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Gujarat High Court · body

2023 DIGILAW 947 (GUJ)

Dharmendra Popatlal Patel v. IDFC First Bank Ltd.

2023-08-04

NIKHIL S.KARIEL

body2023
JUDGMENT : Nikhil S. Kariel, J. 1. Rule. Learned advocates for the respective parties waive service of rule on behalf of the respective respondents. With the consent of the parties, the matter has been taken for final hearing. 1.1. Heard learned advocate Mr. Mahesh Bhavsar on behalf of the petitioners, learned advocate Ms. Shivani Rajpurohit appearing with learned advocate Mr. Rahul Barot on behalf of respondent no.1 – Bank, learned Assistant Government Pleader Mr. Jay Trivedi on behalf of respondent no.2 and learned advocate Mr. Bhagirath Patel on behalf of respondent no.3. 2. By way of this petition, the petitioner challenges an order dated 06.01.2023 passed by learned Debt Recovery Appellate Tribunal, Mumbai in Appeal No. 08/2022 whereby an order of the learned Debt Recovery Tribunal dated 10.01.2022 is quashed and set aside. It would appear that by way of order dated 10.01.2022, the learned DRT has inter alia set aside the sale by private treaty dated 28.06.2021 including the sale certificate of the same date issued by respondent no.1– Bank in favour of respondent no.3 herein and whereas, the said order had been set aside by the learned DRAT more particularly restoring the sale by way of private treaty. 3. The facts in brief are narrated as under:- 3.1. It would appear that the petitioner has availed of financial assistance from the respondent no.1 bank in terms of housing and furniture loan more particularly for purchasing and furnishing the property of the present petitioners and whereas, it would appear that the property in question i.e. the residential accommodation had been mortgaged with the respondent no.1 bank. 3.2. It would appear that since the applicants had not repaid the monthly installments in time, the respondent bank had issued a notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the SARFAESI Act’) on 16.10.2017 calling upon the petitioners as borrowers to repay the outstanding amount as mentioned in the demand notice till the date of realization. It would appear that the petitioners having been served with the notice and having been failed to repay the entire amount, a notice was given to the petitioners under Section 13(4) of the SARFAESI Act read with Rule 9 of the Rules on 15.03.2018 showing intent to take over possession of the property in question. 3.3. It would appear that the petitioners having been served with the notice and having been failed to repay the entire amount, a notice was given to the petitioners under Section 13(4) of the SARFAESI Act read with Rule 9 of the Rules on 15.03.2018 showing intent to take over possession of the property in question. 3.3. It would appear that pursuant to the said notice, the respondents had approached the District Magistrate, Surat for issuing appropriate order under Section 14 of the SARFAESI Act and whereas, it would appear that the District Magistrate had issued an order on 18.12.2018 authorizing the Mamlatdar to take possession of the property (secured asset) described in the very order. It would appear that the said order had been questioned by the petitioner before the learned DRT by preferring Securitisation Application No. 22/2010 and whereas vide an order dated 15.01.2019, more particularly, on a statement made on behalf of the petitioners that the petitioners would repay the outstanding within a specific period of time, learned DRT had directed the petitioners to pay the overdue amount on or before 30.03.2019 whereafter the bank would allow the petitioners to repay in normal installments and in case of default, the bank was empowered to proceed on the process already initiated. It was further clarified by the learned DRAT that the applicant would be liable to pay the entire outstanding in case of further default and the bank would be able to proceed in accordance with law. 3.4. It would appear that pursuant to the order passed by the learned DRT dated 15.01.2019, the petitioner had deposited an amount of Rs.5,87,000/- by 30.03.2019 and whereas, the petitioner had thereafter deposited an amount of Rs.5,82,000/- from 31.03.2019 to 30.11.2019, in total it would appear that the petitioner had deposited an amount of Rs.11,69,000/- with the respondent no.1 bank. It would appear that thereafter the petitioners had not repaid the installments of the bank, more particularly, according to the petitioners, on account of the COVID-19 pandemic. 3.5. Be that as it may, on account of the failure to repay the outstanding dues, the respondent – bank had taken possession of the property in question on 25.01.2021. It would appear that the outstanding as mentioned in the possession notice was Rs.41,28,311.89/- i.e. the same amount as had been mentioned in the notice under Section 13(2) as well as possession notice. 3.6. It would appear that the outstanding as mentioned in the possession notice was Rs.41,28,311.89/- i.e. the same amount as had been mentioned in the notice under Section 13(2) as well as possession notice. 3.6. It would appear that thereafter, the bank had issued three different notices for auction of the property in question i.e. on 12.02.2021, 21.03.2021 and 09.04.2021 wherein, the date of auction is mentioned as 15.03.2021, 06.04.2021 and 27.04.2021 respectively. It would be required to be mentioned here that originally in the auction notice dated 12.02.2021, the reserved price of the property was fixed at Rs.52,94,800/-and since the auction had failed on account of no bidders coming forward, in the second auction notice, the reserved price had been reduced to Rs.48,00,000/- and whereas since the said auction had also failed, in the third auction notice, the reserved price had been reduced to Rs. 44,06,000/- which auction also appears to have failed. 3.7. It appears that after the three auction notices resulted in no prospective bidders coming forward, the bank had issued a notice for sale through private treaty and whereas the date of sale through private treaty was mentioned as 28.06.2021 and whereas the price of the property was fixed at Rs.50,00,000/-. 3.8. It would appear that this public notice had been published in local newspapers on 10.06.2021 and whereas on the very date, the respondent no.1 – bank had caused to issue 15 days’ notice to the petitioners herein whereby, it was intimated to the petitioners that the petitioners were entitled to redeem the security by making entire payment of the dues due to the bank along with other expenses before the date of sale by private treaty. 3.9. It would appear that even before the date of sale by private treaty i.e. on 28.06.2021, the respondent no.3 is stated to have approached the bank and whereas vide a communication dated 08.06.2021, the respondent no.3 had submitted an offer to purchase the property on as is where is basis and as it what is basis for the amount fixed at Rs.50,00,000/-. It would also be pertinent to mention here that the respondent no.3 had issued a demand draft of the said date for a sum of Rs.10,00,000/- in favour of the respondent no.1 bank. It would also be pertinent to mention here that the respondent no.3 had issued a demand draft of the said date for a sum of Rs.10,00,000/- in favour of the respondent no.1 bank. The respondent no.3 had also stated that he would deposit an amount of Rs.5,00,000/- by 11.06.2021 and remaining Rs.35,00,000/- he would deposit within two days after receiving acceptance of the offer of respondent no.3 by respondent no.1. It would also appear that the respondent bank had sold the property to respondent no.3 on 28.06.2021, inasmuch as on MoU showing details of the sale had been entered into as well as sale certificate had also been issued on the same day in favour of respondent no.3 3.10. It appears that in the interregnum, the petitioners on 25.06.2021 approached the learned DRT by preferring a Securitisation Application No. 183/2021 and whereas originally, it would appear that the learned DRT had issued notice in the said securitisation application making it returnable on 29.06.2021 and whereas on 29.06.2021, the learned counsel appearing for the respondent no.1 was permitted to put up his appearance and whereas learned counsel had also informed the learned DRT about the sale certificate having been issued in favour of the purchaser. 3.11. It would appear that the learned DRT after hearing the parties had passed the judgment dated 10.01.2022 whereby the learned DRT had inter alia set aside the sale by private treaty in favour of the respondent no.3 dated 28.06.2021 and furthermore, the sale certificate dated 28.06.2021 issued by the bank in favour of the respondent no.3 was also set aside. 3.12. It would appear that the learned DRT had inter alia come to a conclusion as regards violation of mandatory provision of Rule 8(5) of the Security Interest (Enforcement) Rules, 2002 more particularly, according to learned DRT, the respondent bank did not obtain valuation of the property from an approved valuer before fixing reserved price of the property in question for auction. 3.13. The decision of the learned DRT had been challenged by the respondent bank before the learned DRAT who, vide order dated 06.01.2023 passed by the learned Chairperson, had set aside the order of the learned DRT dated 10.01.2022. 3.13. The decision of the learned DRT had been challenged by the respondent bank before the learned DRAT who, vide order dated 06.01.2023 passed by the learned Chairperson, had set aside the order of the learned DRT dated 10.01.2022. It would appear that the learned Tribunal had inter alia come to a conclusion that the petitioners herein could not have raised an objection with regard to noncompliance of rules or insufficiency of reserved price more particularly since the petitioners did not question the sale during the three attempted auctions. Inter alia coming to such a conclusion, the learned Appellate Tribunal had set aside the decision of the learned Tribunal and had restored the sale by private treaty in favour of respondent no.3 herein. 3.14. The petitioners have approached this Court by filing the present petition and whereas, the prayers made have been noted herein above. 3.15. It would appear that vide an order dated 07.02.2023, a learned Coordinate Bench of this Court had inter alia while issuing notice, recorded the statement on behalf of the petitioners that the entire amount of foreclosure or any other amount which may be outstanding due to the respondent bank, shall be paid on or before June, 2023 and whereas, in the meanwhile, ad-interim relied in terms of maintaining status-quo with regard to the property had been directed. It appears that the respondent no.1 had filed their reply on 25.02.2023 and whereas it also requires to be noted here that the petitioners have failed to pay the entire amount of foreclosure by the time as undertaken by the petitioners themselves and as recorded by the learned Coordinate Bench, though certain issues with regard to the conduct of the officers of the bank has also been raised, yet, the fact remains that the petitioners could not comply with their own statement. 3.16. Be that as it may, since in the considered opinion of this Court, nothing turns on the same as far as merits of the petition are concerned, therefore, this Court does not propose to enter into the disputes with regard to the non-payment of the dues by 30.06.2023. 4. Heard learned advocate Mr. 3.16. Be that as it may, since in the considered opinion of this Court, nothing turns on the same as far as merits of the petition are concerned, therefore, this Court does not propose to enter into the disputes with regard to the non-payment of the dues by 30.06.2023. 4. Heard learned advocate Mr. Mahesh Bhavsar on behalf of the petitioners who would submit that the learned DRT had not committed any error whatsoever more particularly, according to learned advocate, there had been an infraction of Rule 8(5) of the Security Interest (Enforcement) Rules, 2002, more particularly since valuation of the property had not been obtained before the property had been put to auction. Learned advocate would further submit that as such, in absence of any valuation, as noted by learned Tribunal, the basis for fixing the value 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. Learned advocate would submit that it is under these circumstances that the learned Tribunal had inter alia noted that there could be an aspect of fraud or collusion. 4.1. Learned advocate would further submit that as such, by way of order dated 11.01.2019 in Securitisation Application No. 22/2019 i.e. the first application preferred by the petitioners before the learned DRT challenging the measures under Section 13(4), the learned Tribunal had inter alia permitted the petitioners to pay certain amount by 30.03.2019 and whereas, the petitioners had paid a substantial amount by the said date and even after the said date. Learned advocate would submit that under such circumstances, the respondent bank was under an obligation to issue a fresh notice under Section 13(2) of the SARFAESI Act more particularly by revising the details of amount payable by the applicants. Learned advocate would submit that such a non-revision of the amount payable has prejudiced the present applicants inasmuch as in all subsequent notices including notice for taking possession of the property as well as notice informing about auction of the property and notice as regards selling the property by way of private treaty, the same amount which had figured in Section 13(2) notice prior to filing of SA No. 22/2019 was reflected, in spite of the fact that the substantial amount has been paid by the petitioners in the interregnum. Learned advocate would submit that the entire process adopted by the respondent bank is suffering from grave lacuna, the same deserves to be interfered with by this Court. 4.2. Learned advocate would submit that as such, learned DRAT had committed grave error in setting aside the order passed by the learned DRT more particularly since it appears that the learned DRAT had not appreciated the issue in its proper perspective. Learned advocate would submit that the learned DRAT notes that the petitioners had approached the learned DRT with the Securitisation Application No. 183/2021 on 25.06.2021 only when the sale had concluded on 08.06.2021 which, according to learned advocate, is factually incorrect observation. Learned advocate would submit that the petitioners had approached the learned DRT on 25.06.2021 and whereas, as per the notice for sale by private treaty, the same was to be conducted on 28.06.2021 and whereas from the record, it clearly appears that the MOU and sale certificate had been issued on 28.06.2021 and not on 08.06.2021 as noted by the learned DRAT. 4.3. Learned advocate would further submit that as such, the petitioners in the securitisation application had challenged all the three auctions as well as the notice for sale through private treaty and whereas, learned DRAT ought not to have held that the petitioners had not raised any objection as regards the three attempted auctions. In view of such submissions, learned advocate would request this Court to set aside the order passed by the learned DRAT and restore the order passed by the learned DRT. 5. This petition is vehemently objected to by learned advocate Ms. Shivani Rajpurohit appearing with learned advocate Mr. Rahul Barot on behalf of respondent no.1 – bank. 5.1. Learned advocate would submit that the present is a case of a borrower who neither maintained financial discipline nor had approached the competent forum at the appropriate time and is now questioning the measures taken by the bank, more particularly, by invoking sympathy. Learned advocate would submit that as such, when the petitioners had approached the learned DRT in the first instance by preferring SA No. 22/2019, the applicants had made a very specific statement before the learned DRT that in case the applicants are not able to pay the overdue amount before 30.03.2019, the grounds taken in the said securitisation application may be treated as relinquished and waived. Learned advocate would submit that having regard to such submission, the learned DRT while passing the order dated 11.01.2019 had inter alia observed that if the applicants default in making payment as undertaken, then the bank would be able to proceed on the process already initiated. Learned advocate would submit that it is under such circumstances that the respondent bank had moved ahead with the measures which had commenced upon issuance of the notice under Section 13(2) prior to filing of the said SA. Learned advocate would submit that it is in this context that the amount in all later notices issued to the petitioners reflected the same amount as reflected in Section 13(2) notice. 5.2. Learned advocate would further submit that the non-stating of the correct outstanding amount would not prejudice the present petitioners more particularly since the statement of account would also reflect the correct amount of outstanding due from the petitioners. Learned advocate would further submit that as such, the applicants had waived challenge to all the proceedings before the stage of auction of the property. Learned advocate would submit that even the auction had been challenged by the petitioners after the three auctions had remained unsuccessful and the respondent no.1 bank had issued notice for sale by way of private treaty. Learned advocate would submit that while the learned DRAT had rightly come to a conclusion that the petitioners would not be entitled to contend any breach of Rule 8(5) of the Security Interest (Enforcement) Rules, more particularly, since the petitioners had not questioned the auction notices issued before the notice for sale by way of private treaty. 5.3. In any case, learned advocate would submit that while the learned DRT had set aside the sale by private treaty on the ground that Rule 8(5) of the Security Interest (Enforcement) Rules had been breached on account of valuation of the property not being done before the auction and whereas learned advocate would submit that the same was an erroneous finding more particularly since the respondent bank had done the valuation of the property by a government approved valuer who had submitted his report on 04.02.2021 prior to the first auction notice. 5.4. 5.4. Referring to the valuation report which is annexed with the affidavit-in-reply, learned advocate would submit that the market value of the property had been fixed by the valuer at Rs.66,18,500/- and the forced sale value (distress sale value) was fixed at Rs.46,32,950/- and whereas it was on this basis that the reserved price for auction had been fixed. Learned advocate would submit that even insofar as the notice for sale by private treaty is concerned, the same was issued on 10.06.2021 in two newspapers and whereas even a notice had been issued to the petitioners dated 10.06.2021 giving the petitioners as borrowers, 15 days’ notice informing them about the proposed sale of the property by private treaty on 28.06.2021. Learned advocate would submit that the petitioners did not respond to the said notice and whereas, the petitioners had a few days before the proposed date of sale by way of private treaty, approached the learned Tribunal by filing SA No. 183/2021. Learned advocate would submit that in the interregnum, the respondent no.3 had approached the bank proposing to purchase the property at the value fixed by the bank and whereas the bank had on 28.06.2021 entered into an MOU as well as issued a sale certificate in favour of the respondent no.3. 5.5. Learned advocate would submit that since the petitioners did not pay the entire outstanding along with other expenses before the date of sale by private treaty and since on the other hand the learned Tribunal did not grant any interim relief, therefore, the action of the respondent bank was completely in accordance with law and whereas, recognizing the same, the learned DRAT had set aside the order passed by the learned DRT. Thus submitting, learned advocate Ms.Rajpurohit would request this Court to reject this petition. 6. Learned advocate Mr. Bhagirath Patel on behalf of respondent no.3 would submit that the respondent no.3 had responded to the notice issued by the bank for sale by way of private treaty, more particularly, the respondent no.3 having approached the bank and had given, as per the learned advocate Mr. 6. Learned advocate Mr. Bhagirath Patel on behalf of respondent no.3 would submit that the respondent no.3 had responded to the notice issued by the bank for sale by way of private treaty, more particularly, the respondent no.3 having approached the bank and had given, as per the learned advocate Mr. Patel, ‘communication dated 08.06.2021 at the instance of the bank’ whereby the respondent no.3 had agreed to purchase the property and had paid an amount of Rs.10,00,000/- on the same date to the respondent bank undertaking to pay Rs.5,00,000/- by 11.06.2021 and remaining amount of Rs.35,00,000/- within two days from receiving acceptance of offer in writing. Learned advocate would submit that the respondent no.3 had acted as a bona fide purchaser and whereas the rights of respondent no.3 may be protected by this Court. 6.1. In alternative, it is submitted by learned advocate that in case this Court were to interfere in the sale by private treaty as directed by the learned DRT, the bank may be directed to refund the sale amount with interest at the rate of 9% within a stipulated time. 7. Heard learned advocates for the respective parties who have not submitted anything else and perused the record of the petition. 7.1. Considering the submissions made by learned advocates for the respective parties, it would appear that the petitioners have raised two contentions i.e. as regards breach of Rule 8(5) of the Security Interest (Enforcement) Rules more particularly on account of there being no valuation of the property before the reserved price had been fixed and as regards the respondent bank not modifying the amount due to the bank from the petitioners in the possession notice as well as all other subsequent proceedings in spite of a substantial amount being paid by the petitioners in the interregnum. On the other hand, the main contention of the respondent bank being that the learned Tribunal had committed an error and whereas, it is further contended that erroneous mentioning of amount in the possession notice as well as subsequent notices was corelatable to the amount mentioned in Section 13(2) notice whereas since the proceedings had continued from the stage it had been stalled, therefore, as per the observation of the learned Tribunal vide order dated 11.01.2019 in SA No. 22/2019, the petitioners were well within the law to do the same. 7.2. 7.2. Considering the submission insofar as the issue of breach of Rule 8(5) of the Security Interest (Enforcement) Rules, 2002, as contended by the petitioners and as upheld by the learned DRT vide order dated 10.01.2022, it would appear that the said contention is completely without any basis. It would appear that the respondent no.1 bank had caused a valuation of the property done on 04.02.2021 i.e. prior to the date of the first auction notice and whereas copy of the same has also been produced by the respondent bank in their affidavit-in-reply which valuation report does not appear to be questioned by the petitioners by filing any counter thereto. In the considered opinion of this Court, once the aspect of valuation having been carried out appears on record on a date prior to the date when the auction notice had been published and the price fixed by the respondent bank reasonably corresponds to the distress value of sale of the property in question, a contention that the sale is attempted to be effected without obtaining valuation in breach of Rule 8(5) of the Security Interest (Enforcement) Rules, cannot be countenanced. 7.3. Insofar as the second contention with regard to the possession notice etc. stating erroneous amounts, it requires to be mentioned that the petitioners had initially approached the learned DRT by way of SA No. 22/2019 inter alia questioning measures taken under Section 13(4) of the SARFAESI Act more particularly the action of the bank in proposing to take over possession of property with an aid of the order passed by the District Magistrate, Surat dated 18.12.2018 under Section 14 of the SARFAESI Act. It would be pertinent to mention that the measures taken by the bank were in pursuance to the first original notice under Section 13(2) of the SARFAESI Act dated 16.10.2017 whereby the outstanding amount mentioned was Rs.41,26,311.89/-. It would further appear that the learned DRT vide order dated 11.01.2019 on the basis of the statement made on behalf of the petitioners that they would pay Rs.1,40,000/- per month from January to March, 2019 and the overdue amount of Rs.5,87,000/- would be cleared by 30.03.2019 and whereas, if such amounts were paid, the bank would allow normal installments and in case of default the bank would be able to proceed on the process already initiated. 7.4. 7.4. It would appear that though the applicants, as noted herein above, made payment of Rs.5,87,000/- before30.03.2019, the applicants had after the 30.03.2019 i.e. from 31.03.2019 to 30.11.2019 paid an amount of Rs.5,00,000/- to the respondent bank. It would appear that though the petitioners had paid an amount of Rs.11,69,000/-, since regular installments were not being paid, the bank had taken over possession of the property on 25.01.2021 whereafter the bank had issued three different notices for auction of the property in question. It would appear from the record that three auction notices had been published by the respondent bank more particularly the first one on 12.02.2021 and upon the said auction not being successful, the second notice on 20.03.2021 and even the same not being successful, the third auction notice was published on 09.04.2021. In all the three notices, the outstanding due from the present petitioners was specifically mentioned as Rs.41,26,311/- as on 16.10.2017. It would also appear that in the notice for sale through private treaty which was published on 10.06.2021, the outstanding due from the petitioners was specifically mentioned as Rs.41,26,311.89/- and whereas the petitioners were called upon to pay the same before the said date, failing which, the bank would sell the property through private treaty. 7.5. It would also be pertinent to mention here that while in addition to publishing the auction notice in newspapers as per the requirement of Rule 8(2) of the Security Interest (Enforcement) Rules, 2002, the bank had caused notices to be issued to the petitioners as borrowers informing about the sale of immovable secured assets as per Rule 8(6) of the said Rules and whereas in the notices i.e. notices for auction as well as notice informing about proposed sale through private treaty, the bank had not mentioned the exact amount due from the borrowers i.e. the petitioners, on payment of which, the borrowers would be entitled to request for not auctioning the property or not selling the property. 7.6. In the considered opinion of this Court, while it is true that the learned DRT vide order dated 11.01.2019 had permitted the respondent bank to proceed further in case of default, yet, such proceeding further should have taken into account the fact of the applicants having paid a reasonably substantial sum to the respondent bank, more particularly, in context of the total loan amount. The petitioners had availed of a total loan of Rs.39,00,000/- and whereas the petitioners, including the amount of Rs.11,69,000/- referred to herein above paid pursuant to the order dated 11.01.2019, whereas in total an amount of Rs.22,55,912/- is paid to the respondent bank. Thus, while the amount outstanding as on date of Section 13(2) notice may have been 41,26,311.89/- yet, the respondent bank should have mentioned the actual amount outstanding due from the petitioners on the date of the auction notices or the notice for sale by private treaty, more particularly, in the considered opinion of this Court, such mentioning of the exact/correct figure would sub-serve the purpose of Section 13(8) of giving opportunity to the borrower to take all efforts to safeguard his right of ownership by tendering the dues to the creditor before the date and time of sale or transfer. 8. In this regard, it would be relevant to rely upon observations of the Hon’ble Apex Court in case of Mathew Varghese vs. M. Amritha Kumar and Others; reported in (2014) 5 SCC 610 . Paragraph nos. 29.1, 29.2, 29.3, 29.4 and 30 being relevant for the present purpose are reproduced herein below for benefit:- “29.1 A plain reading of sub-section (8) would show that a borrower can tender to the secured creditor the dues together with all costs, charges and expenses incurred by the secured creditor at any time before the date fixed for sale or transfer. In the event of such tender once made as stipulated in the said provision, the mandate is that the secured asset should not be sold or transferred by the secured creditor. It is further reinforced to the effect that no further step should also be taken by the secured creditor for transfer or sale of the secured asset. The contingency stipulated in the event of the tender being made by a debtor of the dues inclusive of the costs, charges, etc., would be that such tender being made before the date fixed for sale or transfer, the secured creditor should stop all further steps for effecting the sale or transfer. That apart, no further step should also be taken for transfer or sale. That apart, no further step should also be taken for transfer or sale. 29.2 When we analyse in depth the stipulations contained in the said sub-section (8), we find that there is a valuable right recognised and asserted in favour of the borrower, who is the owner of the secured asset and who is extended an opportunity to take all efforts to stop the sale or transfer till the last minute before which the said sale or transfer is to be effected. Having regard to such a valuable right of a debtor having been embedded in the said sub-section, it will have to be stated in uncontroverted terms that the said provision has been engrafted in the Sarfaesi Act primarily with a view to protect the rights of a borrower, inasmuch as, such an ownership right is a constitutional right protected under Article 300-A of the Constitution, which mandates that no person shall be deprived of his property save by authority of law. 29.3 Therefore, dehors the extent of borrowing made and whatever costs, charges were incurred by the secured creditor in respect of such borrowings, when it comes to the question of realising the dues by bringing the property entrusted with the secured creditor for sale to realise money advanced without approaching any court or tribunal, the secured creditor as a trustee cannot deal with the said property in any manner it likes and can be disposed of only in the manner prescribed in the Sarfaesi Act. 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. 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.” 8.1. From the above observations of the Hon’ble Apex Court, analyzing the provisions of Section 13(8) of the SARFAESI Act, it would appear that a borrower is empowered to tender to the secured creditor the dues together with all costs, charges and expenses incurred by the secured creditor at any time before the date fixed for sale or transfer and upon such amount being paid, the section mandates that the secured asset should not be sold or transferred by the secured creditor. As per the Hon’ble Apex Court, Section 13(8) of the SARFAESI Act confers upon the borrower a valuable right to take 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. Such valuable right, according to the Hon’ble Apex Court, is engrafted with a view to protect the constitutional right protecting of ownership of property under Article 300-A of the Constitution. 8.2. Furthermore, from the analysis of the Hon’ble Apex Court, it would appear that the borrower to exercise his right claiming for stoppage of auction or sale is required to tender to the secured credit the dues together with all costs, charges and expenses incurred by the secured creditor at any time before the date fixed for sale or transfer. Such a requirement, in the considered opinion of this Court, necessarily postulates that the borrower is put to a notice of the exact amount due from him for enabling him to discharge the said debt for staying any proposed auction of sale or transfer. 9. Such a requirement, in the considered opinion of this Court, necessarily postulates that the borrower is put to a notice of the exact amount due from him for enabling him to discharge the said debt for staying any proposed auction of sale or transfer. 9. It would further appear that the Securitisation Act has been amended post the year 2014 i.e. after the judgment referred to herein above and whereas, for the purpose of the present petition, proviso to Rule 8(6) of the Security Interest (Enforcement) Rules, 2002 being the relevant provisions are reproduced herein below:- “8(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 including one in vernacular language having wide circulation in the locality.” 9.1. A plain reading of the proviso would show that before effecting sale of the secured asset, the secured creditor is required to issue a public notice in the prescribed format to be published in two leading newspapers. The said notice of sale as per the appendix IV-A inter alia requires mentioning of the amount due to the secured creditor from the borrower. Appendix IV-A reads thus:- [Appendix – IV-A] [See proviso to rule 8 (6)] Sale notice for sale of immovable properties E-Auction Sale Notice for Sale of Immovable Assets under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 read with proviso to Rule 8 (6) of the Security Interest (Enforcement) Rules, 2002 Notice is hereby given to the public in general and in particular to the Borrower (s) and Guarantor (s) that the below described immovable property mortgaged/ charged to the Secured Creditor, the constructive/physical ————— (whichever is applicable) possession of which has been taken by the Authorised Officer of ———– ———— Secured Creditor, will be sold on “As is where is”, “As is what is”, and “Whatever there is” on —- ——————– (mention date of the sale), for recovery of Rs. ————————–due to the ——————- —Secured Creditor from —————————————————- (mention name of the Borrower (s)) and – ——————————————–(mention name of the Guarantor (s)). ————————–due to the ——————- —Secured Creditor from —————————————————- (mention name of the Borrower (s)) and – ——————————————–(mention name of the Guarantor (s)). The reserve price will be Rs———- ———————and the earnest money deposit will be Rs——————————. (Give short description of the immovable property with known encumbrances, if any) For detailed terms and conditions of the sale, please refer to the link provided in ———————- Secured Creditor’s website i.e. www. (give details of website) Authorised Officer Date: Place: 9.2. The notice as per the format inter alia requires the secured creditor to mention the amount for recovery of which the sale notice is issued. Furthermore, pertinently the notice is issued not only to the general public, rather it is also a notice to the borrowers and the guarantors as regards the proposed sale for recovery of the amount mentioned. The requirement to mention the amount to be recovered would be consistent with the opportunity as envisaged under Section 13(8) of the SARFAESI Act as interpreted by the Hon’ble Apex Court in Mathew Varghese (supra) of affording an opportunity to the borrower till the last minute to stop the sale of property. Again, even otherwise when the statute prescribes a notice to be issued in a particular format, then the secured creditors are required to strictly adhere to the same. When the notice at Appendix IV-A envisages stating of amount to be recovered, then the exact amount to be recovered is to be mentioned rather than mentioning an amount which does not take into consideration substantial amount deposited in the interregnum. 9.3. Furthermore, read in context of the observations of the Hon’ble Apex Court herein above, it would clearly appear that to give the borrower an effective opportunity to tender the outstanding dues to the creditor, the exact amount due from the borrower would be required to be mentioned. 9.3. Furthermore, read in context of the observations of the Hon’ble Apex Court herein above, it would clearly appear that to give the borrower an effective opportunity to tender the outstanding dues to the creditor, the exact amount due from the borrower would be required to be mentioned. Bereft of the actual amount being informed to him in the public notice, more particularly when the notice under Rule 8(6) does not contain any details of the dues, the borrower would be absolutely at the mercy of the secured creditor as regards the details of his dues and whereas, considering the stringent conditions as envisaged in the Securitisation Act, the requirement of the provision would have to be strictly complied with as any default on the part of the borrower would lead to the possession of the secured asset being taken over and sold by the secured creditor to secure the debt due from the borrower. 9.4. Again, at this stage, it would be relevant to mention that the Hon’ble Apex Court has clearly laid down the dictum that the secured creditor as a trustee could not be entitled to deal with the property in any manner it likes and whereas, the property would only be disposed of in the manner as prescribed in the Securitisation Act. 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. 10.1. At this stage, it would also be relevant to mention that insofar as the liberty given by the learned DRT is concerned, more particularly as per the order dated 11.01.2019, it is the contention of the learned advocate for the respondent that in view of the waiver, the respondent bank could have started the proceedings from the stage where it had reached before the petitioners had approached the learned DRT by preferring the first application. In the considered opinion of this Court, in view of the liberty granted, the respondent bank was entitled to continue the proceedings further without issuing Section 13(2) notice afresh, yet, in continuing with these measures under Section 13(4), it was incumbent upon the respondent bank to have ensured that the petitioners were made aware in the notice for sale etc. as to the actual amount of outstanding due from him which would enable the borrower to try and attempt to pay the amount before the date of auction or the sate of sale by private treaty as the case may be. 11. At this stage, it would be relevant to state that learned counsel for the respondent had relied upon decision of the Hon’ble Apex Court in case of M/s. L&T Housing Finance Limited vs. M/s. Trishul Developers and Another [Civil Appeal No. 3413/2020; Dt. 27.10.2020] whereby, according to learned advocate for the respondent, the Hon’ble Apex Court had laid down the law regarding a technical defect in the notice under Section 13(2) of the SARFAESI Act ought not to result in the proceedings being interfered. It would be relevant to state here that the action on the part of the secured creditor had been challenged by the borrower inter alia on the various grounds and whereas demand notice under Section 13(2) and 13(4) of the SARFAESI Act had been set aside by the learned DRT inter alia on the ground that the same had not been validly issued since instead of correct name of the appellant, a defective name had been mentioned in the letterhead. The said order had been set aside by the learned DRAT and whereas, the order of the learned DRAT had been set aside by the High Court. In this context, observation of Hon’ble Apex Court at paragraph no.19 is as under:- “19. The said order had been set aside by the learned DRAT and whereas, the order of the learned DRAT had been set aside by the High Court. In this context, observation of Hon’ble Apex Court at paragraph no.19 is as under:- “19. In the facts and circumstances, when the action has been taken by the competent authority as per the procedure prescribed by law and the person affected has a knowledge leaving no ambiguity or confusion in initiating proceedings under the provisions of the SARFAESI Act by the secured creditor, in our considered view, such action taken thereof cannot be held to be bad in law merely on raising a trivial objection which has no legs to stand unless the person is able to show any substantial prejudice being caused on account of the procedural lapse as prescribed under the Act or the rules framed thereunder still with a caveat that it always depends upon the facts of each case to decipher the nature of the procedural lapse being complained of and the resultant prejudiced if any, being caused and there cannot be a straitjacket formula which can be uniformly followed in all the transactions. ” 11.1. In the considered opinion of this Court, the observations of the Hon’ble Apex Court does not advance the cause of the respondent inasmuch as, in the instant case, the lapse in question is not a procedural lapse but a substantive defect, since the borrower was not informed about the exact amount due from him and whereas, the same has prejudiced his right for attempting to repay the amount within the stipulated time to claim ownership over his property. Again, the Hon’ble Apex Court has clearly stated that even if a procedural lapse has been committed, the same has to be considered in the facts of the case more particularly in context of the resultant prejudice. In the instant case, prejudice on non-mentioning the exact amount to be recovered is writ large on the face of it. 12. At this stage, though not contended by the petitioners, yet, it also appears that provisions of Rule 9 of the Security Interest (Enforcement) Rules also appears to have violated. Again, since it would appear that such a violation has the direct effect of defeating the Constitutional right to protection of ownership of property, therefore, this Court deems it appropriate to even delve into the said issue. Again, since it would appear that such a violation has the direct effect of defeating the Constitutional right to protection of ownership of property, therefore, this Court deems it appropriate to even delve into the said issue. Again, it would be apposite to state that this issue is taken up by this Court, more particularly, since the facts as it stand, are incontrovertible. 12.1. It would appear that originally the respondent bank had issued notice of sale of immovable property as per schedule IV-A as per the proviso to Rule 8(6) of the Security Interest (Enforcement) Rules, 2002. The said public notice had been issued on 12.02.2021 whereas, the auction had been fixed on 15.03.2021. It also appears that as per Rule 8(6) read with Rule 9(1) of the Security Interest (Enforcement) Rules, 2002 notice of sale had been issued to the petitioners on 12.02.2021 giving notice of 30 days to the petitioners. It appears that upon the said auction not being successful, the second public notice had been issued on 20.03.2021 proposing to auction the property on 06.04.2021 and whereas vide notice of sale dated 09.04.2021, 15 days’ notice was given to the petitioners informing about the proposed auction on 27.04.2021. 12.2. In the opinion of this Court, the procedure as regards issuance of notices adopted by the respondent till the above stage was absolutely in accordance with law. Thereafter, it would appear that the respondent bank proposed to sell the property by private treaty and issued a public notice on 10.06.2021 informing public at large about the proposal to sale the property by way of private treaty on 28.06.2021. The petitioners were also informed vide notice dated 10.06.2021 of the proposal to sale the property on 28.06.2021. It would be pertinent to mention at this stage, that the petitioners had been given notice only of 15 days. 13. In this connection, it would be relevant to refer to proviso to Rule 9(1) of the Security Interest (Enforcement) Rules). The said proviso reads thus:- “9. It would be pertinent to mention at this stage, that the petitioners had been given notice only of 15 days. 13. In this connection, it would be relevant to refer to proviso to Rule 9(1) of the Security Interest (Enforcement) Rules). The said proviso reads thus:- “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.” 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. 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. 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. 14. Thus, in view of the above discussion, while it would appear that the respondent bank does not appear to have violated Rule 8(5) of the Security Interest (Enforcement) Rules by having the valuation of the property done by the government approved valuer, on the other hand, it would clearly appear that the respondent bank has clearly violated the mandate of proviso to Rule 8(6) of the Security Interest (Enforcement) Rules, 2002 as well as the bank appears to have misread and violated the requirement of Rule 9(1) of the Security Interest (Enforcement) Rules, 2002. 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. 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. 15. With these observations and directions, the present petition stands disposed of as allowed. Rule is made absolute.