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2023 DIGILAW 1093 (GUJ)

IDFC First Bank Ltd. v. Dharmendra Popatlal Patel

2023-10-03

ANIRUDDHA P.MAYEE, SUNITA AGARWAL

body2023
JUDGMENT : (PER : HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL) 1. We have heard Shri R.S.Sanjanwala, learned Senior Counsel assisted by Shri Lalit Patel, learned counsel appearing for the appellant and Mr.Mahesh Bhavsar, learned counsel appearing for the respondent. 2. This intra-court appeal is directed against the judgment and order dated 03/04.08.2023 passed by the learned Single Judge allowing the writ petition in the following manner :- “14.1. In this view of the matter, in the considered opinion of this Court, while interference of this Court is required, yet, at the same time, since the respondent – bank is also entitled to realize its dues as a secured creditor as per the provisions of the Securitisation Act, therefore, appropriate clarifications are also required to be made. Hence, the following directions are passed:- (i) The action on the part of the respondent bank of selling the secured asset by way of sale through private treaty more particularly pursuant to the notice dated 10.06.2021 and entering into the MOU with respondent no.3 and issuing sale certificate in favour of the respondent no.3 and all consequential actions are hereby quashed and set aside. (ii) The respondent bank is directed to refund the amount paid by the respondent no.3 along with any expenses incurred by respondent no.3 for registration etc. to the respondent no.3 with 9% interest from the date the same had been paid/deposited by the respondent no.3. (iii) It would be open for the respondent bank to issue fresh notice for sale of the property through any of the modes as specified under Rule 8(5) of the Security Interest (Enforcement) Rules, 2002 more particularly, after issuing sale notice as per the format prescribed as per the proviso to Rule 8(6) more particularly as per Appendix IV-A as well as issuing notice in terms of Rule 8(6) read with Rule 9(1) of the above Rules as explained herein above, more particularly with regard to stating exact amount and giving adequate notice. (iv) Upon such notice issued by the Bank in the format as observed by the Court, it would be open to the petitioners to pay the entire outstanding and whereas, in case the entire outstanding is deposited with the respondent bank within the time stipulated in the notice, then the bank shall not proceed further and will take steps in accordance with law to return the property to the petitioners. (v) In case the petitioners are not able to deposit the amount to be recovered as specified in the notice as above within the time stipulated in the notice, then the bank shall be at liberty to take appropriate steps in accordance with law.” 3. The appellant bank, the Secured Creditor (hereinafter referred to as ‘Secured Creditor’) seeks to challenge the order passed by the learned Single Judge on the premise that the borrowers, namely respondent Nos.1 and 2 are habitual defaulters and no indulgence could have been granted to them on the reasoning given in the judgment impugned. 4. The relevant facts to decide the controversy at hands are that a notice dated 16.10.2017 under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short ‘the SARFAESI Act, 2002’) was issued to the original petitioners/respondent Nos.1 and 2 herein being borrowers (hereinafter referred to as ‘the respondent or borrowers or both’) indicating the outstanding amount against them. As there was no response, notice under Section 13(4) of the Act, 2002 read with Rule 9 of the Rules made thereunder dated 15.03.2018 showing intent to take over possession of the property in question (secured asset), had been issued. In furtherance thereof, the District Magistrate passed an order dated 18.12.2018 under Section 14 of the SARFAESI Act, 2002, authorizing the Mamlatdar to take possession of the secured asset. The said order was challenged by the respondent borrowers before the Debt Recovery Tribunal (in short ‘DRT’) by preferring a Securitization Application No.22 of 2010, wherein order dated 15.01.2019 was passed noticing the statement of the counsel for the applicants/petitioners herein that due to some financial crisis, the applicants could not maintain financial discipline of the bank, but they were ready to pay overdue installments and overdue amount on or before 30.03.2019. It was submitted by the counsel for the borrowers therein that all the grounds taken in the securitization application may be treated as relinquished and waved off and in case of default, the bank may proceed on the demand notice and possession notice already issued. The Secured Creditor had, thus, agreed to accept the proposal with the condition that in case of a single default, the bank will proceed as per the law. The Secured Creditor had, thus, agreed to accept the proposal with the condition that in case of a single default, the bank will proceed as per the law. In light of the above, the following directions were issued by the Debt Recovery Tribunal while disposing of the securitization application vide order dated 15.01.2019 :- “If the applicant will pay Rs.1,40,000/- per month and entire overdue amount of Rs.5,87,000/- on or before 30/3/2019, the Bank will allow normal installments and in case of any default, the Bank will be able to proceed on the process already initiated. Need not to say here that the applicant will be liable to pay the entire outstanding amount in case of further default and the Bank will be able to proceed in accordance with law. The applicant is directed to pay the amount payable for the month of January on or before 28th January, 2019. Further the applicant would pay minimum amount for February and March, 2019 on or before 15th of every month. It is further made clear that the applicant would be liable to pay legal fee of this S.A. to the respondent Bank. S.A. is disposed of accordingly.” 5. It appears that the respondent borrowers had deposited only an amount of Rs.11,69,000/- uptill 30.11.2019. Consequent to failure on the part of the respondent borrowers, the possession of the secured asset was taken by the Secured Creditor on 25.01.2021 and a Panchnama was drawn affixing the notice of possession upon the property in question. It seems that thereafter three notices for auction sale of the secured asset were issued by the Secured Creditor wherein dates of auction were mentioned with the reserved price of the property, which was initially fixed at Rs.52,94,800/- in the auction notice dated 12.02.2021. The first auction fixed on 15.03.2021 did not materialize. It is noted in the order of the learned Single Judge that in the second auction notice dated 21.03.2021, the reserved price had been reduced to Rs.48,00,000/-; whereas in the third auction notice the reserved price mentioned was Rs.44,06,000/-. The fact remains that three above noted auction notices resulted in no prospective bidders coming forward and hence, the Secured Creditor had issued a notice for sale through private treaty wherein the date of sale was mentioned as 28.06.2021, fixing price of the property at Rs.50,00,000/-. 6. The fact remains that three above noted auction notices resulted in no prospective bidders coming forward and hence, the Secured Creditor had issued a notice for sale through private treaty wherein the date of sale was mentioned as 28.06.2021, fixing price of the property at Rs.50,00,000/-. 6. It is the case of the Secured Creditor that the measures taken by the Secured Creditor to recover its dues had culminated into execution of a Memorandum of Understanding (MOU) dated 28.06.2021 and issuance of a Sale Certificate dated 28.06.2021 in favour of the fourth respondent herein. It is, thus, contended that the sale had become absolute. 7. It is also the stand of the Secured Creditor that the Secured Creditor had made several attempts to sell the secured asset and first attempt in that direction was made on 15.03.2021. The necessary steps under the provisions of Rule 8 more particularly the requirement of getting valuation from a Government Approved Valuer and accordingly fixing the reserved price of the secured asset at Rs.52,94,800/-, was duly completed. The copy of the Valuation Report dated 04.02.2021 obtained from a Government Approved Valuer is also appended to the affidavit-in-reply before the Writ Court. It is then contended that since three consecutive proposed sale of the secured asset through public auction had failed, on the proposal of the fourth respondent herein, under the letter dated 08.06.2021, the Secured Creditor undertook all the steps as envisaged under the provisions of the Act, 2002 read with the Rules for disposal of the secured asset. The notice to the borrowers was sent on 12.06.2021 informing that the property was sought to be sold by private treaty on 28.06.2021, but the same was affixed on the disputed property (secured asset) on 10.06.2021 as also published in the daily newspapers dated 10.06.2021 itself. The copies of the notices sent to the respondent borrowers by registered post, affixed on the property, and published in the newspapers, are all appended with the affidavit-in-reply. 8. It is further the case of the Secured Creditor that after it had undertaken all the measures as envisaged under the Act, 2002 as well as the Rules made thereunder, no indulgence could have been granted by the DRT in the Securitization Application No.183 of 2021 preferred by the respondent borrowers on 24.06.2021 to challenge the notice for sale. 8. It is further the case of the Secured Creditor that after it had undertaken all the measures as envisaged under the Act, 2002 as well as the Rules made thereunder, no indulgence could have been granted by the DRT in the Securitization Application No.183 of 2021 preferred by the respondent borrowers on 24.06.2021 to challenge the notice for sale. It is brought on the record that the DRT entertained the S.A. No.183 of 2021 and issued notice to the bank on 25.06.2021, but the case of the borrowers is that the Secured Creditor refused to accept the same and only on 29.06.2021, the panel counsel for the respondent bank had appeared before the DRT to submit that the sale by private treaty was already confirmed and the Sale Certificate had been issued in favour of the purchaser. The vehement submission of the learned counsel for the applicants/original petitioners/borrowers was that they were ready and willing to deposit the outstanding dues. By order dated 29.06.2021, while posting the matter for hearing on 26.07.2021, the Presiding Officer, DRT-II, Ahmedabad had directed the Secured Creditor to maintain status-quo, qua the property in question till the next date of hearing. 9. The contention of the learned counsel for the borrowers before the Writ Court, thus, was that despite issuance of notice to the bank, the authorized officer of the bank had illegally executed Sale Certificate on 28.06.2021 in favour of the fourth respondent herein. The copy of the Sale Certificate dated 28.06.2021 forms part of record of the writ petition. 10. It appears that S.A. No.183 of 2021 was ultimately allowed by DRT vide order dated 10.01.2022 holding that the Secured Creditor had violated and acted contrary to the mandatory provisions of Rule 8 of the Security Interest (Enforcement) Rules while selling the secured asset by private treaty. The result is that the said action of the Secured Creditor deserved to be quashed and hence set aside. The directions contained in the relief granted by the DRT are relevant to be noted hereinunder :- “24. In view of my finding on Point Nos.1 and 2, I am constrained to allow the present S.A. partly with the following directions :- 1) The present SA is partly allowed. The directions contained in the relief granted by the DRT are relevant to be noted hereinunder :- “24. In view of my finding on Point Nos.1 and 2, I am constrained to allow the present S.A. partly with the following directions :- 1) The present SA is partly allowed. 2) The sale, by private treaty, in favour of Respondent No.3 dated 28/06/2021 and sale certificate dated 28/06/2021 issued by Respondent No.1 Bank in favour of Respondent No.3 are accordingly set aside. 3) The secured creditor (Respondent-Bank) is directed to refund sale amount i.e. Rs.50,00,000/-(Rupees Fifty Lakh only) along with interest of 9% to Respondent No.3 within four weeks from today. 4) The Respondent Bank is directed to restore possession of the secured asset to the Applicants within a period of four weeks from today. 5) The secured creditor (Respondent – Bank) is at liberty to proceed afresh in accordance with the SARFAESI Act and Rules framed thereunder. 6) Respondent – Bank is directed to pay the costs of this Securitization Application to the Applicants and shall bear its own. 7) All pending interim applications, if any, are disposed of in view of above finding. 8) Interim relief, if any, stands vacated forthwith. 9) Registry is directed to provide copy of this Judgment free of cost to all the parties.” 11. It is further the case of the Secured Creditor that since the Chairperson of the Appellate Tribunal (DRAT) was not available, the respondent No.1 was constrained to approach this Court in Special Civil Application No.2900 of 2022 to challenge the order dated 10.01.2022 passed by the DRT in S.A. No.183 of 2021. The said writ petition was disposed of vide judgment and order dated 18.02.2022 with the following observations and directions :- “7. In such circumstances, considering the fact that the petitioner could not approach the Appellate Tribunal in absence of the Chairperson of the Tribunal, interest of justice would be met if all the parties are directed to maintain status-quo with regard to the property in question for next two weeks i.e. up to 4th March, 2022. 8. With the aforesaid directions, this petition is disposed of with a liberty to the petitioner Bank to approach the Debt Recovery Appellate Tribunal to challenge the impugned order dated 10th January, 2022 passed by the DRT-II, Ahmedabad in SA No.183 of 2021.” 12. 8. With the aforesaid directions, this petition is disposed of with a liberty to the petitioner Bank to approach the Debt Recovery Appellate Tribunal to challenge the impugned order dated 10th January, 2022 passed by the DRT-II, Ahmedabad in SA No.183 of 2021.” 12. The Secured Creditor then preferred appeal under Section 18 of the SARFAESI Act, 2002, namely Appeal No.8 of 2022 which has been allowed vide order dated 06.01.2023, wherein while setting aside the order passed by DRT dated 10.01.2022 the Appellate Tribunal had confirmed the sale in favour of the fourth respondent herein. 13. The challenge before the learned Single Judge was to the order passed by the Debt Recovery Appellate Tribunal (DRAT) on the ground that there had been infraction of Rule 8(5) of the Security Interest (Enforcement) Rules, 2002, more particularly since valuation of the property had not been obtained before putting the property to auction. It was urged by the borrowers before the Writ Court that in case of absence of any valuation, the basis of fixing the price of the property at the stage of three auctions as well as at the stage of sale by way of private treaty could not be established. It was contended that when the petitioner had paid substantial amount under the order dated 15.01.2019 in the first application preferred under Section 17 of the SARFAESI Act, 2002, namely S.A. No.22 of 2019, it was incumbent upon the Secured Creditor to issue a fresh notice under Section 13(2) of the SARFAESI Act, 2002, to revise the details of the amount payable by the respondent borrowers. The non-revision of the amount payable by the respondent borrowers had prejudiced them in the subsequent notices including the notice for taking possession of the property, the notices informing the date of auction as also the notice proposing to sell the property by way of a private treaty. It was, thus, argued that the sale by way of private treaty which had been conducted on 28.06.2021 during pendency of second S.A. No.183 of 2021 suffered from serious error of law. It was, thus, argued that the sale by way of private treaty which had been conducted on 28.06.2021 during pendency of second S.A. No.183 of 2021 suffered from serious error of law. The auction sale in favour of the fourth respondent, thus, was sought to be assailed on the ground that a valuable right conferred upon the borrower to redeem the mortgage under Section 13(8) of the SARFAESI Act, 2002, had been infringed as the borrower could not make all efforts to stop the sale or transfer of the secured asset of his ownership till the last minute before which the sale or transfer is effected. Only in case the borrowers have failed in this last attempt of theirs, the sale of the secured asset could have been proceeded with. 14. The question framed by the learned Single Judge to answer the said contention of the learned counsel for the original petitioners is whether there has been violation of such valuable right engrafted in Section 13(8) of the SARFAESI Act, 2002, which is in fact an extension of the protection of constitutional right of individuals to ownership of property under Article 300-A of the Constitution of India. Placing reliance on the decision of the Apex Court in Mathew Varghese vs. M. Amritha Kumar and others - (2014) 5 SCC 610 , it was observed by the learned Single Judge that the Secured Creditor as a trustee was not entitled to deal with the property in any manner it likes. The only procedure which could be adopted to dispose of the property was what has been prescribed in the SARFAESI Act. It was held in paragraph 10 that:- “10. In this view of the matter, in the considered opinion of this Court, the action on the part of the respondent bank in not specifying the actual outstanding due from the petitioners and not giving the petitioners appropriate set-off towards the amount deposited after Section 13(2) notice, would not be countenanced in any way whatsoever.” 15. In this view of the matter, in the considered opinion of this Court, the action on the part of the respondent bank in not specifying the actual outstanding due from the petitioners and not giving the petitioners appropriate set-off towards the amount deposited after Section 13(2) notice, would not be countenanced in any way whatsoever.” 15. While holding that the Secured Creditor had erred in not specifying the outstanding dues to the respondent borrowers, the learned Single Judge has proceeded to observe that though the Secured Creditor was entitled to continue the proceedings further without issuing notice under Section 13(2) afresh, yet in continuation with this measure under Section 13(4), it was incumbent upon the Secured Creditor to have ensured that the respondent borrowers were made aware in the notice for sale etc., as to the actual amount of outstanding dues from them which would enable the borrowers to try and attempt to pay the amount before the date of auction or sale by private treaty, as the case may be. Taking note of the provisions of Rule 9(1) of the Security Interest (Enforcement) Rules, 2002, it was held by the learned Single Judge in paragraphs 13.1, 13.2 and 13.3 as under :- “13.1. A perusal of the proviso reveals that if sale of immovable property by any of the methods as stipulated under Rule 8(5) fails, and the sale is required to be conducted again, then the authorized officer could issue public notice and notice to the borrower of not less than 15 days. The same is an exception to Rule 9(1) which states that in the first instance, no sale of immovable property could take place before expiry of 30 days from the date of issuance of public notice and the notice of sale has been served to the borrower. Now, a close reading of the proviso would reveal that the legislature did not intend to empower the authorized officer to issue notice with a constricted period when the subsequent sale is by any other method than the method which had failed at the first instance. Now, a close reading of the proviso would reveal that the legislature did not intend to empower the authorized officer to issue notice with a constricted period when the subsequent sale is by any other method than the method which had failed at the first instance. Such an intent becomes clear since the words ‘by any one of the methods’ is used to denote the failed proposal to sale and whereas as far as the sale which is proposed to be conducted again, the words ‘by any other method/by any other method than the one which had failed’ is absent. 13.2. In the considered opinion of this Court, in absence of such terminology being used, the logical deduction would be that the proviso could only be read to mean that in case if a proposal to sale by any one of the methods specified under sub-rule (5) of Rule 8 had failed and if the sale is required to be conducted again by the very method, then the authorized officer shall be required to issue a notice of not less than 15 days. 13.3. The above reading would necessarily imply that if the sale is by any other method than method which had failed i.e. any other method as specified in sub-rule (5) of Rule 8, then necessarily notice should be of not less than 30 days i.e. public notice as prescribed in proviso to sub-rule (6) of Rule 8 or notice to the borrower as provided in Rule 8(6) of the Security Interest (Enforcement) Rules, 2002.” 16. With the above reasoning, it was concluded that though the Secured Creditor does not appear to have violated Rule 8(5) of the Security Interest (Enforcement) Rules, by getting the valuation of the property by the Government Approved Valuer, but it had clearly violated the mandate of proviso to Rule 8(6) of the Security Interest (Enforcement) Rules and also misread and violated the requirement of Rule 9(1) of the said Rules. 17. Placing the above material facts on the record, it was vehemently argued by the learned counsel for the Secured Creditor that the present was a case where the original petitioners/borrowers had remained willful defaulters. 17. Placing the above material facts on the record, it was vehemently argued by the learned counsel for the Secured Creditor that the present was a case where the original petitioners/borrowers had remained willful defaulters. Once the borrowers had failed to comply with the directions in the order dated 15.01.2019 of the DRT to pay overdue installments and overdue amount on or before 30.03.2019, there was no impediment with the Secured Creditor to proceed pursuant to the possession notice dated 15.03.2018 under Section 13(4) of the SARFAESI Act, 2002. The measures taken by the Secured Creditor after 15.01.2019, in taking possession of the disputed property in question (secured asset) on 25.01.2019 and, thereafter, proceeding to auction the same, in view of the default on the part of the respondent borrowers, cannot be said to suffer from any error of law that too on technical grounds. 18. The indulgence granted by the DRT in the order dated 15.01.2019 on the assurance given by the counsel for the applicants/original petitioners that all grounds taken in the securitization application may be treated as relinquished and waved off and in case of default, the bank may proceed on the demand notice and possession notice already issued, had been utterly misused by the respondent borrowers. The submission is that the contentions of the borrowers that they were not informed of the outstanding amount prior to the issuance of the three auction notices dated 12.02.2021, 21.03.2021 and 19.04.2021, and as the correct price was not reflected, the original petitioners (borrowers) could not exercise their right to redeem the mortgage under Section 13(8) of the Act, 2002, prior to the sale of the secured asset by private treaty dated 28.06.2021, are all misconceived. 19. It was urged that at the stage of three auction notices noted above, at no point of time, the respondent borrowers came forward to deposit the outstanding dues through the date of sale by public auction was duly indicated therein. There has been no attempt on the part of the respondent borrowers after 30.11.2019 to clear the dues prior to the first, second or third auction notice or the current proceeding for sale by private treaty. 20. The second Securitization Application filed on 25.06.2021, namely S.A. No.183 of 2021 was nothing but a desperate attempt of the borrowers to thwart the entire process. 20. The second Securitization Application filed on 25.06.2021, namely S.A. No.183 of 2021 was nothing but a desperate attempt of the borrowers to thwart the entire process. The finding returned by the learned Single Judge that the sale conducted by private treaty on 28.06.2021 was hit by the mandate of the proviso to Rule 8(6) as well as in violation of requirement of Rule 9(1) of the Security Interest (Enforcement) Rules, 2002, is in ignorance of the above-noted material aspects of the matter. 21. Reliance is placed by the learned counsel for the appellant bank on the decision of the Apex Court in the case of Celir LLP vs. Bafna Motors (Mumbai) Private Limited and others, being Civil Appeal Nos.5542-5543 of 2023, dated 21.09.2023 to assert that with the amendment of Sub-section (8) of Section 13 of the SARFAESI Act, 2002, with effect from 01.09.2016, the right of the borrowers to redeem the secured asset stood extinguished, on the very date of publication of notice for public auction under Rule 9(1) of the Rules, 2002. Further, placing decision of the Apex Court in Arce Polymers Pvt. Ltd. vs. M/s. Alphine Pharmaceuticals Pvt. Ltd. and others, being Civil Appeal No.7372 of 2021, it was argued that with the issuance of three auction notices dated 12.02.2021, 21.03.2021 and 19.04.2021 as also the notice sent on 12.06.2021 for sale by private treaty, and the fact that the borrowers did not make any effort to redeem the mortgage prior to the date of the first notice of auction, i.e. 12.02.2021, the borrowers have waived their right to seek for the redemption of the secured asset. They cannot be permitted to challenge that the last notice dated 12.06.2021 for sale by private treaty was defective being not proceeded by 30 days from the date of sale and the sale concluded on 26.08.2021 is liable to be set aside being hit by the mandate of the proviso to Rule 8(6) read with Rule 9(1) of the Rules, 2002. The contention is that by his own conduct, the borrowers have disentitled themselves to seek any indulgence or to challenge the sale. No prejudice caused to the borrowers could be shown by them by the mere fact that the notice dated 10.06.2021 was not sent to the borrowers 30 days before the date of sale. 22. The contention is that by his own conduct, the borrowers have disentitled themselves to seek any indulgence or to challenge the sale. No prejudice caused to the borrowers could be shown by them by the mere fact that the notice dated 10.06.2021 was not sent to the borrowers 30 days before the date of sale. 22. The learned counsel for the respondent borrowers, however, referring to the reasoning given by the learned Single Judge as also the order passed by the Debt Recovery Tribunal dated 10.01.2022 seeks to submit that the instant appeal deserves to be dismissed being devoid of merits. 23. We may further note that on 03.10.2023, on the date of hearing of the instant appeal, an affidavit-in-reply was filed by the respondent borrowers stating therein that it was incumbent on the bank to issue fresh notice of sale of property on any of the mode as is specified in Rule 8(5) of the Security Interest (Enforcement) Rules, 2002 and more particularly stating exact amount therein, to provide an opportunity to the borrowers to clear the entire outstanding amount of loan and the steps for sale of the secured asset could be taken only in case of non-deposit. It is further stated that no notice to provide an opportunity to the borrowers to clear the entire outstanding loan amount was given. By a letter dated 24.08.2023, the borrowers had approached the bank to pay the outstanding amount. An email dated 05.01.2023 has been appended with the said affidavit to assert that the borrowers had gone to the bank with a Demand Draft dated 19.06.2023 for an amount of Rs.5,00,000/-, a cheque dated 19.06.2023 for Rs.2,50,000/-, a Pay Order dated 23.06.2023 for Rs.6,00,000/-, other Demand Drafts for Rs.7,00,000/- dated 26.03.2023 and dated 01.08.2023 for Rs.7,00,000/-. The statements in paragraph ‘7’ of the affidavit-in-reply are to the effect that the Demand Draft/Banker’s Cheque/Pay Orders appended with the affidavit as Annexure-C (Colly.) are the proof of the fact that the borrowers had always been ready and willing to repay the entire outstanding amount of loan. It is then stated that the borrowers had even gone to the Secured Creditor with an amount of Rs.5,17,728/- in cash to show their willingness to clear the dues but the Bank Officers had refused to accept the said amount. It is then stated that the borrowers had even gone to the Secured Creditor with an amount of Rs.5,17,728/- in cash to show their willingness to clear the dues but the Bank Officers had refused to accept the said amount. Repeated assertions in the aforesaid affidavit of the borrowers are to the effect that the borrowers are still willing to repay the entire outstanding and it is asserted that they are also in a position to pay Rs.35,07,728/-at one go, but the bank authorities are not accepting the payment. A contempt petition, namely C.M.A. (F) No.27962 of 2023 has also been preferred before this Court on account of violation of the directions contained in the judgment impugned, which is pending as on date. 24. Having gone through the above noted facts, we are first required to note the statutory provisions relevant for our purposes. Section 13(8) of SARFAESI Act, 2002, Rules 8(5), 8(6), 8(7), 8(8) and Rule 9(1) of the Security Interest (Enforcement) Rules, 2002 are relevant to be extracted hereinunder :- “13. Enforcement of security interest - *** *** *** (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 step shall be taken by such secured creditor for transfer by way of lease or assignment or sale of such secured assets.] 8. Sale of immovable secured assets :- *** *** *** (5) Before effecting sale of the immovable property referred to in sub-rule (1) of rule 9, the authorized 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 including through e-auction mode; or] (d) by private treaty. (6) The authorized 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 including 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 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) deposit of earnest money as may be stipulated by the secured creditor; (f) any other terms and conditions, which the authorized officer considers it necessary 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 creditors and the proposed purchaser in writing]. 9. Time of sale, issue of sale certificate and delivery of possession, etc. 9. Time of sale, issue 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) of rule 8 or notice of sale has been served to the borrower: 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 authorized officer shall serve, affix and publish notice of sale of not less than fifteen days to the borrower, for any subsequent sale.]” 25. A careful reading of Sub-section (8) of Section 13, amended with effect from 01.09.2016 indicates that it is open for the borrowers to tender the amount of dues of the Secured Creditor together with all cost, charges and expenses incurred by him, at any time, before the date of publication of notice for public auction or inviting quotations or tender for public or private treaty, for transfer by way of lease, assignment or sale of the secured asset. Only in the eventuality the borrower tenders the aforesaid amount, the bank is estopped from transferring the secured asset by the above stated mode and in case any such step has already been taken before tendering of such amount under Sub-section (8), no further steps can be taken. The reading of Sub-section (8) of Section 13, thus, make it evident that a window is provided to the borrowers to make a last attempt to repay the entire outstanding including cost etc., so as to stop the bank from alienating the secured asset for recovery of its dues. The outstanding amount, however, can be tendered till the date of publication of notice for taking measures for transfer as per the mode provided in the said provision. In any case, from the language employed in Sub-section (8) of Section 13, it cannot be inferred that at any point of time prior to the notice for sale, the bank was required to invite the borrowers to pay the outstanding dues. The bank or the Secured Creditor is not obliged to call upon the borrower to clear the dues before proceeding for the sale of the secured asset. 26. The bank or the Secured Creditor is not obliged to call upon the borrower to clear the dues before proceeding for the sale of the secured asset. 26. The manner in which the sale of immovable secured asset has to be conducted, has been enumerated in Rule 8 and 9 of the Security Interest (Enforcement) Rules, 2002. Sub-rule (5) of Rule 8 provides that the authorized officer shall obtain valuation of the property from an approved valuer to fix the reserved price of the property in consultation with the bank before effecting sale of the immovable property referred to in Sub-rule (1) of Rule 9. The sale of whole or any part of such immovable secured asset can be effected by any of the methods provided in Clause (a) to (d) to Rule 8(5). 27. Sub-rule (6) of Rule 8 further says that the authorized officer shall serve to the borrower a notice of thirty days for sale of the immovable secured asset, under Sub-rule (5). The proviso to Sub-rule (6) further states that where the sale of secured asset is being effected by either inviting tender from the public or by holding public auction, a public notice in the form given in Appendix IV-A is to be published in two leading newspapers including one in vernacular language having wide circulation in the locality. Sub-rule (7) further states that every notice of sale shall be affixed on the conspicuous part of the immovable property and the detailed terms and conditions of the sale shall be uploaded on the website of the secured creditor, which shall include the information as per Clauses (a) to (f) of the said sub-section. The terms and conditions of sale as provided in Sub-section (7) are for the information of the proposed auction purchasers/tenderers. Sub-rule (8) of Rule 8 deals with the sale by methods other than public auction or public tender and mandates that such sale shall be on such terms as may be settled between the secured creditors and the proposed purchaser in writing. 28. Sub-rule (8) of Rule 8 deals with the sale by methods other than public auction or public tender and mandates that such sale shall be on such terms as may be settled between the secured creditors and the proposed purchaser in writing. 28. Sub-rule (1) of Rule 9 is sought to be pressed into service by the counsel for the respondent borrowers to assert that when the mode of sale was changed by the Secured Creditor (bank) from public auction to sale by private treaty, it was incumbent upon it to serve a prior notice of thirty days, for effecting sale of the immovable property as per Rule 8(6) read with Rule 9(1). The notice dated 10.06.2021 sent on 12.06.2021 for the sale of secured asset by private treaty being in violation of the aforesaid rules cannot be sustained. 29. Dealing with the said submission, we are required to note that as per the mandate of Rule 8, the authorized officer has to serve to the borrower a notice of thirty days for sale of the immovable secured asset under Sub-rule (5), by any of the four methods of disposal of the immovable secured asset. Sub-rule (1) of Rule 9 mandates that the sale of immovable property in the first instance cannot take place before the expiry of thirty days from date on which the public notice of sale is published in newspapers as per Rule 8(6), or notice of sale has been served to the borrower. Meaning thereby, first auction sale cannot be held in a period of less than thirty days from the date of publication in the newspapers in a case of public auction, or within thirty days from the date of service of notice to the borrower through any other mode. 30. In the instant case, three auction notices dated 12.02.2021, 21.03.2021 and 19.04.2021 were served upon the respondent borrowers, but they did not come forward to exercise their right under Section 13(8) to tender the outstanding amount of loan with charges etc. When the Secured Creditor has failed to succeed in the public auction, it finally proceeded to dispose of the property by private treaty for which advance notice dated 10.06.2021 was sent on 12.06.2021 to the borrowers by registered post and affixed on 10.06.2021 on the property itself. When the Secured Creditor has failed to succeed in the public auction, it finally proceeded to dispose of the property by private treaty for which advance notice dated 10.06.2021 was sent on 12.06.2021 to the borrowers by registered post and affixed on 10.06.2021 on the property itself. It is not the case of the respondent borrowers that they were not served with any of the above notices. It is also not the case of the respondent borrowers that they have tendered or made any attempt to tender the outstanding amount as per Section 13(8), prior to the first notice dated 12.02.2021. The second two auction notices dated 21.03.2021 and 19.04.2021, being subsequent sale notices, the borrowers cannot raise any dispute. 31. The only challenge to the measures taken by the Secured Creditor for disposal of the immovable asset is that the notice dated 10.06.2021 sent on 12.06.2021 intimating the sale by private treaty was bad being not in conformity with Rule 8(6). The contention is that once the Secured Creditor had proceeded to change the mode of sale, from public auction to private treaty, minimum thirty days notice was required to be given in view of Rule 8(6) read with Rule 9(1) of the Rules, 2002. Rule 9(1) mandates that sale of any immovable property, in the first instance, cannot take place before the expiry of thirty days from the date on which the notice of sale (by private treaty) has been served to the borrowers. The proviso to Sub-rule (1) of Rule 9 will not save the action of the Secured Creditor as it was the first sale by private treaty and cannot be termed as subsequent sale on account of failure of the first sale within the meaning of the said proviso. 32. Testing this submission, we are required to reiterate some facts of the instant case. This is one of those cases where the borrowers have kept silence for a long time. At the first instance, indulgence was granted to the borrowers by order dated 15.01.2019, passed by Debt Recovery Tribunal on their prayer that they were ready and willing to repay the entire dues and on the undertaking given by them before DRT that in case of failure on their part, it would be open to the Secured Creditor to proceed with the measures taken by it under the SARFAESI Act, 2002. Before the first auction notice issued in the month of February, 2021, the borrowers have failed to tender the outstanding dues. 33. They have approached the Debt Recovery Tribunal in the second round only on 25.06.2021, to challenge the notice dated 10.06.2021 sent on 12.06.2021 for sale by private treaty. Before the Debt Recovery Tribunal, the contention raised by the borrowers was that the Secured Creditor did not obtain the correct valuation of the secured asset before putting the property to auction and that three auction sale notices were required to be set aside. The Debt Recovery Tribunal, however, illegally proceeded on the premise that three auction sale notices were in violation of mandatory provisions of Rule 8(5) of the Security Interest (Enforcement) Rules, 2002 and further the Secured Creditor had committed illegality in sale of secured asset by private treaty which smacks of collusion/fraud. 34. The above findings returned by the Debt Recovery Tribunal could not be sustained before the Writ Court, inasmuch as, the Writ Court did not find any illegality in the three auction notices or any stage of the sale in question and held that the valuation of the secured asset was duly obtained and the Secured Creditor cannot be said to have erred in fixing the reserved price of the secured asset. 35. The relevant is to note that in all the stages of the measures taken by the Secured Creditors, the borrowers instead of making any effort to redeem the secured asset had tried to thwart the efforts made by the Secured Creditor to recover its dues. Despite repeated positive acts of the Secured Creditor in granting indulgence to repay there was no attempt on the part of the borrowers. The three auction notices sent to the borrowers were well within time. Noticable is that the borrowers did not challenge any of these three auction notices and approached the Debt Recovery Tribunal in the second round only when the notice for sale by private treaty dated 10.06.2021 was served on them. 36. There is an express and deliberate conduct of the borrowers to delay the action on the subject property. The proceedings under the SARFAESI Act, 2002 had been initiated with the first demand notice under Section 13(2) dated 16.10.2017. The notice of possession under Section 13(4), as noted above, was issued on 15.03.2018. 36. There is an express and deliberate conduct of the borrowers to delay the action on the subject property. The proceedings under the SARFAESI Act, 2002 had been initiated with the first demand notice under Section 13(2) dated 16.10.2017. The notice of possession under Section 13(4), as noted above, was issued on 15.03.2018. The borrowers did not honour the commitment made by them to the Debt Recovery Tribunal in the order dated 15.01.2019 and, thus, succeeded in delaying the action on the subject property for a period of six years from its inception. 37. In spite of repeated indulgence granted by the Secured Creditor and the Debt Recovery Tribunal, the borrowers did not make any effort to regularize the account. 38. As held by the Apex Court in Celir LLP (supra), the right of the borrowers to redeem the secured asset stands extinguished on the very date of publication of the notice for public auction under Rule 9(1) of the Rules, 2002, which is 12.02.2021 in the instant case. As the said notice has not been challenged, the subsequent sale notices dated 21.03.2021 and 19.04.2021 cannot be permitted to be assailed. With the extinction of right to redeem the mortgage on 12.02.2021, on any of the subsequent notices issued by the Secured Creditor informing the borrowers for any subsequent sale, there was no question of revival of the said right. 39. Further, even with the change of mode of sale from public auction to private treaty, due to the fact that the bank had failed to dispose of the secured asset by way of public auction despite three attempts made by it, it would have no bearing, insofar as the right to redeem conferred on the borrowers under Section 13(8) of the Act, 2002, inasmuch as, the right of the borrower, even if can be said to have been revived after the third sale notice dated 19.04.2021, did not materialize, would stand extinguished on 10.06.2021 – the date of the publication of the notice intimating sale by private treaty. The period of thirty days between the date of service of said notice to the date of sale, as required in Rule 9(1) of the Rules, 2002, will have no bearing on the exercise of right of the borrower to redeem the mortgage under Section 13(8) of the Act. 40. The period of thirty days between the date of service of said notice to the date of sale, as required in Rule 9(1) of the Rules, 2002, will have no bearing on the exercise of right of the borrower to redeem the mortgage under Section 13(8) of the Act. 40. Elaborating further, the object and purpose of Sub-section (8) of Section 13 of the Act, 2002 is to provide a last chance to the borrower to reclaim the secured asset and as soon as the bank proceeds with the publication of the notice inviting for sale by giving due information to the borrower, the right of the borrower to redeem the secured asset stood extinguished. The cut off date as per Section 13(8) is the date of publication of notice, whether for public auction or inviting quotations or tender from public or private treaty – for sale or transfer. Any subsequent date to the date of service of notice upon the borrower in case of sale by private treaty or the date of sale subsequent thereto will have no consequence at all. 41. For the above discussion, the reasoning given by the learned Single Judge that since the bank had changed the mode of sale, in absence of mandatory thirty days prior notice under Sub-rule (1) of Rule 9 the sale would be bad, does not appeal to us. The notices of first instance as per Rule 9(1) of the Rules, 2002, in the instant case, being 12.02.2021 (for public auction) and further on 10.06.2021 (for private treaty), when the rights of the borrowers to redeem the secured asset had been extinguished, no further indulgence can be granted. 42. Further, the Debt Recovery Tribunal has committed grave error of law in sustaining the challenge to three auction notices dated 12.02.2021, 21.03.2021 and 19.04.2021 on the premise that the correct valuation of the secured asset was not fixed prior to the issuance of auction sale notice. No mala fide or any other illegality in the sale by public treaty confirmed on 28.06.2021 could be alleged or demonstrated before us. 43. In the totality of the facts and circumstances of the instant case, the only ground of challenge to the sale held on 28.06.2021 being completed in less than thirty days of the notice dated 12.06.2021 in violation of Rule 9(1) of the Rules, 2002, cannot be sustained. 43. In the totality of the facts and circumstances of the instant case, the only ground of challenge to the sale held on 28.06.2021 being completed in less than thirty days of the notice dated 12.06.2021 in violation of Rule 9(1) of the Rules, 2002, cannot be sustained. The judgment and order dated 03/04.08.2023 passed by the learned Single Judge, thus, is liable to be set aside. While setting aside the same, the appeal stands allowed. Consequently, the connected Civil Application also stands disposed of. The order dated 06.01.2023 passed by the Debt Recovery Appellate Tribunal, Mumbai in Appeal No.8 of 2022 is hereby affirmed.