authorised by the secured creditor in this behalf, to bid for the immovable property on behalf of the secured creditor at any subsequent sale. (5-B) Where the secured creditor, referred to in sub-section (5-A), is declared to be the purchaser of the immovable property at any subsequent sale, the amount of the purchase price shall be adjusted towards the amount of the claim of the secured creditor for which the auction of enforcement of security interest is taken by the second creditor, under subsection (4) of section 13. (5-C) The provisions of section 9 of the Banking Regulation Act, 1949 (10 of 1949) shall, as far as may be, apply to the immovable property acquired by secured creditor under sub-section (5-A). (6) Any transfer of secured asset after taking possession thereof or take over of management under sub-section (4), by the secured creditor or by the manager on behalf of the secured creditors shall vest in the transferee all rights in, or in relation to, the secured asset transferred as if the transfer had been made by the owner of such secured asset. (7) Where any action has been taken against a borrower under the provisions of sub-section (4), all costs, charges and expenses which, in the opinion of the secured creditor, have been properly incurred by him or any expenses incidental thereto, shall be recoverable from the borrower and the money which is received by the secured creditor shall, in the absence of any contract to the contrary, be held by him in trust, to be applied, firstly, in payment of such costs, charges and expenses and secondly, in discharge of the dues of the secured creditor and the residue of the money so received shall be paid to the person entitled thereto in accordance with his rights and interests. (8) Where the amount of dues of the secured creditor together with all costs, charges and expenses incurred by him is tendered to the secured creditor at any time before the date of publication of notice for public auction or inviting quotations or tender from public or private treaty for transfer by way of lease, assignment or sale of the secured assets, (i) the secured assets shall not be transferred by way of lease assignment or sale by the secured creditor, and (ii) in case, any step has been taken by the secured creditor for transfer by way of lease or assignment or sale of the assets before tendering of such amount under this sub-section, no further shall be taken by such secured creditor for transfer by way of lease or assignment or sale of such secured asset. (9) Subject to the provisions of the Insolvency and Bankruptcy Code, 2016, in the case of financing of a financial asset by more than one secured creditors or joint financing of a financial asset by secured creditors, no secured creditor shall be entitled to exercise any or all of the rights conferred on him under or pursuant to sub-section (4) unless exercise of such right is agreed upon by the secured creditors representing not less than three-fourth in value of the amount outstanding as on a record date and such action shall be binding on all the secured creditors: Provided that in the case of a company in liquidation, the amount realised from the sale of secured assets shall be distributed in accordance with the provisions of section 529A of the Companies Act, 1956 (1 of 1956): Provided further that in the case of a company being wound up on or after the commencement of this Act, the secured creditor of such company, who opts to realise his security instead of relinquishing his security and proving his debt under proviso to sub-section (1) of section 529 of the Companies Act, 1956 (1 of 1956), may retain the sale proceeds of his secured assets after depositing the workmen's dues with the liquidator in accordance with the provisions of section 529A of that Act: Provided also that the liquidator referred to in the second proviso shall intimate the secured creditors the workmen's dues in accordance with the provisions of section 529A of the Companies Act, 1956 (1 of 1956) and in case such workmen's dues cannot be ascertained, the liquidator shall intimate the estimated amount of workmen's dues under that section to the secured creditor and in such case the secured creditor may retain the sale proceeds of the secured assets after depositing the amount of such estimated dues with the liquidator: Provided also that in case the secured creditor deposits the estimated amount of workmen's dues, such creditor shall be liable to pay the balance of the workmen's dues or entitled to receive the excess amount, if any, deposited by the secured creditor with the liquidator: Provided also that the secured creditor shall furnish an undertaking to the liquidator to pay the balance of the workmen's dues, if any. Explanation.-For the purposes of this subsection,- (a) “record date” means the date agreed upon by the secured creditors representing not less than three-fourth in value of the amount outstanding on such date; (b) “amount outstanding” shall include principal, interest and any other dues payable by the borrower to the secured creditor in respect of secured asset as per the books of account of the secured creditor. (10) Where dues of the secured creditor are not fully satisfied with the sale proceeds of the secured assets, the secured creditor may file an application in the form and manner as may be prescribed to the Debts Recovery Tribunal having jurisdiction or a competent court, as the case may be, for recovery of the balance amount from the borrower. (11) Without prejudice to the rights conferred on the secured creditor under or by this section, the secured creditor shall be entitled to proceed against the guarantors or sell the pledged assets without first taking any of the measures specified in clauses (a) to (d) of subsection (4) in relation to the secured assets under this Act. (12) The rights of a secured creditor under this Act may be exercised by one or more of his officers authorised in this behalf in such manner as may be prescribed. (13) No borrower shall, after receipt of notice referred to in sub-section (2), transfer by way of sale, lease or otherwise (other than in the ordinary course of his business) any of his secured assets referred to in the notice, without prior written consent of the secured creditor. Rule 8 of the said Rules 8. Sale of immovable secured assets. (1) Where the secured asset is an immovable property, the authorised officer shall take or cause to be taken possession, by delivering a possession notice prepared as nearly as possible in Appendix IV to these rules, to the borrower and by affixing the possession notice on the outer door or at such conspicuous place of the property. (2) The possession notice as referred to in sub-rule (1) shall also be published, as soon as possible but in any case not later than seven day from the date of taking possession, in two leading newspapers, one in vernacular language having sufficient circulation in that locality, by the authorised officer. (2) The possession notice as referred to in sub-rule (1) shall also be published, as soon as possible but in any case not later than seven day from the date of taking possession, in two leading newspapers, one in vernacular language having sufficient circulation in that locality, by the authorised officer. (2-A) All notices under these rules may also be served upon the borrower through electronic mode of service, in addition to the modes prescribed under sub-rule(1) and sub-rule(2) of rule 8. (3) In the event of possession of immovable property is actually taken by the authorised officer, such property shall be kept in his own custody or in the custody of any person authorised or appointed by him, who shall take as much care of the property in his custody as a owner of ordinary prudence would, under the similar circumstances, take of such property. (4) The authorised officer shall take steps for preservation and protection of secured assets and insure them, if necessary, till they are sold or otherwise disposed of. (5) Before effecting sale of the immovable property referred to in sub-rule (1) of rule 9, the authorised officer shall obtain valuation of the property from an approved valuer and in consultation with the secured creditor, fix the reserve price of the property and may sell the whole or any part of such immovable secured asset by any of the following methods: (a) by obtaining quotations from the persons dealing with similar secured assets or otherwise interested in buying the such assets or (b) by inviting tenders from the public (c) by holding public auction or (d) by private treaty. Provided that in case of sale of immovable property in the State of Jammu and Kashmir, the provisions of Jammu and Kashmir Transfer of Property Act, 1977 shall apply to the person who acquires such property in the State. (6) The authorised officer shall serve to the borrower a notice of thirty days for sale of the immovable secured assets, under sub-rule (5): Provided that if the sale of such secured asset is being effected by either inviting tenders from the public or by holding public auction, the secured creditor shall cause a public notice in the Form given in Appendix IV-A to be published in two leading newspapers one in vernacular language having wide circulation in the locality. (7) Every notice of sale shall be affixed on the conspicuous part of the immovable property and the authorised officer shall upoload the detailed terms and conditions of the sale, on the web-site of the secured creditor, which shall include: (a) The description of the immovable property to be sold, including the details of the encumbrances known to the secured creditor (b) the secured debt for recovery of which the property is to be sold (c) reserve price of the immovable secured assets below which the property may not be sold (d) time and place of public auction or the time after which sale by any other mode shall be completed (e) deposit of earnest money as may be stipulated by the secured creditor (f) any other terms and conditions, which the authorised officer considers it material for a purchaser to know the nature and value of the property. (8) Sale by any methods other than public auction or public tender, shall be on such terms as may be settled between the secured creditor and the proposed purchaser in writing. Rule 9 of the said Rules 9. Time of sale, issues of sale certificate and delivery of possession, etc. (1) No sale of immovable property under these rules, in first instance 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. (Note: “or” is interpreted by Mathew Verghese (supra) in paragraph 31 as “and”). Provided further that if sale of immovable property by any one of the methods specified by sub-rule (5) of rule 8 fails and sale is required to be conducted again, the authorised officer shall serve, affix and publish notice of sale of not less than fifteen days to the borrower, for any subsequent sale. (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 8. 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 8. 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, i.e., on the same day or not later than next working day, as the case may be, pay a deposit of twenty-five per cent of the amount of the sale price, which is inclusive of earnest money deposited, if any, 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 purchaser and the secured creditor, in any case not exceeding three months. (5) In default of payment within the period mentioned in sub-rule (4), the deposit shall be forfeited and the property shall be resold and the defaulting purchaser shall forfeit to the secured creditor 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 sale 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 purchasers 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. 70. The said Act was enacted to regulate securitisation and reconstruction of financial assets and enforcement of security interests and to provide for a Central Database of security interests created on property rights and for the matters connected therewith or incidental thereto. Before examining the scheme as reflected in section 13 and Rule 8 and 9 concerning enforcement of security interest in favour of secured creditor it is necessary to set out the statement of object and reasons for enacting the said Act. The same is reproduced hereinbelow for ready reference: “Statement of Objects and Reasons: The Financial sector has been one of the key drivers in India's efforts to achieve success in rapidly developing its economy. While the banking industry in India is progressively complying with the international prudential norms and accounting practices, there are certain areas in which the banking and financial sector do not have a level playing field as compared to other participants in the financial markets in the world. There is no legal provision for facilitating securitisation of financial assets of banks and financial institutions. Further, unlike international banks, the banks and financial institutions in India do not have power to take possession of securities and sell them. Our existing legal framework relating to commercial transactions has not kept pace with the changing commercial practices and financial sector reforms. This has resulted in slow pace of recovery of defaulting loans and mounting levels of non-performing assets of banks and financial institution. Our existing legal framework relating to commercial transactions has not kept pace with the changing commercial practices and financial sector reforms. This has resulted in slow pace of recovery of defaulting loans and mounting levels of non-performing assets of banks and financial institution. Narasimham Committee I and II and Andhyarujina Committee constituted by the Central Government for the purpose of examining banking sector reforms have considered the need for changes in the legal system in respect of these areas. These Committees, inter alia, have suggested enactment of a new legislation for securitisation and empowering banks and financial institutions to take possession of the securities and to sell them without the intervention of the Court. Acting on these suggestions, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Ordinance, 2002 was promulgated on the 21st June, 2002 to regulate securitisation and reconstruction of financial assets and enforcement of security interest and for matters connected therewith or incidental thereto. The provisions of the Ordinance would enable banks and financial institutions to realise long-term assets, manage problem of liquidity, asset liability mismatches and improve recovery by exercising powers to take possession of securities, sell them and reduce non-performing assets by adopting measures for recovery or reconstruction.” (Emphasis supplied) 71. Thus, it is clear that the said Act has been enacted inter alia to overcome following difficulties:— (a) Absence of level playing field in India to the banking and financial sector as compared to other participants in the financial markets in the world. (b) Absence of legal provision for facilitating securitisation of financial assets of banks and financial institutions. (c) The banks and financial institutions in India do not have power to take possession of securities and sell them. (d) Existing legal framework relating to commercial transactions in India has not kept pace with the changing commercial practices and financial sector reforms. (e) This has resulted in slow pace of recovery of defaulting loans and mounting levels of non-performing assets of banks and financial institution. 72. The said Act has been enacted to achieve following purposes:— (a) For facilitating securitisation of financial assets of banks and financial institutions. (b) Empowering banks and financial institutions (i.e. the secured creditors) to take possession of the securities and to sell them without the intervention of the Court. 72. The said Act has been enacted to achieve following purposes:— (a) For facilitating securitisation of financial assets of banks and financial institutions. (b) Empowering banks and financial institutions (i.e. the secured creditors) to take possession of the securities and to sell them without the intervention of the Court. (c) To enable banks and financial institutions to realise long-term assets, manage problem of liquidity, asset liability mismatches and improve recovery by exercising powers to take possession of securities, sell them and reduce non-performing assets by adopting measures for recovery or reconstruction. 73. The scheme of the said Act and Rules regarding enforcement of the security interest (mainly as regards immovable property) as envisaged in section 13 and relevant Rules can be enumerated in broad manner as follows: A) 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 said Act [Section 13(1)]. B) 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 subsection (4) of Section 13 [Section 13(2)]. C) The notice referred to in sub-section (2) of Section 13 shall give details of the amount payable by the borrower and the secured assets intended to be enforced by the secured creditor in the event of non-payment of secured debts by the borrower. The service of such demand notice is to be made in the manner provided in Rule 3. It is specifically provided that where there are more than one borrower, the demand notice shall be served on each borrower. The demand notice may invite attention of the borrower to provisions of sub-section (8) of section 13 of the Act, in respect of time available to the borrower to redeem the secured assets [Section 13(3), Rule 3]. It is specifically provided that where there are more than one borrower, the demand notice shall be served on each borrower. The demand notice may invite attention of the borrower to provisions of sub-section (8) of section 13 of the Act, in respect of time available to the borrower to redeem the secured assets [Section 13(3), Rule 3]. D) No borrower shall, after receipt of notice referred to in Section 13(2), transfer by way of sale, lease or otherwise (other than in the ordinary course of his business) any of his secured assets referred to in the notice, without prior written consent of the secured creditor. (Section 13(13)]. E) If, on receipt of the notice under section 13(2), the borrower makes any representation or raises any objection, the secured creditor/authorised officer shall consider such representation or objection and if the secured creditor/authorised officer comes to the conclusion that such representation or objection is not acceptable or tenable, he shall communicate within fifteen days of receipt of such representation or objection the reasons for non-acceptance of the representation or objection to the borrower. In case on examining the representation made or objection raised by the borrower, the secured creditor is satisfied that there is a need to make any changes or modifications in the demand notice, he shall modify the notice accordingly and serve a revised notice or pass such other suitable orders as deemed necessary, within fifteen days from the date of receipt of the representation or objection. [Section 13(3A), Rule 3A]. [Section 13(3A), Rule 3A]. F) In case the borrower fails to discharge his liability in full within sixty days from the date of notice 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 borrower including the right to transfer by way of lease, assignment or sale for realising the secured assets; (b) take over the management of the business of the borrower, (c) appoint any person (manager), to manage the secured assets the possession of which has been taken over by the secured creditor; (d) require at any time by notice in writing, any person who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt [Section 13(4)]. G) Where the secured asset is an immovable property, the authorised officer shall take or cause to be taken possession, by delivering a possession notice prepared as nearly as possible in Appendix IV to these rules, to the borrower and by affixing the possession notice on the outer door or at such conspicuous place of the property. The format of said notice (Appendix-IV) inter alia specifically provides that public in general be informed that the Authorised Officer of the secured creditor has taken possession and the public in general is cautioned not to deal with the said property. The possession notice as referred to in sub-rule (1) shall also be published in two leading newspapers, one in vernacular language having sufficient circulation in that locality, by the authorised officer. [Rule 8(1), 8(2A)] H) In the event the possession of immovable property is actually taken by the authorised officer, such property shall be kept in his own custody or in the custody of any person authorised or appointed by him, who shall take as much care of the property in his custody as a owner of ordinary prudence would, under the similar circumstances, take of such property. The authorised officer shall take steps for preservation and protection of secured assets and insure them, if necessary, till they are sold or otherwise disposed of. [Rule 8(3), 8(4)]. The authorised officer shall take steps for preservation and protection of secured assets and insure them, if necessary, till they are sold or otherwise disposed of. [Rule 8(3), 8(4)]. I) Where the amount of dues of the secured creditor together with all costs, charges and expenses incurred by him is tendered to the secured creditor at any time before the date of publication of notice for public auction or inviting quotations or tender from public or private treaty for transfer by way of lease, assignment or sale of the secured assets,- (i) the secured assets shall no be transferred by way of lease assignment or sale by the secured creditor; and (ii) in case, any step has been taken by the secured creditor for transfer by way of lease or assignment or sale of the assets before tendering of such amount under this sub-section, no further step shall be taken by such secured creditor for transfer by way of lease or assignment or sale of such secured assets. [Section 13(8)]. J) Before effecting sale of the immovable property referred to in sub-rule (1) of rule 9, the authorised officer shall obtain valuation of the property from an approved valuer and in consultation with the secured creditor, fix the reserve price of the property. [Rule 8(5)]. K) The Authorised Officer may sell the whole or any part of such immovable secured asset by any of the following methods.:— (a) By obtaining quotations from the persons dealing with similar secured assets or otherwise interested in buying the such assets; or (b) by inviting tenders from the public; (c) by holding public auction; or (d) by private treaty. [Rule 8(5)] L) The authorised officer shall serve to the borrower a notice of thirty days for sale of the immovable secured assets, under sub-rule (5). No sale of immovable property under these rules, in first instance 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) of rule 8 or notice of sale has been served to the borrower. No sale of immovable property under these rules, in first instance 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) of rule 8 or notice of sale has been served to the borrower. [Rule 8(6), Rule 9(1)] M) If the sale of such secured asset is being effected by either inviting tenders from the public or by holding public auction, the secured creditor shall cause a public notice in the Form given in Appendix IV-A to be published in two leading newspapers one in vernacular language having wide circulation in the locality. [Rule 8(6)] N) Every notice of sale shall be affixed on the conspicuous part of the immovable property and the authorised officer shall upload the detailed terms and conditions of the sale, on the web-site of the secured creditor, which shall include (a) the description of the immovable property to be sold, including the details of the encumbrances known to the secured creditor. (b) the secured debt for recovery of which the property is to be sold. (c) reserve price of the immovable secured assets below which the property may not be sold. (d) time and place of public auction or the time after which sale by any other mode shall be completed. (e) depositing earnest money as may be stipulated by the secured creditor. (f) any other terms and conditions, which the authorised officer considers it material for a purchaser to know the nature and value of the property. [Rule 8(7)]. O) If sale of immovable property by any one of the methods specified by sub-rule (5) of rule 8 fails and sale is required to be conducted again, the authorised officer shall serve, affix and publish notice of sale of not less than fifteen days to the borrower for any subsequent sale.[proviso to Rule 9(1)]. P) Sale by any methods other than public auction or public tender, shall be on such terms as may be settled between the secured creditor and the proposed purchaser in writing. [Rule 8(8)]. Q) The sale shall be confirmed in favour of the purchaser who has offered the highest sale price in his bid or tender of quotation or offer to the authorised officer and shall be subject to confirmation by the secured creditor. [Rule 8(8)]. Q) The sale shall be confirmed in favour of the purchaser who has offered the highest sale price in his bid or tender of quotation or offer to the authorised officer and shall be subject to confirmation by the secured creditor. [Rule 9(2)] R) 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 8. [Proviso to Rule 9(2)]. S) 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. [2nd proviso to Rule 9(2)]. T) On every sale of immovable property, the purchaser shall immediately i.e., on the same day or not later than next working day, pay a deposit of twenty-five per cent of the amount of the sale price, which is inclusive of earnest money deposited, if any, to the authorised officer conducting the sale and in default of such deposit, the property shall forthwith be sold again. [Rule 9(3)]. U) 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 purchaser and the secured creditor, in any case not exceeding three months.[Rule 9(4)]. V) In default of payment within the period mentioned in sub-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. [Rule 9(5)] W) 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 sale 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. [Rule 9(6)] X) A right is given to any person (including borrower) aggrieved by any of the measures referred to in sub-Section 4 of Section 13 taken by the secured creditor or authorised officer to file Application under Section 17 of the said Act to the Debts Recovery Tribunal. [Section 17] 74. [Rule 9(6)] X) A right is given to any person (including borrower) aggrieved by any of the measures referred to in sub-Section 4 of Section 13 taken by the secured creditor or authorised officer to file Application under Section 17 of the said Act to the Debts Recovery Tribunal. [Section 17] 74. We have in detail analysed relevant provisions of said Act and Rules, namely, section 13 of the said Act and Rule 8 and 9 and other rules of the said Rules. As set out hereinabove, there are sufficient safeguards provided in the scheme of the said Act and said Rules and it cannot be said that unregulated or unfettered and arbitrary rights are conferred on the secured creditors or authorised officer (except one aspect regarding sale by private treaty, without making attempt to sale the property by public auction or without inviting public tender, which we will discuss later). 75. It is specifically provided that sale cannot take place for an amount which is less than the reserve price and if it is to be for less than reserve price then the consent of borrower is necessary. The Rules do not provide unlimited time, if determined by secured creditors/authorised officer and the borrower for making payment. The said period cannot exceed three months for payment of balance 75% of purchase price and the initial 25% of the amount of sale price is required to be deposited on the same day of the sale or not later than next working day. The sale cannot be done without giving 30 days notice, if the sale is at the first instance or not less than 15 days for subsequent sale. There are other safeguards provided as enumerated hereinabove. Therefore, it cannot be said that arbitrary or excessive powers are conferred on the secured creditor/authorised officer except one aspect which we will discuss later on. 76. The amendment to Rule 8(8) which is impugned in the Petition has been effected by notification dated 3rd November 2016. Sub-Rule 7 of Rule 8 of the said Rules is substituted by GSR 1040(E) dated 17th October 2018. The said sub-rule 7 of Rule 8 is very important and relevant for considering the challenge to the amended Rule 8(8). It is very important to note that the said sub-Rule 7 was amended after amendment of Rule 8(8). Sub-Rule 7 of Rule 8 of the said Rules is substituted by GSR 1040(E) dated 17th October 2018. The said sub-rule 7 of Rule 8 is very important and relevant for considering the challenge to the amended Rule 8(8). It is very important to note that the said sub-Rule 7 was amended after amendment of Rule 8(8). The said sub-rule 7 contemplates that every notice of sale shall be affixed on the conspicuous part of the immovable property and also that the authorised officer shall upload the details of terms and conditions of the sale on the website of the secured creditor. Sub-Rule 7 also specifies the details which should be mentioned in notice of sale. It is also significant to note that when Rule 8 (8) was amended, by same GSR dated 3rd November, 2016, Rule 9 (1) was amended by providing that notice of sale has to be served on the borrower (30 days for first sale and 15 days for subsequent sale). Thus, although as per amended Rule 8 (8), for sale by obtaining quotations or by private treaty, the terms are required to be settled between the secured creditor and proposed purchaser in writing, and therefore, obviously the borrower will not be a party to such terms, however, the rules do not contemplate that such terms which are to be arrived at in writing between the secured creditor and proposed purchaser are to be kept secret. In fact, such terms also will have to be in consonance with the said Rules, namely, sale cannot be below the reserve price, the sale cannot be without giving notice to the borrower of 30 days (in case sale is at the first instance) or of 15 days (for subsequent sale). The sale has to be in favour of the purchaser who has offered highest sale price. The deposit of 25% is to be made immediately i.e. on the same day or not later than next working day. The deposit of balance 75% of the purchase price has to be paid within 15 days or extended period which in any case shall not exceed three months. In case of default, the amount has to be forfeited. The deposit of 25% is to be made immediately i.e. on the same day or not later than next working day. The deposit of balance 75% of the purchase price has to be paid within 15 days or extended period which in any case shall not exceed three months. In case of default, the amount has to be forfeited. Every notice of sale shall be required to be uploaded with detailed terms and conditions of sale on the website of the secured creditor and also to be served on borrower and shall be affixed on the conspicuous part of the immovable property. 77. Rule 8(7) provides that “Every notice of Sale” shall contain detailed terms and conditions of sale and the same shall include description of the immovable property, details of the security debt of the borrower, reserve price of the secured asset, time and place after which inter alia sale by private treaty can be completed, deposit of earnest money and any other terms and conditions. It is significant to note that Rule 9(2) inter alia contemplates that sale shall be confirmed in favour of the purchaser who has offered highest price in offer by way of private treaty to the authorised officer. Thus, what is contemplated is that even in case of sale by private treaty the offers can be received not from one party but from several parties. In view of this what is essential to mention in notice contemplated under Rule 8(7) is the offer received by the secured creditor from the intending purchaser who has offered to purchase the secured asset in the sale to be conducted by private treaty. This is important as the borrower can bring the purchaser willing to purchase the secured asset by private treaty for higher amount. This is absolutely legally permissible as the scheme of the Act and the Rules contemplate that even in case of sale by private treaty offers can be given by more than one intending purchaser and highest offer should be accepted. The same is also in consonance with the object of the said Act and said Rules. This is also important to ensure transparency in the private treaty. One of the object of the said Act and said Rules is to ensure sale of the secured asset in transparent manner and to make efforts to sell the same for higher price. 78. This is also important to ensure transparency in the private treaty. One of the object of the said Act and said Rules is to ensure sale of the secured asset in transparent manner and to make efforts to sell the same for higher price. 78. It is thus clear that, although borrower cannot be a party to the terms of sale, the said terms cannot be arbitrarily fixed and such terms as settled between the secured creditor and the proposed purchaser in writing cannot be kept secret. We have held that the borrower should be informed about the price which the prospective purchaser has offered for proposing to purchase the property by public auction. 79. The analysis of the scheme of Section 13 of the said Act r/w. Rule 3, 3A, 8 and 9 as regards sale of immovable property shows that very elaborate procedure is prescribed. The rights of all concerned namely secured creditor, borrower and purchasers are protected (except in one situation namely sale by private treaty if conducted at the first instance itself without making efforts to sell the same by public auction or by inviting tenders). The procedure broadly contemplates following:— (a) The borrower is required to be classified as non-performing asset. (b) 60 days notice is required to be given to the borrower. (c) After receipt of notice, borrower has got right to file representation/objection. If there is substance in the representation/objection of the borrower then demand notice is required to be modified. (d) Measures to recover security debt as contemplated under Section 13(4) can be taken only if borrower fails to discharge his liability in full within 60 days. (e) Before effecting sale valuation is required to be obtained. (f) Every notice of sale (30 days in case of first sale or 15 days in case of subsequent sale) is required to be served on borrower and also to be published on website by giving required particulars including reserve price fixed and the terms and conditions of sale. Rule 8(7) provides that “Every notice of Sale” shall contain detailed terms and conditions of sale and the same shall include description of the immovable property, details of the security debt of the borrower, reserve price of the secured asset, time and place after which inter alia sale by private treaty can be completed, deposit of earnest money and any other terms and conditions. What is essential to mention in notice contemplated under Rule 8(7) is the offer received by the secured creditor from the intending purchaser who has offered to purchase the secured asset in the sale to be conducted by private treaty. This is important as the borrower can bring the purchaser willing to purchase the secured asset by private treaty for higher amount. (g) Before the date of publication of notice of sale if the borrower pays the amount of dues of the secured creditor together with all costs, charges and expenses incurred by the secured creditor then no further steps shall be taken. (h) Sale is required to be confirmed in favour of purchaser who has offered highest price. (i) No sale can be confirmed if sale price is less than reserved price. (j) On sale of immovable property, the purchaser shall on same day or not later than next working day deposit 25% of the amount of the sale price and balance amount to be paid within 15 days of confirmation of sale or period which can not exceed beyond 3 months. In case of default, amount deposited, if any is forfeited and property is liable to be resold. (k) All these measures taken by Secured Creditor/Authorised Officer can be challenged by filing application under Section 17 of the said Act. 80. Thus, it is clear that very elaborate procedure is prescribed and the rights of all concerned including borrower are protected as noted above. Thus, there is no substance in the contention that unfettered/arbitrary powers are given to the Secured Creditor/Authorised Officer. However it is required to be noted that if sale by private treaty is conducted at the first instance itself i.e. without making efforts to sell the same by public auction or by inviting tenders, the same will amount to conferring unfettered and arbitrary powers on the secured creditor/authorised officer. Said amended Rule 8(8) is not per se unconstitutional. However the stage when said amended Rule 8(8) is invoked is very crucial and important. If the said Rule is invoked at the first instance, then in view of absence of public notice and as public participation is denied, the same will amount to conferring unfettered, arbitrary and excessive powers on the secured creditor/authorised officer resulting into destroying the object of the said Act. 81. If the said Rule is invoked at the first instance, then in view of absence of public notice and as public participation is denied, the same will amount to conferring unfettered, arbitrary and excessive powers on the secured creditor/authorised officer resulting into destroying the object of the said Act. 81. It is well established that absence of the arbitrary power is essential for Rule of law. In the system governed by the Rule of law when the discretion is conferred upon the executive authority, the same be confined within clearly defined limits. The discretion means sound discretion guided by law. Such discretion should not be arbitrary, vague and fanciful. Our analysis of relevant provisions, namely, section 13 and Rule 8 and 9 and other Rules clearly show that the powers conferred on the secured creditor/authorised officer are not arbitrary except in one situation. The limits of discretion conferred are clearly defined. The factors set out hereinabove by analyzing section 13 as well as Rule 8 and 9 and other Rules clearly show that the discretion conferred on the secured creditor/authorised officer is within clearly defined limits except one situation. The said defined limits of discretion are not arbitrary, vague and fanciful. The power conferred on the secured creditor/authorised officer cannot be said to be arbitrary. The power conferred can not be said to be unregulated by any Rule or principle and it cannot be said that power is left entirely to the discretion of secured creditor/authorised officer to do anything they like without any check or control by any higher authority. Thus, the scheme as contemplated in section 13 read with Rule 8 and 9 of the said Rules, if examined on the basis of settled legal position as set out hereinabove regarding the effect of powers given to executive authorities it cannot be said that unfettered and arbitrary powers are conferred on the secured creditors/authorised officers except in one eventuality. 82. There is one situation where it can be said that unfettered and arbitrary powers are conferred on the secured creditors/authorised officers. The scheme as contemplated by the said Act read with said Rules as regards sale by private treaty contemplate that the secured asset can be sold by private treaty at the first instance itself i.e. without conducting sale by public auction or by inviting tender. The scheme as contemplated by the said Act read with said Rules as regards sale by private treaty contemplate that the secured asset can be sold by private treaty at the first instance itself i.e. without conducting sale by public auction or by inviting tender. In that case also there are certain safeguards provided, however they are not sufficient enough so that we can conclude that no unfettered and arbitrary powers are conferred on the secured creditor/authorised officer. We will discuss about said certain safeguards when discussing point no. 2 hereinbelow. 83. It is required to be kept in mind that the object behind allowing secured creditor to sell the secured assets is to ensure that by liquidating the secured assets, the dues of the secured creditors are fully satisfied or substantially satisfied. The liability of the borrower continues till the dues of the secured creditors are completely satisfied. [Section 13(10) of the Act]. Thus it is absolutely essential that the secured creditor should take appropriate steps to ensure that maximum price is fetched by sale of the secured asset. 84. It is settled position that the way to fetch higher possible market price in transparent manner is by selling the property by public auction. The Supreme Court in Kerala Financial Corporation v. Vincent Paul, (2011) 4 SCC 171 while considering the sale of properties belonging to the State by similar four modes as contemplated by Rule 8(5) held that among the said four modes, inviting tenders from the public or holding public auction is the best method for disposal of the properties belonging to the State. 85. The Supreme Court in Lakshmanasami Gounder v. C.I.T., Selvamani, (1992) 1 SCC 91 have held as follows:— “Public auction is one of the modes of sale intending to get highest competitive price for the property. Public auction also ensures fairness in actions of the public authorities or the sale officers who should act fairly, objectively and kindly. Their action should be legitimate. Their dealing should be free from suspicion. Nothing should be suggestive of bias, favouri-tism, napotism or beset with suspicious fea-tures of underbidding detrimental to the legitimate interest of the debtor. The fair and objective public auction would relieve the public authorities or sale officers from above features and accountability. Any infraction in this regard would render the sale invalid.” 86. Their dealing should be free from suspicion. Nothing should be suggestive of bias, favouri-tism, napotism or beset with suspicious fea-tures of underbidding detrimental to the legitimate interest of the debtor. The fair and objective public auction would relieve the public authorities or sale officers from above features and accountability. Any infraction in this regard would render the sale invalid.” 86. Thus, it is settled position that holding public auction is one of the modes of sale to get highest competitive price. 87. Rule 8(6) provides that if sale of such secured asset is being effected by either inviting tenders from the public or by holding public auction, public notice in the prescribed format is required to be issued in two leading newspapers - one in vernacular language having wide circulation in the locality. Thus if sale is conducted at the first instance itself by private treaty then there will not be any public notice and therefore in absence of wide publicity resulting into less participation, there is likelihood that maximum possible market price may not be fetched. It is important to note at this stage that the sale by private treaty contemplated by said Act and said Rules envisages submission of offers with Secured Creditor/Authorised Officer by more than one prospective purchaser and highest such offer is to be accepted, subject to the same being higher than the reserve price. In any case, when the sale is by private treaty at first instance itself, the public notice will not be issued and in such eventuality there is no question of sale by public auction which will affect credibility of the process of sale by secured creditor/authorised officer. Thus the same will be contrary to object of the said Act and Rules which is to ensure that the maximum possible price is fetched by sale of secured assets. In that case the impugned amended Rule 8(8) will attract criticism that unfettered and arbitrary powers are conferred on the secured creditor/authorised officers. In such a scenario the said amended Rule 8(8) will become unconstitutional. 88. The statement of object and reasons of the said Act show that the said Act was enacted for empowering the banks and financial institutions i.e. the secured creditors to take possession of the secured assets and to sell them without the intervention of the Court. In such a scenario the said amended Rule 8(8) will become unconstitutional. 88. The statement of object and reasons of the said Act show that the said Act was enacted for empowering the banks and financial institutions i.e. the secured creditors to take possession of the secured assets and to sell them without the intervention of the Court. Section 13(1) r/w. Section 13(4) inter alia provide that security interest created in favour of any secured creditor may be enforced, without the intervention of the Court or Tribunal and for that purpose secured creditor has been empowered to take possession and to transfer by way of lease, assignment or sale for realising the secured assets. Section 13(6) of the said Act, inter alia provides that any transfer of secured asset by the secured creditor after taking possession thereof shall vest in the transferee all rights in the secured assets transferred as if the transfer has been made by the owner of such secured asset. Thus, it is clear that by said legislative fiction, the secured creditor is deemed to be the owner of the secured asset for enforcement of securities. By said legal fiction, the secured asset vests in the secured creditor and secured creditor will be entitled to transfer clear title to the transferee with respect to the secured asset. 89. Section 13(8) of the said Act read with Rule 8(5) of the said Rules provides that secured asset can be sold by the secured creditor/authorised officer by any of the following methods:— (a) By obtaining quotations from the persons dealing with similar secured assets or otherwise interested in buying such assets; or (b) by inviting tenders from the public; (c) by holding public auction; or (d) by private treaty. 90. The Supreme Court, in Kerala Financial Corporation (supra) and in Lakshmanasami Gounder (supra) held that inviting tenders from the public or holding public auction is the best method for disposal of the public properties. It has been held that holding public auction is one of the modes of sales to get highest competitive price. 91. 90. The Supreme Court, in Kerala Financial Corporation (supra) and in Lakshmanasami Gounder (supra) held that inviting tenders from the public or holding public auction is the best method for disposal of the public properties. It has been held that holding public auction is one of the modes of sales to get highest competitive price. 91. The following mandatory requirements clearly show that what is contemplated under the scheme of the said Act and the said Rules is that the secured creditor/authorised officer shall take maximum possible efforts to see that the secured asset is sold for highest possible price:— (a) obtaining valuation of the property from an approved valuer and fixing the reserved price of the same [Rule 8(5)] (b) Every notice of sale shall mention reserve price of the immovable secured asset. [Rule 8 (7)] (c) Sale shall be confirmed in favour of the purchaser who has offered the highest sale price [Rule 9(2)] (d) No sale shall be confirmed if the amount offered by sale price is less than the reserved price, except with the consent of the borrower [Rule 9(2)]. 92. All these provisions clearly show that what is contemplated under the said Act and the said Rules is that the secured creditor/authorised officer shall take maximum possible efforts to see that the secured asset is sold for highest possible price. 93. As discussed hereinabove when the sale is by private treaty at first instance itself, the public notice will not be issued resulting into depriving the public participation in sale which will affect credibility of the process of sale conducted by secured creditor/authorised officer. Thus the same will be contrary to object of the said Act and Rules which is to ensure that all efforts should be taken to fetch maximum possible price by sale of secured assets. In that eventuality the impugned amended Rule 8(8) can be conferring unfettered and arbitrary powers on the secured creditor/authorised officers. In such a scenario the said amended Rule 8(8) will become unconstitutional. 94. However it is well settled that to save a statutory provision from the vice of unconstitutionality sometimes a restricted or extended interpretation of the statute has to be given. In such a scenario the said amended Rule 8(8) will become unconstitutional. 94. However it is well settled that to save a statutory provision from the vice of unconstitutionality sometimes a restricted or extended interpretation of the statute has to be given. This is because it is a well settled principle of interpretation that the Court should make every effort to save a statute from becoming unconstitutional and an another interpretation will be constitutional, then the Court should prefer the later on the ground that the legislature is presumed to not have intended to have exceeded its jurisdiction. Sometimes to uphold the constitutional validity the statutory provision has to be read down. 95. In case of M. Rathinaswami v. State of Tamil Nadu, (2009) 5 SCC 625 the Supreme Court considered this in paragraphs 28 and 29 of the said judgment which read as under:— “28. It is a well settled principle that to save a statutory provision from the vice of unconstitutionally sometimes a restricted or extended interpretation of the statute has to be given. This is because it is a well settled principle of interpretation that the Court should make every effort to save a statute from becoming unconstitutional. If on giving one interpretation the statute becomes unconstitutional and on another interpretation it will be constitutional it will be constitutional, then the Court prefer the latter on the ground that the legislature is presumed to not have intended to have exceeded its jurisdiction. 29. Sometimes to uphold that constitutional validity the statutory provision has to be read down. Thus in Umayal Achi v. Lakshmi Achi, the Federal Court was considering the validity of the Hindu Women's Right to Property Act, 1937. In order to uphold the constitutional validity of the Act, the Federal Court held the Act intra vires by construing the word “property” as meaning “property other than agricultural land”. The restricted interpretation of the word “property” had to be given otherwise the Act would have become unconstitutional.” (Emphasis added) 96. The Supreme Court also considered this aspect in Yogendra Kumar Jaiswal v. State of Bihar (2016) 3 SCC 183 . The relevant paragraphs are paragraphs 97 to 103, the same are reproduced hereinbelow for ready reference: “97. In Union of India v. Sankalchand Himatlal Sheth, Bhagwati, J. opined as follows : - (SCC p. 241, para 54) “54. The Supreme Court also considered this aspect in Yogendra Kumar Jaiswal v. State of Bihar (2016) 3 SCC 183 . The relevant paragraphs are paragraphs 97 to 103, the same are reproduced hereinbelow for ready reference: “97. In Union of India v. Sankalchand Himatlal Sheth, Bhagwati, J. opined as follows : - (SCC p. 241, para 54) “54. … I mean it in its widest sense ‘as including not only other enacting provisions of the same statute but its Preamble, the existing state of the law, other statutes in pari materia and the mischief which - the statute was intended to remedy’.” 98. The concept of context has also been emphasised in Maharaj Singh v. State of U.P. 99. Apart from the aforesaid interpretation, we are also of the view that regard being had to the text, context and the legislative intendment, the principle of reading down can be applied to save it from the constitutional invalidity. May it be mentioned that there are certain authorities which have held that such provisions are valid when the power is vested with high authority and there is guidance in the language employed in the provision. But we prefer to take this route as we find the legislature never intended to leave any offender. In Shreya Singhal v. Union of India, the Court upheld the constitutional validity of Section 79 of the Information Technology Act, 2000 subject to Section 79(3)(b) by stating as follows : - (SCC p. 181, para 124) “124.3. Section 79 is valid subject to Section 79(3)(b) being read down to mean that an intermediary upon receiving actual knowledge from a court order or on being notified by the appropriate government or its agency that unlawful acts relatable to Article 19(2) are going to be committed then fails to expeditiously remove or disable access to such material. Similarly, the Information Technology Intermediary Guidelines Rules, 2011 are valid subject to Rule 3 sub-rule (4) being read down in the same manner as indicated in the judgment.” 100. A passage from DTC v. Mazdoor Congress is also fruitful to extract : - (SCC p. 728, para 255) “255. … the doctrine of reading down or of recasting the statute can be applied in limited situations. It is essentially used, firstly, for saving a statute from being struck down on account of its unconstitutionality. A passage from DTC v. Mazdoor Congress is also fruitful to extract : - (SCC p. 728, para 255) “255. … the doctrine of reading down or of recasting the statute can be applied in limited situations. It is essentially used, firstly, for saving a statute from being struck down on account of its unconstitutionality. It is an extension of the principle that when two interpretations are possible-one rendering it constitutional and the other making it unconstitutional, the former should be preferred. The unconstitutionality may spring from either the incompetence of the legislature to enact the statute or from its violation of any of the provisions of the Constitution. The second situation which summons its aid is where the provisions of the statute are vague and ambiguous and it is possible to gather the intentions of the legislature from the object of the statute, the context in which the provision occurs and the purpose for which it is made.” 101. In Suresh Kumar Koushal v. Naz Foundation, the Court held that : - (SCC p. 51, para 40) “40. Another significant canon of determination of constitutionality is that the courts would be reluctant to declare a law invalid or ultra vires on account of unconstitutionality. The courts would accept an interpretation, which would be in favour of constitutionality rather than the one which would render the law unconstitutional. Declaring the law unconstitutional is one of the last resorts taken by the courts. The courts would preferably put into service the principle of ‘reading down’ or ‘reading into’ the provision to make it effective, workable and ensure the attainment of the object of the Act.” 102. In Calcutta Gujarati Education Society v. Calcutta Municipal Corporation, it has been held that : - (SCC p. 552, para 35) “35. The rule of ‘reading down’ a provision of law is now well recognised. It is a rule of harmonious construction in a different name. It is resorted to smoothen the crudities or ironing out the creases found in a statute to make it workable. In the garb of ‘reading down’, however, it is not open to read words and expressions not found in it and thus venture into a kind of judicial legislation. It is a rule of harmonious construction in a different name. It is resorted to smoothen the crudities or ironing out the creases found in a statute to make it workable. In the garb of ‘reading down’, however, it is not open to read words and expressions not found in it and thus venture into a kind of judicial legislation. The rule of reading down is to be used for the limited purpose of making a particular provision workable and to bring it in harmony with other provisions of the statute. It is to be used keeping in view the scheme of the statute and to fulfill its purposes. 103. We have referred to the aforesaid authorities only to highlight that the interpretation placed by us can come within both the conceptions, namely, textual and contextual interpretation as well as also reading down the provision to save it from unconstitutionality. Be it stated, by such reading down no distortion is caused.” (Emphasis added) 97. Thus, it has been held by the Supreme Court that the doctrine of reading down or of recasting the statute can be applied for saving the statute from being struck down on account of its unconstitutionality. The Court would accept the interpretation which would be in favour of constitutionality rather than one which would render the law unconstitutional. The doctrine of “reading down” or “reading in to” the provision is to make it effective, workable and to ensure the attainment of the object of the Act. It is a rule of harmonious construction. Rule of “reading down” is to be used for the limited purpose of making a particular provision workable and to bring it in harmony with other provisions of the statute. It is to be used keeping in view the scheme of the statute and to fulfill its purpose. 98. We will examine the scheme of the said Act and Rules in the light of the above principles laid down by the Supreme Court. The statement of objects and reasons of the said Act inter alia records that the provision of the said Act are enacted to enable banks and financial institutions to improve recovery of secured debt by exercising powers to take possession of the securities, sell them and reduce non performing assets by adopting measures for recovery. The statement of objects and reasons of the said Act inter alia records that the provision of the said Act are enacted to enable banks and financial institutions to improve recovery of secured debt by exercising powers to take possession of the securities, sell them and reduce non performing assets by adopting measures for recovery. Therefore, it is clear that the provisions of the said Act and said Rules are inter alia enacted for the purpose of improving recovery from the borrower by exercising power of taking possession of the securities and sell them. This power is to be used for the purpose of recovery. Thus, what is contemplated by the said Act and said Rules is that banks and financial institutions i.e. secured creditors should act in such a manner to get maximum possible market price by selling the secured assets. As already held it is well established that to secure maximum market price the best method is public auction or by inviting public tender. Thus allowing sale by private treaty without failure of sale by method of public auction or by inviting public tender will be violative of the object of the said Act and said Rules of ensuring receipt of maximum possible price by sale of the secured asset. In that case, the said amended Rule 8(8) will become unconstitutional as unfettered and arbitrary powers are conferred on them to that extent. Thus to save the said amended Rule 8(8) from unconstitutionality on the ground that unfettered and arbitrary powers are given to secured creditors/authorised officers it is necessary to read down the same or to read into the same that sale by private treaty can be conducted only if sale by inviting tenders from the public or by holding public auction fails. This is necessary to make the Rule 8(8) effective, workable and also to ensure the attainment of the object of the Act. This is also necessary to bring Rule 8(8) in harmony with the other provisions of the statute. This is necessary to make the Rule 8(8) effective, workable and also to ensure the attainment of the object of the Act. This is also necessary to bring Rule 8(8) in harmony with the other provisions of the statute. By reading down or reading into Rule 8(8) that sale by private treaty can be conducted only if sale by inviting tenders from the public or by holding public auction fails, the same is in furtherance of the scheme of the said Act and to fulfill its purpose namely that secured creditors should act in such a manner to get maximum possible market price by selling the secured assets. 99. In view of above discussion as we have read down or read into Rule 8(8) that the sale by private treaty can be conducted only after sale by inviting tenders from the public or by holding public auction fails, it cannot be said that unfettered and arbitrary powers are given to the Secured Creditor/Authorised Officer by the amended Rule 8(8). 100. Point No. 2 : - The sale by private treaty can be conducted even at the first instance, for any price and on terms and conditions which proposed purchaser and secured creditor agrees. 101. Mr. Thakkar, the learned Senior Counsel on behalf of the petitioner very vehemently submitted that as a result of the impugned amended rule by which the terms of sale can be settled by the secured creditor and the proposed purchaser and as the borrower is not involved in the said process, the sale by private treaty can be conducted even at the first instance, for any price and on terms and conditions which proposed purchaser and secured creditor agrees. Mr. Thakkar submitted that therefore arbitrary power is given to the secured creditor and purchaser. 102. Mr. Thakker, the learned senior counsel is right in contending that the power to conduct sale by private treaty can be exercised at any time i.e. even at the first instance. However, his contention that sale by private treaty can be conducted in any manner desired by the secured creditor or authorised officer and the purchaser and at the price which they think to be appropriate and on terms which they think proper is not correct. However, Mr. Thakker is right to certain extent which aspect we have elaborately discussed while considering point no. 1. 103. However, Mr. Thakker is right to certain extent which aspect we have elaborately discussed while considering point no. 1. 103. It is true that the immovable property can be sold for enforcement of security interest of the secured creditor by following methods as envisaged under section 13(8) as well as sub-rule (5) of Rule 8: (i) By obtaining quotations from the persons dealing with similar secured assets or otherwise interested in buying such assets; (ii) By inviting tenders by the public; (iii) By holding public auction; or (iv) By private treaty. 104. Subject to our discussion on point no. 1, it is also possible that without first inviting tenders from the public or by holding public auction the property can be sold by obtaining quotations from the persons dealing with similar secured assets or by private treaty. In that situation also some safeguards are provided. However it is to be noted that the said safeguards are not sufficient to ensure that the secured asset fetches the maximum possible market rate, which is one of the object of the said Act read with said Rules. The said limited safeguards can be enumerated as follows: (a) The Authorised Officer is mandatorily required to obtain valuation of the property from the approved valuer and in consultation with the secured creditor required to fix the reserved price of the property. [Rule 8(5)]. (b) The Authorised Officer shall serve to the borrower a notice of 30 days for sale of the immovable secured assets (as the sale is at first instance). However, no public notice is required to be issued as sale is not by holding public auction or by inviting tenders from the public. [Rule 8(6)]. (c) Every such notice of sale shall be affixed on the conspicuous part of the immovable property and the authorised officer shall upload the detail terms and conditions of the sale on the website of the secured creditor which shall include the description of the immovable property to be sold including details of the encumbrances known to the secured creditor, the secured debt for recovery of which the property is to be sold, reserve price, deposit of earnest money as stipulated by the secured creditor and any other terms. [Rule 8(7)]. [Rule 8(7)]. (d) No sale of immovable property under these rules in first instance shall take place before the expiry of 30 days from the date on which notice of sale has been served to the borrower. In case of subsequent sale such notice is of 15 days. [Rule 9(1)]. (e) It is very important to note that in case the authorised officer fails to obtain price higher than the reserve price then sale cannot be confirmed and the same can be confirmed only with the consent of borrower and of the secured creditor. [Rule 9(2)]. (f) On sale of immovable property, the purchaser shall immediately i.e. on the same day or not later than next working day pay a deposit of 25% of the amount of sale price. [Rule 9(3)]. (g) The balance amount of purchase price payable shall be paid by the purchaser to the authorised officer on or before 15 days of confirmation of the sale of immovable property or such extended period as may be agreed upon in writing between the purchaser and the secured creditor and such period shall not exceed three months. [Rule 9(4)]. (h) In default of payment within the period mentioned in sub-rule (4) the deposit shall be forfeited and the property shall be resold and the defaulting purchaser shall forfeit to the secured creditor all claims to the property or to any part of the same for which it may be subsequently sold. [Rule 9(5)] (i) All actions of the secured creditor/authorised officer can be challenged by filing proceedings under section 17 of the said Act. 105. Thus, assuming that even the first sale is by private treaty then also above safeguards are provided in the said Rules. However it is to be noted that in sale by private treaty, notice to borrower is only contemplated and obviously public notice is not required to be issued. The said public notice is contemplated only for sale by public auction or by inviting tenders from the public. It is settled position that to ensure receipt of maximum possible price by sale of secured asset, the best possible way is sale by public auction or by inviting tenders from the public. The said public notice is contemplated only for sale by public auction or by inviting tenders from the public. It is settled position that to ensure receipt of maximum possible price by sale of secured asset, the best possible way is sale by public auction or by inviting tenders from the public. The scheme as envisaged by Section 13 read with Rules 8 and 9 of the said Rules clearly contemplates taking maximum efforts by the secured creditor for obtaining maximum possible best price by sale of the secured asset. To achieve that objective, it is necessary to read down or read into amended Rule 8(8) as done by us while discussing point no. 1. Thus subject to reading down or read into said amended Rule 8(8) in the manner as done by us in earlier part of this judgment, it is clear that the powers conferred on the Secured Creditor/Authorised Officer are not arbitrary and the discretion conferred on them is not unguided and the discretion conferred on them is within the defined parameters. We have also observed in earlier part of the judgment that the notice to be given of every sale to the borrower as per Rule 8(7) in case of sale by private treaty should contain the price which is offered by the intending purchaser. Thus there is no substance in the contention of the petitioner that the amended Rule 8(8) gives unfettered and arbitrary powers to the secured creditor/authorised officer to sale property of the borrower/owner at any price and terms which are agreed between the secured creditor and borrower. We make it clear that this conclusion is arrived at only in view of reading into the said Rule 8(8) that sale by private treaty can be conducted only after sale by inviting tenders from the public or by holding public auction fails. 106. Point No. 3 : The impugned amendment is enacted to nullify the judgment of the Supreme Court in the case of Mathew Varghese (supra) and General Manager, Sri. Siddheshwara Co-operative Bank Ltd. (supra). 107. Mr. Thakkar, the learned Senior Counsel appearing for the Petitioner strongly relied on the interpretation of the unamended Rule 8(8) of the said Rules in Mathew Varghese (supra) and General Manager, Sri. Siddheshwar Co.-op Bank Ltd. (supra). Siddheshwara Co-operative Bank Ltd. (supra). 107. Mr. Thakkar, the learned Senior Counsel appearing for the Petitioner strongly relied on the interpretation of the unamended Rule 8(8) of the said Rules in Mathew Varghese (supra) and General Manager, Sri. Siddheshwar Co.-op Bank Ltd. (supra). In Mathew Verghese, the Supreme Court held that the word “parties” in unamended Rule 8(8) will include only the secured creditor and the borrower. In General Manager, Sri. Siddheshwar Co.-op Bank Ltd. (supra), it has been held that the “parties in writing” as appearing in unamended Rule 8(8) means “the secured creditor, borrower and auction purchaser”. He submitted that, the said amendment which is contrary to the said Judgments is impermissible and therefore, has to be held as unconstitutional. 108. Mr. Thakker, learned Senior Counsel pointed out para 53 of Mathew Verghese (supra). The relevant portion of said paragraph 53 is reproduced hereinbelow: 53…… 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. 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.” (Emphasis added) 109. Mr. Thakkar, learned senior counsel relied on the judgment of the Supreme Court in the matter of Chief Manager, Sri. 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.” (Emphasis added) 109. Mr. Thakkar, learned senior counsel relied on the judgment of the Supreme Court in the matter of Chief Manager, Sri. Siddeshwara Co.-operative Bank Ltd. (supra) and particularly on paragraph 14 of the same. The said paragraph 14 is reproduced hereinbelow for ready reference: “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 2012 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 means nothing more than a manifestation of mutual assent in writing. The word “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.” (Emphasis added) 110. Mr. Thakker, the learned Senior Counsel submitted that thus the word “parties” as in unamended Rule 8(8) interpreted to mean secured creditor, borrower and auction purchaser. He submitted that the impugned amendment is enacted to nullify the said judgment. 111. Mr. Thakker, the learned Senior Counsel submitted that thus the word “parties” as in unamended Rule 8(8) interpreted to mean secured creditor, borrower and auction purchaser. He submitted that the impugned amendment is enacted to nullify the said judgment. 111. On the other hand, the learned Senior Counsel appearing for the Respondents submitted that by amendment to the Rule the basis of observation in the judgments of Hon'ble Supreme Court has been removed and the said decisions are not pivotal. It is submitted that this legislative exercise is permissible and within the legislative competence. To substantiate this contention, reliance is placed on number of decisions. The Supreme Court in Union of India v. Exide Industries Limited, (supra) in paragraphs 47 to 50 has discussed this aspect of the matter. The said paragraphs are reproduced hereinbelow for ready reference:— “47. It is no doubt true that that the legislature cannot sit over a judgment of this Court or so to speak overrule it. There cannot be any declaration of invalidating a judgment of the Court without altering the legal basis of the judgment as a judgment is delivered with strict regard to the enactment as applicable at the relevant time. However, once the enactment itself stands corrected, the basic cause of adjudication stands altered and necessary effect follows the same. A legislative body is not supposed to be in possession of a heavenly wisdom so as to contemplate all possible exigencies of their enactment. As and when the legislature decides to solve a problem, it has multiple solutions on the table. At this stage, the Parliament exercises its legislative wisdom to shortlist the most desirable solution and enacts a law to that effect. It is in the nature of a ‘trial and error’ exercise and we must note that a law-making body, particularly in statutes of fiscal nature, is duly empowered to undertake such an exercise as long as the concern of legislative competence does not come into doubt. Upon the law coming into force, it becomes operative in the public domain and opens itself to any review under Part III as and when it is found to be plagued with infirmities. Upon being invalidated by the Court, the legislature is free to diagnose such law and alter the invalid elements thereof. In doing so, the legislature is not declaring the opinion of the Court to be invalid.” 48. Upon being invalidated by the Court, the legislature is free to diagnose such law and alter the invalid elements thereof. In doing so, the legislature is not declaring the opinion of the Court to be invalid.” 48. In Welfare Ass. v. Ranjit P. Gohil, this Court relied upon Indian Aluminium Co. v. State of Kerala and upon elaborate analysis, laid down certain principles to preserve the delicate balance of separation of powers and observed thus : (Welfare Assn. Case, SCC p.386, para 47) “47. …(v) in exercising legislative power, the legislature by mere declaration, without anything more, cannot directly overrule, revise or override a judicial decision. It can render judicial decision ineffective by enacting valid law on the topic within its legislative field fundamentally altering or changing its character retrospectively. The changed or altered conditions are such that the previous decision would not have been rendered by the court, if those conditions had existed at the time of declaring the law as invalid…. It is competent for the legislature to enact the law with retrospective effect; (vi) the consistent thread that runs through all the decisions of this Court is that the legislature cannot directly overrule the decision or make a direction as not binding on it but has power to make the decision ineffective by removing the base on which the decision was rendered, consistent with the law of the Constitution and the legislature must have competence to do the same.” 49. The Court then relied upon State of T.N. v. Arooran Sugars Ltd. to reaffirm the point and noted thus : (Welfare Assn. Case, SCC p.386-87, para 48) “48. In State of T.N. v. Arooran Sugars Ltd., the Constitution Bench made an exhaustive review of all the available decisions on the point and summed up the law by holding : (SCC p.341, para 16) “16… It is open to the legislature to remove the defect pointed out by the court or to amend the definition or any other provision of the Act in question retrospectively. In this process it cannot be said that there has been an encroachment by the legislature over the power of the judiciary. A court's directive must always bind unless the conditions on which it is based are so fundamentally altered that under altered circumstances such decisions could not have been given. In this process it cannot be said that there has been an encroachment by the legislature over the power of the judiciary. A court's directive must always bind unless the conditions on which it is based are so fundamentally altered that under altered circumstances such decisions could not have been given. This will include removal of the defect in a statute pointed out in the judgment in question, as well as alteration or substitution of provisions of the enactment on which such judgment is based, with retrospective effect. 50. In Indian Aluminium Co., the Court relied upon a set of authorities and extended its approval to the above stated position of law thus : (SCC p.657, para 41) “41. … A Constitution Bench of this Court had held that the distinction between legislative act and judicial act is well-known. The adjudication of the rights of the parties is a judicial function. The legislature has to lay down the law prescribing the norms or conduct which will govern the parties and transactions to require the court to give effect to that law. Validating legislation which removes the norms of invalidity of action or providing remedy is not an encroachment on judicial power. Statutory rule made under the proviso to Article 309 was upheld. The legislature cannot by a bare declaration without anything more, directly overrule, reverse or override a judicial decision at any time in exercise of the plenary power conferred on the legislature by Articles 245 and 246 of the Constitution. It can render a judicial decision ineffective by enacting a valid law on a topic within its legislative field, fundamentally altering or changing with retrospective, curative or nullifying effect, the conditions on which such a decision is based. In Hari Singh v. Military Estate Officer, prior to 1958 two alternative modes of eviction under Public Premises Act were available. When the eviction was sought of an unauthorised occupant by summary procedure the constitutionality thereof was challenged and upheld. The Act was subsequently amended in 1958 with retrospective operation from 16-9-1958, 1958. Thereunder only one procedure for eviction was available. It was contended to be a legislative encroachment of judicial power. A Bench of three Judges held that the legislature possessed competence over the subject matter and the Validation Act could remove the defect which the court had found in the previous case. Thereunder only one procedure for eviction was available. It was contended to be a legislative encroachment of judicial power. A Bench of three Judges held that the legislature possessed competence over the subject matter and the Validation Act could remove the defect which the court had found in the previous case. It was not the legislative encroachment of judicial power but one of removing the defect which the court had pointed out with a deeming date.” (Emphasis supplied) 112. The Supreme Court also discussed these aspects in State of T.N. v. Arooran Sugars Ltd. (supra). In that judgment reliance is placed on relevant discussions in case of Shri Prithvi Cotton Mills Ltd. v. Broach Borough Municipality, (1969) 2 SCC 283 . The said paragraph 16 is set out hereinbelow for ready reference:— “16. The scope of a non-obstante clause and of validating Act has been examined by this Court from time to time. Reference in this connection be made to the judgment in the case of Prithvi Cotton Mills Ltd. v. Broach Borough Municipality, (1969) 2 SCC 283 where Hidayatullah, C.J. speaking for the Constitution bench said: “When a legislature sets out to validate a tax declared by a court to be illegally collected under and ineffectiveness or invalidity must be removed before validation can be said to take place effectively. The most important condition, of course, is that the legislature must possess the power to impose the tax, for if it does not, the action must ever remain ineffective and illegal. Granted legislative competence, it is not sufficient to declare merely that the decision of the court shall not bind for that is tantamount to reversing the decision in exercise of judicial power which the legislature does not possess or exercise. A Court's decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances. Ordinarily, a court holds a tax to be invalidly imposed because the power to tax is wanting or the statute or the rules or both area invalid or do not sufficiently create the jurisdiction. Validation of a tax so declared illegal may be known only if the grounds of illegality or invalidity are capable of being removed and are in fact removed and the tax thus made legal. Validation of a tax so declared illegal may be known only if the grounds of illegality or invalidity are capable of being removed and are in fact removed and the tax thus made legal. Sometimes this is done by providing for jurisdiction where jurisdiction had not been properly invested before. Sometimes this is done by re-enacting retrospectively a valid and legal taxing provision and then by fiction making the tax already collected to stand under the re-enacted law. Sometimes the legislature gives its own meaning and interpretation of the law under which the tax was collected and by legislative fiat makes the new meaning binding upon courts. The legislature may follow any one method or all of them and while it does so it may neutralise the effect of the earlier decision of the court which becomes ineffective after the change of the law.” The same view was reiterated in the cases of West Ramnad Electric Distribution Co. Ltd. v. State of Madras; Udai Ram Sharma v. Union of India; Tirath Ram Rajindra Nath v. State of U.P.; Krishna Chandra Gangopadhyaya v. Union of India; Hindustan Gum & Chemicals Ltd. v. State of Haryana; Utkal Contractors and Joinery (P) Ltd. v. State of Orissa; D. Cawasji & Co. v. State of Mysore and Bhubaneshwar Singh v. Union of India. It is open to the legislature to remove the defect pointed out by the court or to amend the definition or any other provision of the Act in question retrospectively. In this process it cannot be said that there has been an encroachment by the legislature over the power of the judiciary. A court's directive must always bind unless the conditions on which it is based are so fundamentally altered that under altered circumstances such decisions could not have been given. This will include removal of the defect in a statute pointed put in the judgment in question, as well as alteration or substitution of provisions of the enactment on which such judgment is based, with retrospective effect. This is what has happened in the present case. The judgment of the High Court in writ petition No. 1464/74, dated 8.10.1976 was solely based on the amendments which had been introduced by Act 7 of 1974. This is what has happened in the present case. The judgment of the High Court in writ petition No. 1464/74, dated 8.10.1976 was solely based on the amendments which had been introduced by Act 7 of 1974. If those amendments so introduced have been effaced by Act 25 of 1978 with retrospective effect saying that it shall be deemed that no such amendments had ever been introduced in the principal Act, then full effect has to be given to the provisions of later Act unless they are held to be ultra vires or unconstitutional.” (Emphasis added) 113. The above judgments of the Supreme Court lay down following principles of law: (i) The legislature cannot sit over a judgment of this Court or so to speak overrule it. (ii) There cannot be any declaration of invalidating a judgment of the Court without altering the legal basis of the judgment as a judgment is delivered with strict regard to the enactment as applicable at the relevant time. (iii) However, once the enactment itself stands corrected, the basic cause of adjudication stands altered and necessary effect follows the same. (iv) In exercising legislative power, the legislature by mere declaration, without anything more, cannot directly overrule, revise or override a judicial decision. It can render judicial decision ineffective by enacting valid law on the topic within its legislative field fundamentally altering or changing its character retrospectively. 114. In view of above legal position, there is no substance in the contention of the Petitioner that the impugned amendments were enacted to nullify the judgments of the Supreme Court in Mathew Varghese (supra) and General Manager, Sri. Siddheshwara Co.-op. Bank Ltd. (supra) as submitted by the learned Senior Counsel appearing for the Petitioner. 115. By the impugned amendment, what is sought to be done is alteration or substitution of provision of the said Rule 8(8) of the said Rules. It is not the contention of Mr. Thakkar, learned Senior Counsel that the Central Government has no power to make such Rule. The Rule making power is to be found in Section 38 of the said Act. The relevant portion of Section 38 is reproduced hereinbelow for ready reference:— “38. It is not the contention of Mr. Thakkar, learned Senior Counsel that the Central Government has no power to make such Rule. The Rule making power is to be found in Section 38 of the said Act. The relevant portion of Section 38 is reproduced hereinbelow for ready reference:— “38. Power of Central Government to make rules.-(1) The Central Government may, by notification and in the Electronic Gazette as defined in clause(s) of section 2 of the Information Technology Act, 2000 (21 of 2000), make rules for carrying out the provisions of this Act. (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:— 1[(a)] — 2[(aa)] — (b) the manner in which the rights of a secured creditor may be exercised by one or more of his officers under subsection (12) of section 13; (3) Every rule made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.” 116. The above referred sub-Section 12 of Section 13 is also reproduced hereinbelow for ready reference:— “13.(12) The rights of a secured creditor under this Act may be exercised by one or more of his officers authorised in this behalf in such manner as may be prescribed.” 117. Thus, as far as legislative competency is concerned, Mr. Thakkar is not challenging the validity of Rule 8(8) on that ground and fairly he has stated so before us. Therefore, we are not considering this aspect in detail. 118. It is clear that it is permissible to alter or substitute the provisions of Rule on which the judgment is based. Thus, as far as legislative competency is concerned, Mr. Thakkar is not challenging the validity of Rule 8(8) on that ground and fairly he has stated so before us. Therefore, we are not considering this aspect in detail. 118. It is clear that it is permissible to alter or substitute the provisions of Rule on which the judgment is based. Therefore, it cannot be said that by the said amendment, the judgments of Hon'ble Supreme Court interpreting the earlier Rule requiring that sale by any method other than public auction or public tender shall be on such terms as may be settled between “the parties” in writing as interpreted to mean “secured creditor, purchaser and borrower” were set aside. The legislature in their wisdom have now changed the same to “on such terms as may be settled between secured creditor and the proposed purchaser in writing.” The said legislative exercise is within the legislative competence as discussed hereinabove. 119. It is significant to note that, the above interpretation of the Supreme Court in Mathew Varghese (supra) and General Manager, Sri. Siddheshwar Co.-op. Bank Ltd. (supra) is also required to be understood in the context of unamended Rule 8 (8) in the context of Rule 9 (4) as in force at the relevant time. Rule 9 (4) of the said Rules has been amended subsequently on 3rd November 2016. The relevant portion of Rule 9 for our purpose is set out hereinbelow as appearing before the amendment and after the amendment:— Rule 9(4) [as inforce in 2014] Rule 9(4) [as amended on 03/11/2016] (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. (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 purchaser and the secured creditor, in any case not exceeding three months]. 120. It is very clear that in unamended Rule 9(4) no maximum time limit for payment of balance 75% of purchase price was provided, however, after amendment three months maximum period is provided. 121. Mr. 120. It is very clear that in unamended Rule 9(4) no maximum time limit for payment of balance 75% of purchase price was provided, however, after amendment three months maximum period is provided. 121. Mr. Thakkar, learned senior counsel also relied on the case of J. Rajiv Subramaniam (supra) and particularly on paragraphs 12 to 18 of the same. The said paragraphs are reproduced hereinbelow for the ready reference: “12. This Court in the case of Mathew Varghese v. M. Amritha Kumar examined the procedure required to be followed by the banks or other financial institutions when the secured assets of the borrowers are sought to be sold for settlement of the dues of the banks/financial institutions. The Court examined in detail the provisions of the SARFAESI Act, 2002. The Court also examined the detailed procedure to be followed by the bank/financial institutions under the Rules, 2002. This Court took notice of Rule 8, which relates to Sale of immovable secured assets and Rule 9 which relates to time of sale, issue of sale certificate and delivery of possession etc. With regard to Section 13(1), this Court observed that Section 13(1) of SARFAESI Act, 2002 gives a free hand to the secured creditor, for the purpose of enforcing the secured interest without the intervention of Court or Tribunal. But such enforcement should be strictly in conformity with the provisions of the SARFAESI Act, 2002. Thereafter, it is observed as follows:— “A reading of Section 13(1), therefore, is clear to the effect that while on the one hand any secured creditor may be entitled to enforce the secured asset created in its favour on its own without resorting to any court proceedings or approaching the Tribunal, such enforcement should be in conformity with the other provisions of the SARFAESI Act.” 13. This Court further observed that the provision contained in Section 13(8) of the SARFAESI Act, 2002 is specifically for the protection of the borrowers in as much as, ownership of the secured assets is a constitutional right vested in the borrowers and protected under Article 300A of the Constitution of India. Therefore, the secured creditor as a trustee of the secured asset can not deal with the same in any manner it likes and such an asset can be disposed of only in the manner prescribed in the SARFAESI Act, 2002. Therefore, the secured creditor as a trustee of the secured asset can not deal with the same in any manner it likes and such an asset can be disposed of only in the manner prescribed in the SARFAESI Act, 2002. Therefore, the creditor should ensure that the borrower was clearly put on notice of the date and time by which either the sale or transfer will be effected in order to provide the required opportunity to the borrower to take all possible steps for retrieving his property. Such a notice is also necessary to ensure that the process of sale will ensure that the secured assets will be sold to provide maximum benefit to the borrowers. The notice is also necessary to ensure that the secured creditor or any one on its behalf is not allowed to exploit the situation by virtue of proceedings initiated under the SARFAESI Act, 2002. 14. Thereafter, in Paragraph 30, this Court observed as follows:— “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 credtior 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.” 15. As noticed above, this Court in Mathew Varghese case also examined Rules 8 and 9 of the Rules, 2002. On a detailed analysis of Rules 8 and 9(1), it has been held that any sale effected without complying with the same would be unconstitutional and, therefore, null and void. 16. In the present case, there is an additional reason for declaring that sale in favour of the appellant was a nullity. Rule 8(8) of the aforesaid Rules is as under:— “Sale by any method other than public auction or public tender, shall be on such terms as may be settled between the parties in writing.” 17. It is not disputed before us that there were no terms settled in writing between the parties that the sale can be eaffected by Private Treaty. In fact, the borrowers - respondent Nos. It is not disputed before us that there were no terms settled in writing between the parties that the sale can be eaffected by Private Treaty. In fact, the borrowers - respondent Nos. 1 and 2 were not even called to the joint meeting between the Bank - Respondent No. 3 and Ge-Winn held on 8th December, 2006. Therefore, there was a clear violation of the aforesaid Rules rendering the sale illegal. 18. It must be emphasized that generally proceedings under the SARFAESI Act, 2002 against the borrowers are initiated only when the borrower is in dire-straits. The provisions of the SARFAESI Act, 2002 and the Rules, 2002 have been enacted to ensure that the secured asset is not sold for a song. It is expected that all the banks and financial institutions which resort to the extreme measures under the SARFAESI Act, 2002 for sale of the secured assets to ensure, that such sale of the asset provides maximum benefit to the borrower by the sale of such asset. Therefore, the secured creditors are expected to take bonafide measures to ensure that there is maximum yield from such secured assets for the borrowers. In the present case, Mr. Dhruv Mehta has pointed out that sale consideration is only Rs. 10,000/- over the reserve price whereas the property was worth much more. It is not necessary for us to go into this question as, in our opinion, the sale is null and void being in violation of the provision of Section 13 of the SARFAESI Act, 2002 and Rules 8 and 9 of the Rules, 2002.” 122. Thus, in the said judgment of J. Rajiv Subramanian (supra), the Supreme Court highlighted the safeguards which are provided in the said Act and said Rules on the basis of the provisions of the said Act and said Rules as applicable at the relevant time. The said safeguards shall continue to operate except with necessary changes in view of changes in provision of law. We have already discussed hereinabove the safeguards provided by the scheme of the said Act as reflected in Section 13 read with Rules 8 and 9, even after the impugned amended Rule 8(8), which we have “read down/read into” as set out hereinabove. 123. We have already discussed hereinabove the safeguards provided by the scheme of the said Act as reflected in Section 13 read with Rules 8 and 9, even after the impugned amended Rule 8(8), which we have “read down/read into” as set out hereinabove. 123. In the present Judgment, we are not considering whether all the provisions of the said Act and said Rules as applicable when the impugned sale was conducted are strictly followed. By earlier order dated 27th October 2020(in LDVCIA No. 1 of 2020), this Court has clarified that the scope of this Writ Petition is confined only to the extent of constitutional validity of Rule 8(8) and for other reliefs, the remedy of the Petitioner is before Debt Recovery Tribunal. During the hearing of this Writ Petition, all the parties agreed that we will be examining the relief regarding constitutional validity of amended Rule 8 (8) of the said Rules and as far as other reliefs are concerned, the Petitioner to agitate the same in the pending securitization application or any other appropriate proceedings. Thus there is no substance in the contention that the impugned amendment is enacted to nullify the judgment of the Supreme Court in the case of Mathew Varghese (supra) and General Manager, Sri. Siddheshwara Co.-operative Bank Ltd. (supra) 124. Point No. 4 : The amended Rule destroys the basic objective of section 13 read with Rules 8 and 9 i.e. sale of secured assets in fair and transparent manner to achieve maximum value. 125. Mr. Thakkar, learned senior counsel appearing for the Petitioner vehemently contended that the amended Rule has resulted into destroying the basic objective of section 13 read with Rules 8 and 9 i.e. sale of secured assets in fair and transparent manner to achieve maximum value. He submitted that unamended Rule as interpreted by the Supreme Court in Mathew Varghese (supra) and General Manager, Sri. Siddheshwara Co-op. Bank Ltd. (supra) contemplated that in case the sale is by private treaty or by inviting quotations then the terms of sale are to be settled by the secured creditors, borrower and auction purchaser. He submitted that as consent of the borrower was contemplated under the unamended Rules there was complete control of borrower as far as the terms and conditions of such sale are concerned, including the sale price. He submitted that as consent of the borrower was contemplated under the unamended Rules there was complete control of borrower as far as the terms and conditions of such sale are concerned, including the sale price. Thus, he submitted that the same was acting as a complete safeguard to achieve maximum value. 126. We have examined the scheme of the said Act particularly concerning enforcement of security interest. The scheme as provided under section 13 of the said Act read with Rules 8 and 9 clearly contemplates that before effecting sale, the authorised officer shall obtain valuation of the property from approved valuer and in consultation with the secured creditor, fix the reserve price of property. No sale of immovable property under these Rules in the first instance shall take place before expiry of 30 days of notice of sale has been served on the borrower, and in case of subsequent sale, 15 days notice. Every notice of such sale shall include reserve price fixed of the immovable secured assets below which the property shall not be sold. Apart from that any measure taken by the secured creditor/authorised officer under section 13 read with 8 and 9 [except regarding decision on the representation/objection to the notice under section 13(2)] can be challenged under section 17 of the said Act. We have set out the scheme in detail in earlier part of this judgment. The scheme contemplates various safeguards at various stages except one i.e. as a result of amended rule, the sale of secured asset by private treaty is permissible without taking efforts to sale the same by public auction or by inviting public tenders and failure of sale by that mode. The object of the said Act is to obtain maximum price by selling the secured asset. Thus the said position is contrary to the object of the said Act. Therefore we have already read into the said amended rule as set out earlier. After analysis of the scheme of the said Act and said Rules regarding sale of secured assets with the reading into the amended rule as above, there is no ground to substantiate the contention that effect of the amended Rule is denial of sale of secured assets in fair and transparent manner to achieve maximum value. 127. The provision of law and action taken under such provision of law are totally different from each other. 127. The provision of law and action taken under such provision of law are totally different from each other. It is settled legal position that merely on the count of possibility of its abuse the provision of law cannot be struck down. The provision of law may be valid and constitutional but the action taken under it may not be valid. Thus, possibility in a given case of not fetching maximum value from a particular sale conducted by private treaty cannot be considered as ground to challenge the constitutional validity of the said amended Rule 8(8). We have already read into Rule 8(8) that the sale by private treaty can be conducted only after sale by public auction or by inviting tender fails. Thus, the same will be the sufficient safeguard and now after “reading down or reading into” the said provision it cannot be said that the provision is arbitrary or confers excessive power. Thus, the apprehension expressed by the learned Senior Counsel of the Petitioner is taken care. 128. The said action of sale can be challenged under section 17 of the said Act. Thus, as sufficient safeguards are provided and procedure laid down is fair and transparent and with reading into the said provision as above and in view of clarification that notice of sale under Rule 8(7) in case of sale by private treaty should contain the price offered by intending purchaser, we find that there is no substance in the contention that the amended Rule destroys the basic objective of section 13 read with Rules 8 and 9 i.e. sale of secured assets in fair and transparent manner to achieve maximum value. 129. Point No. 5- The impugned amendment is contrary to the judgment of Mathew Varghese (supra) holding that no sale can be postponed beyond one month. 130. Mr. Thakkar, learned senior counsel in this behalf also heavily relied on the judgment in the case of Mathew Varghese (supra). He relied on paragraphs 29.4, 30, 41 and 53 which are reproduced for ready reference: “29.4. 130. Mr. Thakkar, learned senior counsel in this behalf also heavily relied on the judgment in the case of Mathew Varghese (supra). He relied on paragraphs 29.4, 30, 41 and 53 which are reproduced for ready reference: “29.4. Therefore, the creditor should ensure that the borrower was clearly put on notice of the date and time by which either the sale or transfer will be effected in order to provide the required opportunity to the borrower to take all possible steps for retrieving his property or at least ensure that in the process of sale the secured asset derives the maximum benefit and the secured creditor or anyone on its behalf is not allowed to exploit the situation of the borrower by virtue of the proceedings initiated under the SARFAESI Act. More so, under Section 13(1) of the SARFAESI Act, the secured creditor is given a free hand to resort to sale of the property without approaching the court or Tribunal.” “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.” “41. Here again we find that even if there are some difference in the amount tendered by the borrower while exercising his right of redemption under Section 13(8), the question of difference in the amount should be kept open and can be decided subsequently, but on that score the right of redemption of the mortgagor cannot be frustrated. Elaborating the statement of law made therein, we wish to state that the endeavour or the role of a secured creditor in such a situation while resorting to any sale for the realisation of dues of a mortgagor asset, should be that the mortgagor is entitled for some lenience, if not more to be shown, to enable the borrower to tender the amounts, due in order to ensure that the constitutional right to property is preserved, rather than it being deprived of.” 53. We, therefore, hold that unless and until a clear 30 days' notice is given to the borrower, no sale or transfer can be restored 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. 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.” 131. There cannot be any quarrel with above position of law. However, it is to be noted that the Rules as applicable when the said judgment of Mathew Varghese (supra) was delivered are now substantially amended. 132. The present Rule provides that for sale at the first instance 30 days notice is to be given to the borrower and for subsequent sale 15 days notice is contemplated. In any case as held in Mathew Varghese's case the rights of borrower are to be protected. 132. The present Rule provides that for sale at the first instance 30 days notice is to be given to the borrower and for subsequent sale 15 days notice is contemplated. In any case as held in Mathew Varghese's case the rights of borrower are to be protected. We have already discussed hereinabove the manner in which sufficient safeguards are provided even for sale by obtaining quotations or by private treaty with the reading down/reading into Rule 8(8) as above and by clarifying contents of notice as required to be issued under Rule 8(7). We also make it clear that if any of the provisions of said Act and said Rules are not complied with the said dispute can be raised before the Debt Recovery Tribunal in the proceedings filed under section 17 or any other appropriate proceedings, if available. 133. We have already clarified that in the present writ petition we are only considering the constitutional validity of Rule 8(8) and as far as merits of the case are concerned, the petitioner is free to adopt other appropriate proceedings. 134. Point No. 6 : The Petitioner has not raised specific grounds and details to challenge the constitutional validity of said amended Rule. 135. The learned ASG submitted that there are no specific grounds raised in the Petition and no details are given regarding said grounds to challenge the constitutional validity of said amended Rule. He relied on paragraph 22 of V.S. Rice and Oil Mills (supra). It has been held in the said judgment that the Supreme Court has repeatedly pointed out that when a citizen wants to challenge the validity of any statute on the ground that it contravenes Article 14, specific, clear and unambiguous allegations must be made in that behalf and it must be shown that the impugned statute is based on discrimination and that such discrimination is not referable to any classification which is rational and which has nexus with the object intended to be achieved by the said statute. The learned ASG also relied on paragraph 6 of Amrit Banaspati Company Ltd. (supra) The said paragraph 6 is set out hereinbelow for ready reference: It is settled law that the allegations regarding the violation of constitutional provision should be specific, clear and unambiguous and should give relevant particulars, and the burden is on the person who impeaches the law as violative of constitutional guarantee to show that the particular provision is infirm for all or any of the reasons stated by him. In the recent decision of this Court Gauri Shankar v. Union of India to which both of us were parties, it was reiterated that- (a) there is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles; (b) it must be presumed that the Legislature understands and correctly appreciates the need of its own people to problems made manifest by experience and that its discriminations are based on adequate grounds; (c) in order to sustain the presumption of constitutionality the Court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation.” 136. Mr. Samdani, learned Senior counsel appearing on behalf of Respondent Nos. 2 and 3 submitted that the Petitioner has only argued the ground regarding arbitrariness of Article 14. He submitted that the same cannot be considered in absence of any particulars and without providing any basis. He relied on the judgment in case of State of Jammu and Kashmir and Shri Trilok Nath Khosa (supra) and more particularly on paragraph 18 of the same. In the said judgment, it has been held that where a party seeks to impeach validity of the Rule made by the Competent Authority on the ground that the Rules offend Article 14, the burden is on him to plead and prove the infirmity is too well established to need elaboration. Thus, what is necessary is sufficiency of pleadings. We have in earlier part of this judgment not only set out the factual background but also have set out relevant pleadings of respective parties including the pleadings raised in the Writ Petition. We have considered extensively in this judgment rival contentions in detail. Thus, what is necessary is sufficiency of pleadings. We have in earlier part of this judgment not only set out the factual background but also have set out relevant pleadings of respective parties including the pleadings raised in the Writ Petition. We have considered extensively in this judgment rival contentions in detail. We do not want to deal with this aspect in detail, except observing that this is not a case where it can be said that sufficient pleadings are not raised by the Petitioner. 137. Point No. 7 : Central Government is empowered to enact amended Rule 8(8). Section 38(2)(b) of the said Act empowers the Central Government to make Rules regarding the manner in which rights of the secured creditor may be exercised by one or more of these officers under sub-section (12) of section 13. Section 13(12) is regarding rights of secured creditor under the said Act to be exercised by one or more of such officers authorised, in that behalf in such manner is manifest. Thus, it is clear that the Central Government is empowered to enact the amended Rule 8(8). It is also important to note that Mr. Thakker, learned senior counsel appearing for the Petitioner stated that he has not challenged the legislative competence of the Central Government to enact the said amended Rule 8(8). Therefore, we are not dealing with this aspect in detail. 138. Point No. 8 : Provisions of the Act and the Rules both are required to be seen textually and contextually. If so analyzed textually and contextually, the text becomes clear and the purpose and reason behind provision of the Act and Rules and the amendment to the Rules fall in place and the challenge become unsustainable. These aspects becomes very relevant in view of legal fiction created under section 13(6) of the said Act by which the secured creditor is placed in the position of the owner and therefore secured creditor can sell the secured asset as owner. 139. Mr. Samdhani, learned Senior Counsel appearing for the Respondent Nos. 2 and 3 submitted that legislature has created the fiction under Section 13(6) and placed the secured creditor in the position of an owner. He submitted that this has been done with an object to grant to secured creditor right to transfer the secured asset as if secured creditor is the owner of the same. 2 and 3 submitted that legislature has created the fiction under Section 13(6) and placed the secured creditor in the position of an owner. He submitted that this has been done with an object to grant to secured creditor right to transfer the secured asset as if secured creditor is the owner of the same. He submitted that if the legislature creates a fiction, it is required to be taken to its logical conclusion. He relied on judgment of Supreme Court in the matter of Transcore (supra). 140. Section 13(6) of the said Act inter alia provides that any transfer of secured asset by secured creditor after taking possession thereof by the secured creditor shall vest in the transferree all rights in, or in relation to, the secured asset transferred as if the transfer had been made by the owner of the such secured asset. In said Transcore (supra) in paragraph 26 has been held as follows:— “26. Section 13(6) inter alia provides that any transfer of secured asset after taking possession or after taking over of management of the business, under Section 13(4), by the bank/FI shall vest in the transferee all rights in relation to the secured assets as if the transfer has been made by the owner of such secured asset. Therefore, Section 13(6) inter alia provides that once the bank/FI takes possession of the secured asset, then the rights, title and interest in that asset can be dealt with by the bank/FI as if it is the owner of such an asset. In other words, the asset will vest in the bank/FI free of all encumbrances and the secured creditor would be entitled to give a clear title to the transferee in respect thereof.” 141. The Supreme Court discussed the concept of legislative fiction in Rajasthan State Industrial Development & Investment Corporation (supra). The Supreme Court has discussed the concept of legislative fiction in paragraphs 26 to 28 of the said judgment. The same are reproduced hereinbelow for ready reference:— “VI. “As if” -Meaning of 26. The expression “as if” is used to make one applicable in respect of the other. The words “as if” create a legal fiction. The Supreme Court has discussed the concept of legislative fiction in paragraphs 26 to 28 of the said judgment. The same are reproduced hereinbelow for ready reference:— “VI. “As if” -Meaning of 26. The expression “as if” is used to make one applicable in respect of the other. The words “as if” create a legal fiction. By it, when a person is “deemed to be” something, the only meaning possible is that, while in reality he is not that something, but for the purposes of the Act of legislature he is required to be treated that something, and not otherwise. It is a well settled rule of interpretation that, in construing the scope of a legal fiction, it would be proper and even necessary, to assume all those facts on the basis of which alone, such fiction can operate. The words as if, in fact show the distinction between two things and, such words must be used only for a limited purpose. They further show that a legal fiction must be limited to the purpose for which it was created. [Vide Radhakissen Chamria v. Durga Prasad Chamria, CIT v. S. Teja Singh, Ram Kishore Sen v. Union of India, Sher Singh v. Union of India, Sher Singh v. Union of India, State of Maharashtra v. Laljit Rajshi Shah, Paramjeet Singh Patheja v. ICDS Ltd. (SCC p.341, para 28) and CIT v. Willamson Financial Services] 27. In East End Dwelling Co. Ltd. v. Finsbury Borough Council, this Court approved the approach which stood adopted and followed persistently. It set out as under : (AC p.133) “…The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs”. 28. In Industrial Supplies Pvt. Ltd. v. Union of India this Court observed as follows : - (SCC p.351, para 25) 25. “It is now axiomatic that when a legal fiction is incorporated in a statute, the court has to ascertain for what purpose the fiction is created. After ascertaining the purpose, full effect must be given to the statutory fiction and it should be carried to its logical conclusion. The court has to assume all the facts and consequences which are incidental or inevitable corollaries to giving effect to the fiction. After ascertaining the purpose, full effect must be given to the statutory fiction and it should be carried to its logical conclusion. The court has to assume all the facts and consequences which are incidental or inevitable corollaries to giving effect to the fiction. The legal effect of the words ‘as if he were’ in the definition of owner in Section 3(n) of the Nationalisation Act read with Section 2(1) of the Mines Act is that although the petitioners were not the owners, they being the contractors for the working of the mine in question, were to be treated as such though, in fact, they were not so. (Emphasis added) 142. Thus, it is clear that by legislative fiction the secured creditor is deemed to be the owner of the secured asset for enforcement of security interest. By said fiction the secured asset vests in the secured creditor and secured creditor would be entitled to give clear title to the transferree with respect to secured assets. It is settled legal position that when a legal fiction is incorporated in a statute, the Court has to ascertain for what purpose the fiction is created and after ascertaining the purpose, full effect has to be given to the statutory fiction and it should be carried to its logical conclusion. It is also settled legal position that the Court has to assume all the facts and consequences which are incidental or inevitable corollaries to give effect to the fiction as set out hereinabove. Legal fiction as envisaged under Section 13(6) provides that once the secured creditor takes the possession of the secured asset their right, title and interest in that asset can be dealt with by the secured creditor as if it is the owner of such assets. This legal fiction is required to be examined in the context of what is set out in the Statement of Objects and Reasons of the said Act wherein it is specifically recorded that the said Act was enacted to provide legal provision for facilitating securitization of financial assets of banks and financial institutions and for providing financial institutions in India power to take possession of secuerities and sell them. However, it is clear that the said right is to be exercised in the manner laid down by the provision of the said Act and the said Rules. However, it is clear that the said right is to be exercised in the manner laid down by the provision of the said Act and the said Rules. The secured creditor as an owner of secured asset has every right to determine the terms of sale to be executed by the secured creditor in favour of the proposed purchaser. The said right is also to be exercised in the manner as provided by the said Act and said Rules. The said right is not absolute as more particularly discussed hereinabove. It is also significant to note that Section 13(8) has been amended by which sale by private treaty is specifically contemplated and corresponding amendments in the Rules are also made. 143. Point No. 9 : If the nature, object and scheme of the said Act and also the area over which power has been delegated under the said Act is examined then it is clear that the subordinate legislation in question i.e. amended Rule 8(8) is in conformity with the provisions of the said Act. 144. We have already discussed this point hereinabove. We have in detail examined what is contemplated under the scheme of the said Act and the said Rules is that the secured creditor/authorised officer shall take maximum possible efforts to see that the secured asset is sold for highest possible price. As we have “read down/read into” the Rule 8(8) as set out hereinabove and as there are sufficient safeguards provided in the scheme of the said Act and Rules and by reading into Rule 8(8) as done by us. The said amended Rule 8(8) is in conformity with the provisions of the said Act. 145. CONCLUSIONS: (I) We have in detail analysed relevant provisions of said Act and Rules, namely, section 13 of the said Act and Rules 8 and 9 and other rules of the said Rules. What is contemplated by the said Act and said Rules is that banks and financial institutions i.e. secured creditors should act in transparent manner to get maximum possible market price by selling the secured assets. (II) The statement of object and reasons of the said Act show that the said Act is enacted for empowering the banks and financial institutions i.e. the secured creditors to take possession of the secured assets and to sell them without the intervention of the Court. (II) The statement of object and reasons of the said Act show that the said Act is enacted for empowering the banks and financial institutions i.e. the secured creditors to take possession of the secured assets and to sell them without the intervention of the Court. Section 13(1) r/w. Section 13(4) inter alia provides that security interest created in favour of any secured creditor may be enforced, without the intervention of the Court or Tribunal and for that purpose secured creditor has been empowered to take possession and to transfer by way of lease, assignment or sale for realising the secured assets. Section 13(6) of the said Act, inter alia provides that any transfer of secured asset by the secured creditor after taking possession thereof shall vest in the transferee all rights in the secured assets transferred as if the transfer has been made by the owner of such secured asset. Thus, it is clear that by said legislative fiction, the secured creditor is deemed to be the owner of the secured asset for enforcement of securities. By said legal fiction, the secured asset vests in the secured creditor and secured creditor will be entitled to transfer clear title to the transferee with respect to the secured asset. (III) Section 13(8) of the said Act read with Rule 8(5) of the said Rules provides that secured asset can be sold by the secured creditor/authorised officer by any of the following methods:— (a) By obtaining quotations from the persons dealing with similar secured assets or otherwise interested in buying such assets; or (b) by inviting tenders from the public; (c) by holding public auction; or (d) by private treaty. The Supreme Court, in Kerala Financial Corporation (supra) and in Lakshmanasami Gounder (supra) held that inviting tenders from the public or holding public auction is the best method for disposal of the public properties. It has been held that holding public auction is one of the modes of sales to get highest competitive price. The Supreme Court, in Kerala Financial Corporation (supra) and in Lakshmanasami Gounder (supra) held that inviting tenders from the public or holding public auction is the best method for disposal of the public properties. It has been held that holding public auction is one of the modes of sales to get highest competitive price. (IV) The following mandatory requirements clearly show that what is contemplated under the scheme of the said Act and the said Rules is that the secured creditor/authorised officer shall take maximum possible efforts to see that the secured asset is sold for highest possible price:— (a) obtaining valuation of the property from an approved valuer and fixing the reserved price of the same [Rule 8(5)] (b) Every notice of sale shall mention reserve price of the immovable secured asset. [Rule 8 (7)] (c) Sale shall be confirmed in favour of the purchaser who has offered the highest sale price [Rule 9(2)] (d) No sale shall be confirmed if the amount offered by sale price is less than the reserved price, except with the consent of the borrower [Rule 9(2)]. All these provisions clearly show that what is contemplated under the said Act and the said Rules is that the secured creditor/authorised officer shall take maximum possible efforts to see that the secured asset is sold for highest possible price. It is well established that to secure maximum market price the best method is public auction or by inviting public tender. (V) It is possible that as a result of the amended Rule 8(8), the sale of secured asset by private treaty can be conducted, even at the first instance, without making attempts to sell the same by public auction or by inviting public tender. Thus allowing sale by private treaty without failure of sale by method of public auction or by inviting public tender will be violative of the object of the said Act and said Rules of ensuring receipt of maximum possible price by sale of the secured asset. In that case, the said amended Rule 8(8) will become unconstitutional as unfettered and arbitrary powers are conferred on the secured creditor/authorised officer to that extent. Said amended Rule 8(8) is not per se unconstitutional. However the stage when said amended Rule 8(8) is invoked is very crucial and important. In that case, the said amended Rule 8(8) will become unconstitutional as unfettered and arbitrary powers are conferred on the secured creditor/authorised officer to that extent. Said amended Rule 8(8) is not per se unconstitutional. However the stage when said amended Rule 8(8) is invoked is very crucial and important. If the said Rule is invoked at the first instance, then in view of absence of public notice as public participation is denied, the same will amount to conferring unfettered, arbitrary and excessive powers on the secured creditor/authorised officer resulting into destroying the object of the said Act and said Rules. Thus to save the said amended Rule 8(8) from unconstitutionality on the ground that unfettered and arbitrary powers are given to secured creditors/authorised officer it is necessary to read into said Rule 8(8) that sale by private treaty can be conducted only after the sale by inviting tenders from the public or by holding public auction fails. (VI) There are sufficient safeguards provided in the scheme of the said Act and said Rules and therefore it cannot be said that unregulated or unfettered and arbitrary rights are conferred on the secured creditors or authorised officer (except one aspect regarding sale by private treaty at the first instance without making attempt to sell the property by public auction or by inviting public tender). As we have read into Rule 8(8) that sale by private treaty can be conducted only after sale by inviting tenders from the public or by holding public auction fails, it cannot be said that unfettered and arbitrary powers are given to the Secured Creditor/Authorised Officer by the amended Rule 8(8). (VII) In view of provision of amended Rule 8(8) providing that sale by inviting tenders or by private treaty shall be on such terms as may be settled between the secured creditor and the proposed purchaser in writing, borrower cannot be a party to the terms of sale. However the said terms cannot be arbitrarily fixed and such terms as settled between the secured creditor and the proposed purchaser in writing cannot be kept secret. The rules do not contemplate that such terms which are to be arrived at in writing between the secured creditor and proposed purchaser are to be kept secret. However the said terms cannot be arbitrarily fixed and such terms as settled between the secured creditor and the proposed purchaser in writing cannot be kept secret. The rules do not contemplate that such terms which are to be arrived at in writing between the secured creditor and proposed purchaser are to be kept secret. In fact, such terms also will have to be in consonance with the said Rules, namely, the sale cannot be below the reserve price, the sale cannot be without giving notice to the borrower of 30 days (in case sale is at the first instance) or of 15 days (for subsequent sale) and other mandatory requirements set out earlier. We have already held that sale by private treaty under Rule 8(8) can be conducted only after sale by inviting tenders from the public or by holding public auction fails. (VIII) Rule 8(7) provides that “Every notice of Sale” shall contain detailed terms and conditions of sale and the same shall include description of the immovable property, details of the security debt of the borrower, reserve price of the secured asset, time and place after which inter alia sale by private treaty can be completed, deposit of earnest money and any other terms and conditions. It is significant to note that Rule 9(2) inter alia contemplates that sale shall be confirmed in favour of the purchaser who has offered highest price in sale by way of private treaty. Thus, what is contemplated is that even in case of sale by private treaty the offers can be received not from one party but from several parties. In view of this what is essential to mention in notice contemplated under Rule 8(7), to be served on the borrower is the offer received by the secured creditor from the intending purchaser who has offered to purchase the secured asset in the sale to be conducted by private treaty. This is important as the borrower can bring the purchaser willing to purchase the secured asset by private treaty at higher amount. This is absolutely legally permissible as the scheme of the Act and the Rules contemplates that even in case of sale by private treaty offers can be given by more than one proposed purchasers and highest offer should be accepted. 146. This is absolutely legally permissible as the scheme of the Act and the Rules contemplates that even in case of sale by private treaty offers can be given by more than one proposed purchasers and highest offer should be accepted. 146. It is clarified that discussion regarding sale by private treaty of the secured assets is equally applicable to the sale by obtaining quotations from the persons dealing with similar secured assets or otherwise interested in buying such assets. 147. In view of above discussions, we pass the following order: ORDER (i) In the light of above reasoning and conclusions, we hold that amended Rules 8(8) of the Security Interest (Enforcement) Rules, 2002 as amended by Notification being GSR 1046 (E) dated 3rd is constitutional by reading into the same that sale by private treaty can be conducted only after sale by inviting tenders from the public or sale by holding public auction fails. (ii) As far as other prayer clauses are concerned, we clarify as done by order dated 27th October 2020 (LDVCIA No. 1 of 2020) that the petitioner is at liberty to pursue the Securitization Application No. 116/2019 filed under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 or to take any other available appropriate proceedings. (iii) We clarify that we have not considered the merits of the case and all contentions on merits are expressly kept open. (iv) The Writ Petition is disposed of in above terms with no order as to costs. (v) All interim applications do not survive and disposed of as such.