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CPK, J & VS, J

W.P.No.2479 of 2022

IN THE HIGH COURT OF ANDHRA PRADESH

***

W.P. No. 2479 of 2020

Between:

Maruthi Cotton Mills Private Limited,

Represented by its Managing Director Patchala

Srinivasa Rao, having its registered office at Guntur

And another

…. Petitioners

and

Canara Bank, represented by its Authorised Officer

Chief Manager, Vizianagaram Main Branch,

Vizianagaram Andhra Pradesh

…. Respondents

Date of Judgment pronounced on : 29.03.2022

HON’BLE SRI JUSTICE C.PRAVEEN KUMAR

AND

HON’BLE SMT JUSTICE V. SUJATHA

1. Whether Reporters of Local newspapers : Yes/No

may be allowed to see the judgments?

2. Whether the copies of judgment may be marked : Yes/No

to Law Reporters/Journals:

3. Whether The Lordship wishes to see the fair copy : Yes/No

of the Judgment?

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W.P.No.2479 of 2022

* HON’BLE SRI JUSTICE C.PRAVEEN KUMAR

AND

HON’BLE SMT JUSTICE V. SUJATHA

+ W.P. No. 2479 of 2022

% 29.03.2022

# Maruthi Cotton Mills Private Limited,

Represented by its Managing Director Patchala

Srinivasa Rao, having its registered office at Guntur

And another

… PETITIONER

Vs.

$ Canara Bank, represented by its Authorised Officer

Chief Manager, Vizianagaram Main Branch,

Vizianagaram Andhra Pradesh

… RESPONDENTS

! Counsel for the Petitioner: SRI T. LAKSHMINARAYANA

Counsel for the Respondents: SRI BACHINA HANUMANTHA RAO

<Gist:

>Head Note:

? Cases referred:

1) 2014 (5) SCC 610

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W.P.No.2479 of 2022

THE HON’BLE SRI JUSTICE C. PRAVEEN KUMAR

AND

THE HON’BLE SMT. JUSTICE V. SUJATHA

WRIT PETITION NO. 2479 of 2022

ORDER: (Per Hon’ble Sri Justice C.Praveen Kumar)

1) Challenging the Sale Notice, dated 18.11.2021, published

in Hindu English Newspaper on 21.11.2021 without taking

recourse to Rule 8 of Security Interest (Enforcement) Rules,

2002, [„Rules 2002‟], the present Writ Petition is filed.

2) The facts, which lead to filing of the present petition, are

as under:

(i) The second Petitioner herein is the Managing Director of

the 1

st Petitioner Company. The Respondent Bank

sanctioned a term loan of Rs.3,00,00,000/- and also

working capital limit upto Rs.3,00,00,000/- on

07.12.2015 under two loan accounts numbers , which

are 0644766000002 and 0644261000543 . The loan was

to be repaid within 28 quarterly instalments starting

from April 2017. The immovable properties of the 1

st

Petitioner Company, namely, plant and machinery ;

agricultural land to an extent of Ac.1.10 cents situated

near JOCIL Company, abutting to Guntur to

Narsaraopet State Highway and also a residential house

standing in the name of the 2

nd Petitioner.

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W.P.No.2479 of 2022

(ii) As the Petitioners committed default in payment of loan

amount, their accounts were declared as „Non

Performing Assets‟ on 17.10.2017. Thereafter, a notice

under Section 13 (2) came to be issued on 31.10.2017

under Securitisation and Reconstruction of Financial

Assets and Enforcement of Security Interest Act, 2002,

[„SARFAESI Act‟], in which the total debt was shown as

Rs.6,10,15,997.75 paise.

(iii) The Bank published the Sale Notice on 12.09.2018 for

sale of the mortgaged properties. Since, the Sale Notice

came to be issued without following the provisions of

law; S.A. No. 362 of 2018 came to be filed before the

Debts Recovery Tribunal at Visakhapatnam on

27.09.2018. After hearing both sides, the Sale Notice

was set-aside by the Debts Recovery Tribunal, on

21.12.2021. Prior to setting aside the Sale Notice by the

Tribunal, the Respondent Bank published the impugned

Sale Notice, dated 18.11.2021, in Hindu English

Newspaper on 21.11.2021, without awaiting the result

in S.A. No. 362 of 2018. This notice is now sought to be

challenged on various grounds, namely, that in view of

the order passed by the Tribunal, the entire process has

to be commenced afresh including a notice under

Section 13(2).

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W.P.No.2479 of 2022

(iv) It is further urged that, once an order is passed by the

Tribunal, the principle of doctrine of merger steps in

and the consequential steps taken by the Respondent

Bank till 21.12.2021 have to be declared as null and

void. In other words, the argument of Sri. Ashok,

learned Counsel appearing on behalf of Sri. T. Lakshmi

Narayana, Advocate appearing for the Petitioners, would

be that entire process has to be started afresh by

following the procedure contemplated under Section

13(4) read with Rule 8 of the Rules.

3) On the other hand, Sri. Bachina Hanumantha Rao,

Counsel appearing for the Respondent Bank, opposed the same.

He would submit that the Writ Petition is not maintainable since

the successful bidders are not made parties. He further submits

that already the plant and machinery are sold and, as such, the

proper remedy for the Petitioners would have been to approach

the Debts Recovery Tribunal, once again.

4) (i) The averments in the Counter would show that,

pursuant to the default committed, a notice under Section 13(2)

was issued and after a lapse of sixty days from the date of

service of notice, the Respondent Bank took possession of the

secured asset and served Possession Notice on 24.10.2018 as

required under Section 13(4) of the SARFAESI Act, which was

acknowledged by the Petitioners. Since, there was no response

from the Petitioners with regard to payment of any amount;

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W.P.No.2479 of 2022

Possession Notice was issued on 24.10.2018 by publishing the

same in English vernacular language Newspapers on 31.10.2018

and also affixing the same at a conspicuous place as required

under Rule 8(1) and 8(2) of Rules 2002. It is further stated that,

a Notice under Rule 8 (6) of the Rules was issued on 27.08.2018,

which was also served and acknowledged by the Petitioners. The

Sale Notice dated 27.08.2018 was published in two newspapers

on 13.09.2018. Thus, complying with the provisions of law.

(ii) It is stated in the counter that, pursuant to 1

st Sale

Notice, dated 12.09.2018, the date of auction was fixed on

15.10.2018. The auction scheduled to be held on 15.10.2018 did

not materialize fully for want of bidders, because of which, the

Respondent Bank has conducted a uction on more than 14

occasions starting from 30.11.2018 and 31.01.2022. All the

auctions failed due to lack of bidders. Hence, it is urged that the

order of the Tribunal does not come in the way of the

Respondent Bank, as the proceedings before the Tribunal relate

to a different sale notice.

(iii) It is further stated that, finally on 27.12.2021, the

auction took place for two securities [plant & machinery and

vacant plot at Guntur] in favour of M/s. Srivatsa Biotech India

Private Limited and Mr. Srinivasa Aditya Akella, who were

turned as successful bidders for an amount of Rs.98,10,000/-

and Rs.75,99,000/-, respectively. Thereafter, Sale Certificate,

dated 11.01.2022, came to be issued in favour of M/s. Srivatsa

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W.P.No.2479 of 2022

Biotech India Private Limited. Having regard to the above, it is

said that, auction purchasers would be necessary parties to the

property in dispute.

(iv) It is further stated that the physical possession of the

plant and machinery was handed over to the Respondent Bank

by the Petitioners themselves as the factory was not in operation

for a long time and no workmen is present at the time of

eviction. For all the above circumstances and the averments in

the counter are supported by material documents, pleads that

there are no merits in the Writ Petition and the same is liable to

be dismissed.

5) The short point that arises for consideration is, whether

the Sale Notice, dated 18.11.2021, which was published in

Newspapers on 21.11.2021 is violative of the provisions of the

SARFAESI Act and the Rules made thereunder?

6) Before dealing with the issue involved, we intend to go

through the relevant provisions of the SARFAESI Act and the

Rules made there-under to find out the procedure that is

required to be followed before putting any property to auction by

the secured creditor.

7) Section 13 of the SARFAESI Act, deals with “Enforcement

of Security Interest”.

(i) Sub-section (1) postulates that, notwithstanding

anything contained in Section 69 or Section 69A of

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W.P.No.2479 of 2022

the Transfer of Property Act, 1882, any security

interest created in favour of any secured creditor may

be enforced, without the intervention of the court or

tribunal, by such creditor in accordance with the

provisions of this SARFAESI Act.

(ii) Section 13 (2) deals with issuance of notice to the

borrower who had made default in repayment of

secured debt or any in stalment thereof and in

respect of such debt been classified by the secured

creditor as on- performing asset. The notice shall be

issued in writing by the secured creditor, requiring

the borrower to discharge his full liability to the

secured creditor within 60 days from the notice,

failing which the secured creditor shall exercise all or

any of the rights under sub-section (4). Section 13(2)

speaks about certain exceptions.

(iii) On receipt of such notice under Sub-section (2), the

borrower if makes any representation or raises any

objection, the secured creditor shall consider such

representation or objection. If the secured creditor is

not in acceptance of the explanation given, he shall

communicate within 15 days of receipt of such

representation or objection the reasons for

non-acceptance of the objection or representation.

This procedure referred to above is contemplated

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W.P.No.2479 of 2022

under Section 13 (3A). It is also to be noted here

that, notice under Section 13(2) shall give details of

the amount payable by the borrower and the secured

assets intended to be enforced by the secured

creditor in the event of non-payment of secured debts

by the borrower

(iv) In case the borrower fails to discharge his liability in

full, then sub-section (4) comes into play, wherein,

the secured creditor may take recourse to one or

more of the measures mentioned therein to recover

his secured debt including to take over possession of

the secured asset by way of lease, assignment or sale

for realising the secured debt.

(v) Section 13(8) postulate that, where the amount of

dues of 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,

the said secured asset shall not be transferred by

way of any lease, assignment or sale by the secured

creditor.

(vi) Rule 4 of the Rules lays down the procedure to be

followed after issuing notice under Sub-section (2) of

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W.P.No.2479 of 2022

Section 13 i.e., when the amount mentioned in the

demand notice is not paid within the specified time.

It states that, in such situation, the Authorised

Officer shall proceed to realise the amount by

adopting any one or more of the measures specified

in Sub-section (4) of Section 13 of the SARFAESI Act.

(vii) Rule 5 deals with the situation where after taking

possession under sub-rule (1) of Rule 4 and in any

case before sale, the Authorised Officer shall obtain

the estimated value of the movable secured assets

and thereafter in consultation with the secured

creditor, fix the reserve price of the assets to be sold

in realisation of the dues of the secured creditor.

(viii) Rule 6 prescribes the mode in which the property

which is taken possession under sub-rule 1 of Rule 4

is to be sold.

(ix) Rule 7 postulates that where movable secured assets

is sold, sale price of each lot is to be paid as per the

terms of the public notice or on the terms settled

between the parties and on payment of sale price, the

authorised officer shall issue a certificate of sale in

the prescribed form specifying the movable secured

assets sold, price paid and the name of the

purchaser. Thereafter, only the sale shall become

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W.P.No.2479 of 2022

absolute. Rule 7 (2) categorically states that the

“certificate of sale” so issued shall be prima

facie evidence of title of the purchaser.

(x) Rule 8 deals with “Sale of Immovable Secured

Assets”. What is relevant here is, sub-rule 6 of Rule 8

which states that, the authorised officer shall serve

to the borrower a notice of thirty days for sale of

immovable secured assets, under sub-rule (5). As per

the proviso, if the sale is by public auction, the

secured creditor shall cause a public notice in the

prescribed form to be published in two leading

newspapers, one in vernacular language having

sufficient circulation in the locality by setting out the

terms of the sale. Such notice is also required to be

affixed at a conspicuous part of the immovable

property as per sub-rule 7.

(xi) Sub-rule 1 of Rule 9 stipulates that, 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 on the borrower. If the sale of immovable

property under Rule 8 (5) fails and sale is required to

be conducted again, the authorized officer shall

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W.P.No.2479 of 2022

serve, affix and publish notice of sale of not less than

fifteen days to the borrower, for any subsequent sale.

8) From a reading of the above Rules, more particularly,

Rule 8 (5) and (6) and Rule (1), it follows that, thirty days of sale

is required to be given by the Authorized Officer and no sale can

take place before the expiry of thirty days, in the first place. If for

some reason, the sale does not get materialize, in the first

instance, for subsequent sale, the notice period shall not be less

than fifteen days.

9) In Mathew Varghese v. M. Amritha Kumar And

Others

1, the Hon‟ble Supreme Court had a occasion to analyze

the provisions of the SARFAESI Act and the Rules made there -

under. In paragraph Nos. 30 and 31 of the Judgment, the Court

held as under:

“30. Therefore, by virtue of the stipulations contained

under the provisions of the SARFAESI Act, in particular,

Section 13(8), any sale or transfer of a secured asset,

cannot take place without duly informing the borrower

of the time and date of such sale or transfer in order to

enable the borrower to tender the dues of the secured

creditor with all costs, charges and expenses and any

such sale or transfer effected without complying with

the said statutory requirement would be a constitutional

violation and nullify the ultimate sale.

31. Once the said legal position is ascertained, the

statutory prescription contained in Rules 8 and 9 have

also got to be examined as the said Rules prescribe as to

the procedure to be followed by a secured creditor while

1

2014 (5) SCC 610

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W.P.No.2479 of 2022

resorting to a sale after the issuance of the proceedings

under Sections 13(1) to (4) of the SARFAESI Act. Under

Rule 9(1), it is prescribed that no sale of an immovable

property under the Rules should take place before the

expiry of 30 days from the date on which the public

notice of sale is published in the newspapers as referred

to in the proviso to sub-rule (6) of Rule 8 or notice of

sale has been served to the borrower. Sub-rule (6) of

Rule 8 again states that the authorised officer should

serve to the borrower a notice of 30 days for the sale of

the immovable secured assets. Reading sub-rule (6) of

Rule 8 and sub-rule (1) of Rule 9 together, the service of

individual notice to the borrower, specifying clear 30

days' time-gap for effecting any sale of immovable

secured asset is a statutory mandate. It is also

stipulated that no sale should be affected before the

expiry of 30 days from the date on which the public

notice of sale is published in the newspapers. Therefore,

the requirement under Rule 8(6) and Rule 9(1)

contemplates a clear 30 days' individual notice to the

borrower and also a public notice by way of publication

in the newspapers. In other words, while the publication

in newspaper should provide for 30 days' clear notice,

since Rule 9(1) also states that such notice of sale is to

be in accordance with the proviso to sub-rule (6) of Rule

8, 30 days' clear notice to the borrower should also be

ensured as stipulated under Rule 8(6) as well. Therefore,

the use of the expression “or” in Rule 9(1) should be

read as “and” as that alone would be in consonance with

Section 13(8) of the SARFAESI Act.”

10) Further, the Hon‟ble Supreme court in paragraph

Nos. 33.1 and 33.2 observed that Rule 8 and Rule 9 of the

SARFAESI Act, have got a twin objective to be achieved, held as

under:

“33.1 In the first place, as already stated by us, by

virtue of the stipulation contained in Section 13(8) read

along with Rules 8(6) and 9(1), the owner/borrower

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W.P.No.2479 of 2022

should have clear notice of 30 days before the date and

time when the sale or transfer of the secured asset

would be made, as that alone would enable the

owner/borrower to take all efforts to retain his or her

ownership by tendering the dues of the secured creditor

before that date and time.

33.2. Secondly, when such a secured asset of an

immovable property is brought for sale, the intending

purchasers should know the nature of the property, the

extent of liability pertaining to the said property, any

other encumbrances pertaining to the said property, the

minimum price below which one cannot make a bid and

the total liability of the borrower to the secured creditor.

Since, the proviso to sub-rule (6) also mentions that any

other material aspect should also be made known when

effecting the publication, it would only mean that the

intending purchaser should have entire details about

the property brought for sale in order to rule out any

possibility of the bidders later on to express ignorance

about the factors connected with the asset in question.”

11) Therefore, from the judgment of the Hon‟ble Supreme

Court it is very clear that, a clear thirty days time is required to

be give for effecting the sale of any immovable secured asset and

the right of redemption would be available to the borrower till

the date of time of auction sale. In case, if the auction, at the

first stance fails, then under the proviso to Rule 9, the

authorised officer shall serve, affix and publish notice of sale of

not less than fifteen days to the borrower, for any subsequent

sale, meaning thereby that in-stead of thirty days notice as

required under 8(6) for sale of immovable secured asset under

sub-rule 5, fifteen days time is sufficient to the borrower for the

subsequent sale.

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W.P.No.2479 of 2022

12) Keeping in the procedure that is mandated in the

SARFAESI Act and the Rules made there-under, we shall now

proceed to deal with the case on hand.

13) As per the averments in the counter filed by the

Respondent Bank, it appears that there were two sale notices.

The first one on 12.09.2018 and the second one on 18.11.2021.

The first notice, dated 12.09.2018, was challenged before Debts

Recovery Tribunal [„D.R.T.‟] in S.A. No. 362 of 2018, which was

allowed on the ground that no material has been placed to show

that notices under Section 8(6) were published in a local

newspaper of vernacular language. The said order was passed

on 21.12.2021. But, as said earlier, prior to the order of the

Tribunal another e-auction sale notice, dated 18.11.2021, was

issued fixing the e-auction on 27.12.2021. This notice is

challenged in the present Writ Petition.

14) If there is only one sale notice, dated 12.09.2018, and

when the same is set-aside, for want of compliance of mandatory

requirement, the Bank could not have proceeded with the

auction. If there are two different sale notices, as pleaded now,

then the Bank could have proceeded with the auction, provided

other mandatory requirements under the Act are followed. The

counter filed is silent on this aspect. Except stating that the two

e-auction sale notices are different and that two of the properties

in Auction Sale notices are auctioned and Sale Certificate was

also issued, there is no reference to compliance of Section 13 (2),

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W.P.No.2479 of 2022

Section 13(4) of the Act and Rule 8 (6) and 9 of the Rules in the

affidavit. The counter further states that Sale Notice, dated

12.09.2018, was published in two newspapers and one of which

was in vernacular language newspaper, but could not be filed

before the D.R.T.

15) At this stage, it would be appropriate to refer to two

Auction Sale notices, dated 12.09.2018 and 18.11.2021.

Auction Sale Notice dated

12.09.2018

Auction Sale Notice dated

18.11.2021

1. Property No -1: Zeroyathi Dry

Land for an extent of Ac.0.58

cents in Survey No. 172 -4

Ac.0.26 cents in Survey

No.172-5 and Ac 0.63 cents in

Survey No. 172-6 with a total

extent of Ac. 1.47 cents (0.588

Hec.) with a single plot

situated at

Garrajucheepurupalli of

Garrajucheepurupalli

Panchayat Rajam Mandal,

Srikakulam District. Bounded:

North Zeroyathi Dry Land of

Pannada Suryanarayana

Nemmadi Chandrakala and

others, South: Zeroyathi Dry

Land of Chelikam Subhadra

Saibu and etc., East: Zeroyathi

Dry Land of Dharmana

Suseela and Road, West:

Zeroyathi Dry Land of

Dharmana Leelavathi.

1. Property No. 1: The Part and

parcel of Factory Land

admeasuring 1.47 acres

along with industrial building

situated at S. No. 172/4,

172/5 and 172/6 of

Garrajucheepurupalle

Panchayat, Rajam Mandal,

Srikakulam District, Andhra

Pradesh, standing in the

name of Maruthi Cotton Mills

Private Limited. Bounded: On

the north by: Dry Land

belongs to Ponanda

Suryanarayana, Nemmadi

Chandrakala etc., On the

south by: Dry Land belongs

to “Chelikani Subhadra, Sai

Babu etc. On the east by: Dry

land belongs to Dharmana

Suseela and Road, On the

west by: Dry Land belongs to

Dharmana Leelavathi.

2. Property No -2: An extent of 70-

2 ½ sq. yards of site and a

house therein bearing D. No. 5-

72-75/1, situated at T.S. No.

20/2,19,18/1, Guntur District,

Guntur Sub-District, Guntur

Municipal Corporation Guntur

City, Pandaripuram 1

st Line.

Bounded: North: Bachepalli

Rama Rao – 21.2 ft. South:

Joint Galli-21ft. East: Gumma

Rama Kotamma – 30ft out of

which an extent of 25-1/2 of

site and 4-1/2 joint galli, West:

Anil Kumar Compo und Wall

2. Property No. 2: Plant and

Machinery related to Cotton

Ginning situated at Garraju

Cheepurupalli Village &

Panchayat, Rajam Mandal,

Srikakulam District.

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W.P.No.2479 of 2022

30ft out of which 25-1/2 site 1-

1/2 Joint galli.

3. Property No -3: An extent of

Ac1.10 cents of site, situated

at Door No. 308/D of

Ameenabad Guntur District

Narasaraopet Registration

district, Phirangipuram Sub-

district Ameenabad Gram

Panchayat, Ameenabad

Village, Bounded: North: Land

of Bathula Ramachandraiah,

South: Guntur to

Narasaraopet Road, East:

Land of Yejendla Tirupataiah,

West: Land of Gopavaram

Brahmanandam.

3. Property No. 3: The part and

parcel of vacant site

admeasuring 1.10 cents

(5324 sq. yards – 1475 sq.

yards deducted for internal

road = 3849 sq. yards)

situated at Door No. 308/D,

Near JOCIL Company,

abutting Guntur to

Narasaraopet State Highway,

Ameenabad Village

Panchayat, Phirangipuram

Mandal, Guntur District

standing in the name of Sri

Patchala Srinivasa Rao.

Bounded: One the north by:

Land of Bathula

Ramachandraiah, On the

south by: Guntur to

Narasaraopet Road, On the

east by: Land of Yejendla

Tirupataiah, On the west by:

Land of Gopavaram

Brahmanandam.

16) A comparison of the same would show that in both the

Auction Sale Notices, three properties were put to auction. Two

of the three properties are only common. In the first notice,

dated 12.09.2018, there is a reference to a property situated in

T.S. No. 20/2,19,18/1, admeasuring 70-2 ½ square yards and a

house bearing Door No. 5-72-75/1, but same is not put to

auction vide Auction Sale Notice, dated 18.11.2021. Instead,

Plant and Machinery relating to Cotton Gunning situated at

Garrajuchipurupalle Village is put to auction. That being the

position, the Bank authorities ought to have followed the

procedure as contemplated under the Act. They could not have

put to auction properties which were not part of Section 13(2)

notice. On the other hand, the E-auction details filed along with

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W.P.No.2479 of 2022

counter (in the form of a table) would show that Sale Notice,

dated 18.11.2021, is in continuation of earlier Sale Notice,

meaning thereby that as earlier auction failed to materialize for

want of bidders, another Auction Sale Notice came to be issued.

For instance, as the auction on 20.09.2021 pursuant to Auction

Sale Notice, dated 10.08.2021, did not materialize, the

impugned Auction Sale Notice, dated 18.11.2021, was issued.

Further, the properties are put to auction and Sale Certificate

was issued in favour of auction purchasers, who are not made

parties in this Writ Petition.

17) The Act, as stated above, clearly postulates that if sale

notice does not materialize at the first instance, fifteen days time

to the borrower is sufficient to give another sale notice. Further,

once the auction notice, dated 12.09.2018, has been set-aside

for not following the procedure required, the question of holding

auction again even without giving fifteen days time as

contemplated under the proviso to Rule 9 (1) of the Rules is

improper. The argument of the learned counsel for the Petitioner

appears to be that subsequent notices nowhere indicate auction

being conducted in terms of Rule 9(1) by giving 15 days time.

When the subsequent notices do not indicate the procedure as

contemplated under proviso to Rule 9(1) being followed, then

automatically they have to fall back and start afresh from the

stage Rule 13(4). The same is disputed by the Counsel for the

Respondent Bank, stating that as the issue before the Tribunal

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was different, they could not file all the material and if an

opportunity is given, relevant material evidencing compliance of

mandatory requirements would be filed before the Tribunal.

18) Having regard to the aforesaid facts and circumstances of

the case, it appears that property No.2, which is sought to be

put to auction in the first sale notice dated 12.09.2018, was not

included in the subsequent sale notice dated 18.11.2021,

instead, some other property i.e. plant and machinery relating to

Cotton Ginning situated at Garraju Cheepurupalli village and

Panchayat, Rajam Mandal, Srikakulam District, was put to

auction. Further, as stated earlier, the subsequent sale notice

does not anywhere indicate auction being conducted in terms of

Rule 9 (1) of the Rules. Further, the fact of issuance of sale

notice dated 18.11.2021, though issued even prior to passing of

the order by the Tribunal, was not brought to the notice of the

Tribunal at the time when the Tribunal passed the order. In

such circumstances, since the respondent bank authorities have

failed to follow the procedure as contemplated under Rule 9 (1)

of the Rules and when a new property is included in the sale

notice, then automatically the respondent bank have to follow

the procedure under the Act from the stage of Section 13 (2) of

the SARFAESI Act. But, the respondent bank, without following

such procedure, straight away issued the impugned sale notice

dated 18.11.2021 by including a new property, which is illegal,

improper and contrary to the mandatory provisions of the

20

CPK, J & VS, J

W.P.No.2479 of 2022

SARFAESI Act. Hence, the sale notice dated 18.11.2021 is liable

to be set aside. When once the sale notice dated 18.11.2021 is

set aside, the auction proceedings pursuant to the said sale

notice becomes null and void.

19) Accordingly, the writ petition is allowed and the sale notice

dated 18.11.2021 is set aside. However, the respondent bank is

at liberty, if they so desire, to proceed further in accordance with

the provisions of the SARFAESI Act. There shall be no order as

to costs.

Consequently, the miscellaneous petitions pending, if any,

shall stands closed.

______________________________

JUSTICE C.PRAVEEN KUMAR

______________________

JUSTICE V. SUJATHA

Date: 29.03.2022.

SM…/Ksn

Note: L.R. copy to be marked.

B.O./Ksn-SM

21

CPK, J & VS, J

W.P.No.2479 of 2022

THE HON’BLE SRI JUSTICE C. PRAVEEN KUMAR

AND

THE HON’BLE SMT. JUSTICE V. SUJATHA

WRIT PETITION NO. 2479 of 2022

(Per Hon’ble Sri Justice C.Praveen Kumar)

Date: 29.03.2022

S.M.