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2017 (3) TMI 251 - SC - Indian LawsPublic auction sale - Mandate of secured creditor to put the borrower Separate individual notice prior to deciding on the mode of sale of the secured asset - Rule 8 (6) read with Rule 9 of the Security Interest (Enforcement) Rules, 2002 - High Court has quoted or relied upon sub-rule 6 of Rule 8 as dealing with “movable” secured assets - Held that:- There is nothing in the Rules, either express or implied, to take the view that a public notice under sub-rule 6 of Rule 8 must be issued only after the expiry of 30 days from issuance of individual notice by the authorized officer to the borrower about the intention to sell the immovable secured asset. It is permissible to simultaneously issue notice to the borrower about the intention to sell the secured assets and also to issue a public notice for sale of such secured asset by inviting tenders from the public or by holding public auction. The only restriction is to give thirty days’ time gap between such notice and the date of sale of the immovable secured asset. High Court has committed a manifest error in assuming that the notice of intention of sale to be given to the borrower and a public notice for sale cannot be simultaneously issued. The High Court was also not right in observing that after a notice regarding intention to sell the secured asset under sub-rule 6 of Rule 8 is given by the authorized officer to the borrower, only on expiry of 30 days therefrom can the secured creditor take a decision about the mode of sale referred to in sub-rule 5 of Rule 8 after giving notice to the borrower and then issue a public notice after expiry of further thirty days. By this interpretation, the High Court has virtually re-written the provisions and inevitably extended the time frame of 30 days specified in sub-rule 6 of Rule 8 (atleast in relation to the sale of secured asset by inviting tenders from the public or by holding public auction). There is no need to wait for the expiry of 30 days from issuance of notice of intention to sell the secured asset given to the borrower, for publication of a public notice for sale of such asset. Nor is there any requirement to give a separate individual notice prior to deciding on the mode of sale of the secured asset. To the above extent, the opinion of the High Court in the impugned judgment will have to be overturned. Thus the public auction sale held on 21.11.2015 has not materialized, the appellant may have to resort to a fresh public notice for sale of the secured asset of the respondent no.1, if the outstanding liability is still unpaid and the sale is to be effected either by inviting tenders from the public or by holding public auction.
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