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2020 (12) TMI 362 - HC - Indian LawsCIRP Proceedings - Validity of notice of sale under Rule 8(6) of Security Interest (Enforcement) Rules, 2002 - validity of notice for sale of secured assets in e-aucion sale in terms of SARFAESI Act - HELD THAT:- It is not in dispute that the petitioner had offered his personal properties as security for the loan availed by the corporate debtor. From perusal of the sale notice under Rule 8(6) of the Security Interest (Enforcement) Rules, 2002 (Ext.P3), it is clear that because of default in repayment of loan of ₹ 50 crores availed by the corporate debtor, the secured creditor had recalled the entire loan by issuing demand notice under Section 13(2) of the SARFAESI Act on 26.10.2018. It is further seen that possession of assets mortgaged with the secured creditor was also taken by resorting to provisions of the SARFAESI Act. Subsequently, sale notice (Ext.P3) came to be issued. The argument advanced by the learned counsel for the petitioner that because of pendency of proceedings before the NCLT, parallel proceedings under the SARFAESI Act are not maintainable, needs to be rejected. Even otherwise Section 7 of the Insolvency and Bankruptcy Code has application against the corporate debtor. It cannot be said that there is bar for proceedings against the guarantor under the SARFAESI Act because of pendency of corporate insolvency resolution process against the corporate debtor. It is the solemn duty of the Court to apply the correct law without waiting for an objection to be raised by a party, especially when the law stands well settled. Any departure, if permissible, has to be of the case falling under a defined exception, duly discussed after noticing the relevant law. In financial matters grant of ex-parte interim orders can have a deleterious effect and it is not sufficient to say that the aggrieved has the remedy to move for vacating the interim order. Loans by financial institutions are granted from public money generated at the tax payers expense. Such loan does not become the property of the person taking the loan, but retains its character of public money given in a fiduciary capacity as entrustment by the public. Timely repayment also ensures liquidity to facilitate loan to another in need, by circulation of the money and cannot be permitted to be blocked by frivolous litigation by those who can afford the luxury of the same. Petition dismissed.
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