TMI Blog2018 (11) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... orrower cannot deal with the secured asset at all as all further steps to realise the same are to be taken by the secured creditor under the 2002 Rules. Section 19, which is strongly relied upon by Shri Ranjit Kumar, also makes it clear that compensation is receivable under section 19 only when possession of secured assets is not in accordance with the provision of this Act and rules made thereunder. That this is the general scheme of the Act is also clear from section 17(2) which states that the Debts Recovery Tribunal, when an application is filed before it, shall consider whether any of the measures referred to in section 13(4) taken by the secured creditor are in accordance with the provisions of the Act and rules made thereunder. The scheme of section 13(4) read with rule 8(1) therefore makes it clear that the delivery of a possession notice together with affixation on the property and publication is one mode of taking “possession” under section 13(4) - This being the case, it is clear that section 13(6) kicks in as soon as this is done as the expression used in section 13(6) is “after taking possession”. Also, it is clear that rule 8(5) to 8(8) also kick in as soon as “po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marised the true legal position according to it as follows: 29. The upshot of legal position that emerges from the judgments of the Supreme Court, insofar as the question referred to for our consideration is concerned, briefly stated, is as under: ( a) The remedy of an application under Section 17(1) is available only after the measures under Section 13(4) have been taken by the Bank/FIs against the borrower. ( b) The issue of notice under Section 13(2) to the borrower and communication contemplated by Section 13(3-A) stating that his representation/objection is not acceptable or tenable, does not attract the application of principles of natural justice. In other words, no recourse to an application under Section 17(1), at that stage, is available/maintainable. ( c) The borrower/person against whom measures under Section 13(4) of the Act are likely to be taken, cannot be denied to know the reason why his application or objections have not been accepted, as a fulfilment of the requirement of reasonableness and fairness in dealing with the same. ( d) One of the reasons for providing procedure under Section 13(4) read with Rule 8 for taking posse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gent powers for recovery of their dues, safeguards have also been provided for rectifying any error or wrongful use of such powers by vesting DRT with authority, after conducting an adjudication into the matters, to declare any such action invalid and also to restore even though the possession may have been made over to the transferee. ( k) The safeguards provided under the scheme make it further clear that if the Bank/FIs proceeds to take actual possession of the assets that cannot be stalled by the interference of a Court. ( l) If DRT after examining the facts and circumstances of the case and on the basis of evidence produced by the parties, comes to the conclusion that any of the measures referred to in Section 13(4), taken by the secured creditor is not in accordance with the provisions of the Act, it may by order declare that the recourse taken to any one or more measures is invalid and restore possession to the borrower. ( m) Any transfer of secured asset after taking possession thereof by the secured creditor shall vest in the transferee all rights in, or in relation to the secured asset as if the transfer had been made by the owner of such secured asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the borrower, our answer would be obviously in the negative. 31.2. The word lease has not been defined under the Act, but it has been used in the Act in the same sense as under the Transfer of Property Act, 1882. Thereunder, Section 105 defines lease as transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. Lease is a contract between the lessor and the lessee for the possession and profits of land, etc. on one side and the recompense by rent or other consideration on the other. The estate transferred to the lessee is called the leasehold. The estate remaining in the lessor is called the reversion. 31.3. The absolute owner, who is under no personal incapacity can grant lease for any term he pleases. However, the limited owner like a tenant for life can grant lease but it would not endure beyond his death. The Supreme Court in Associated Hotels of India Ltd. v. R.N. K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter proceed to take physical (actual) possession in order to exercise its right to transfer by way of lease, assignment or sale. xxx xxx xxx 34. Thus, the scheme of the provisions of Sections 13 and 17 of the Act, read with Rules 8 and 9 of the Rules, would show that the measure taken under Section 13(4)(a) read with Rule 8 would not be complete unless actual (physical) possession of the secured assets is taken by the Bank/Financial Institutions. In our opinion, taking measure under Section 13(4) means either taking actual/physical possession under clause (a) of sub-section (4) of Section 13 or any other measure under other clauses of this Section and not taking steps to take possession or making unsuccessful attempt to take measure under Section 13(4) of the Act. Similarly, following the procedure laid down under Section 14 and/or Rules 8 and 9, where the Bank meets with resistance, would only mean taking steps to seek possession under Section 13(4)(a) and the measure under sub-section (4)(a) of Section 13 would stand concluded only when actual/physical possession is taken or the borrower loses actual/physical possession. It is at this stage alone or therea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act and, therefore, the borrower at that stage cannot file an application under Section 17(1) before DRT. In other words, a securitisation application under Section 17(1) of the Act is maintainable only when actual/physical possession is taken by the secured creditor or the borrower loses actual/physical possession of the secured assets. Once the right to approach DRT matures and securitisation application under Section 17(1) is filed by the borrower, it is open to DRT to deal with the same on merits and pass appropriate orders in accordance with law. Thus, the question referred to for our consideration stands answered in terms of this judgment. The judgment of this Court in Aum Jewels (supra), in our opinion, does not enunciate the correct law. 3. Shri Neeraj Kishan Kaul, learned Senior Advocate, appearing on behalf of the appellants, has placed before us all the relevant sections under the SARFAESI Act as well as the relevant rules under the 2002 Rules. He has referred to the Statement of Objects and Reasons of both the original Act as well as the Amendment Act made in 2004 pursuant to a judgment of this Court in Mardia Chemicals Ltd. v. Union of India , (2004) 4 SCC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8(5) to 8(8) and rule 9 can then be followed in order to effect sale of property of which symbolic possession has been taken. Shri Kaul attacked the judgment of the Full Bench, stating that the conclusion of the Full Bench that the borrower would have to wait until actual physical possession of the secured asset is taken would create great hardship in that a running business of the borrower would be taken over without the borrower being able to approach the Debts Recovery Tribunal, and would have to wait until after the sale takes place to recover possession under section 17(3), even if he is able to show that the steps taken by the secured creditor are in violation of the provisions of the Act. Thus, if symbolic possession is taken contrary to section 13(2) prior to 60 days from the date of the notice mentioned therein, all borrowers would have to wait until physical possession is taken and/or a sale notice is issued to get back their running business after the business is brought to a grinding halt. This could not possibly have been the intention of the legislature. 4. Shri C.U. Singh, learned Senior Advocate, appearing on behalf of respondent no. 2, took us through the statut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, and under section 15, management of the business has actually to be taken over as two managements cannot possibly continue at the same time. Read in this light, the scheme of the Act, therefore, is clear and it becomes equally clear that only actual physical possession is referred to in section 13(4)(a) before a section 17 application can be filed. He also referred to section 17(3) to further argue that restoration of possession of secured assets could only refer to restoration of actual physical possession thereby strengthening his interpretation of sections 13 and 17 of the Act. According to him, under section 19, compensation is also payable where possession taken is not in accordance with the provisions of the Act and 2002 Rules, again making it clear that when the Court or Tribunal directs the secured creditor to return such secured asset to the borrowers, compensation may be paid. Returning secured assets obviously would mean assets of which physical possession has been taken. When it came to reading rules 8(1) and 8(3) of the 2002 Rules, according to Shri Ranjit Kumar, rule 8(3) is the next step after symbolic possession is taken over under rule 8(1), and without taking o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and financial institutions. Further, unlike international banks, the banks and financial institutions in India do not have power to take possession of securities and sell them. Our existing legal framework relating to commercial transactions has not kept pace with the changing commercial practices and financial sector reforms. This has resulted in slow pace of recovery of defaulting loans and mounting levels of non-performing assets of banks and financial institutions. Narasimham Committee I and II and Andhyarujina Committee constituted by the Central Government for the purpose of examining banking sector reforms have considered the need for changes in the legal system in respect of these areas. These Committees, inter alia, have suggested enactment of a new legislation for securitisation and empowering banks and financial institutions to take possession of the securities and to sell them without the intervention of the court. Acting on these suggestions, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Ordinance, 2002 was promulgated on the 21st June, 2002 to regulate securitisation and reconstruction of financial assets and enforcem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in this behalf in accordance with the rules made by the Central Government; ( j) an appeal against the action of any bank or financial institution to the concerned Debts Recovery Tribunal and a second appeal to the Appellate Debts Recovery Tribunal; ( k) setting-up or causing to be set-up a Central Registry by the Central Government for the purpose of registration of transactions relating to securitisation, asset reconstruction and creation of security interest; ( l) application of the proposed legislation initially to banks and financial institutions and empowerment of the Central Government to extend the application of the proposed legislation to non-banking financial companies and other entities; ( m) non-application of the proposed legislation to security interests in agricultural lands, loans not exceeding Rupees One lakh and cases where eighty per cent of the loans are repaid by the borrower. 3. The Bill seeks to achieve the above objects. Section 13 with which we are concerned reads as follows: 13. Enforcement of security interest .-( 1) Notwithstanding anything contained in Section 69 or Section 69-A of the Transfer of Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht upon the borrower to prefer an application to the Debts Recovery Tribunal under Section 17 or the Court of District Judge under Section 17-A.] ( 4) In case the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely:- ( a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset; Subs . by Act 30 of 2004, S. 8 (w.r.e.f. 11-11-2004). Prior to substitution it read as [(b) take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset: ( b) take over the management of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale and realise the secured asset; Provided that the right to transfer by way of lease, assignment or sale shall be exercised only where the substantial part of the business of the borrower is held as security for the debt: Provided furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y way of sale, lease or otherwise (other than in the ordinary course of his business) any of his secured assets referred to in the notice, without prior written consent of the secured creditor. Section 14(1) of the Act reads as follows: 14. Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured asset .-( 1) Where the possession of any secured assets is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred by the secured creditor under the provisions of this Act, the secured creditor may, for the purpose of taking possession or control of any such secured assets, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such secured asset or other documents relating thereto may be situated or found, to take possession thereof, and the Chief Metropolitan Magistrate or, as the case may be, the District Magistrate shall, on such request being made to him- ( a) take possession of such asset and documents relating thereto; and ( b) forward such asset and documents to the secured creditor: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the borrower shall not entitle the person (including borrower) to make an application to the Debts Recovery Tribunal under sub-section (1) of section 17.] Ins . by Act 44 of 2016, S. 14( ii ) (w.e.f. 1-9-2016). [(1-A) An application under sub-section (1) shall be filed before the Debts Recovery Tribunal within the local limits of whose jurisdiction- ( a) the cause of action, wholly or in part, arises; ( b) where the secured asset is located; or ( c) the branch or any other office of a bank or financial institution is maintaining an account in which debt claimed is outstanding for the time being.] 13 Subs. for sub-sections (2) and (3) by Act 30 of 2004, S. 10 (w.r.e.f. 11-11-2004). Prior to substitution sub-sections (2) and (3) read as: ( 2) Where an appeal is preferred by a borrower, such appeal shall not be entertained by the Debts Recovery Tribunal unless the borrower has deposited with the Debts Recovery Tribunal seventy-five per cent of the amount claimed in the notice referred to in sub-section (2) of Section 13: Provided that the Debts Recovery Tribunal may, for reasons to be recorded in writing, waive or reduce the amount to be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such other aggrieved person, who has made an application under sub-section (1), as the case may be; and ( c) pass such other direction as it may consider appropriate and necessary in relation to any of the recourse taken by the secured creditor under sub-section (4) of section 13.] ( 4) If, the Debts Recovery Tribunal declares the recourse taken by a secured creditor under subsection (4) of Section 13, is in accordance with the provisions of this Act and the rules made thereunder, then, notwithstanding anything contained in any other law for the time being in force, the secured creditor shall be entitled to take recourse to one or more of the measures specified under sub-section (4) of Section 13 to recover his secured debt. Ins. by Act 44 of 2016, S. 14(iv) (w.e.f. 1-9-2016) [(4-A) Where- ( i) any person, in an application under subsection (1), claims any tenancy or leasehold rights upon the secured asset, the Debt Recovery Tribunal, after examining the facts of the case and evidence produced by the parties in relation to such claims shall, for the purposes of enforcement of security interest, have the jurisdiction to examine whether lease or tenancy,- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly as possible in Appendix IV to these rules, to the borrower and by affixing the possession notice on the outer door or at such conspicuous place of the property. ( 2) Subs. for The possession notice as referred to in sub-rule (1) shall also be published in two leading newspaper by S.O. 1837(E), dated 26-10-2007 (w.e.f. 26-10-2007) [The possession notice as referred to in subrule (1) shall also be published, as soon as possible but in any case not later than seven days from the date of taking possession, in two leading newspapers], one in vernacular language having sufficient circulation in that locality, by the authorised officer. Ins. by G.S.R. 1046(E), dt. 3-11-2016 (w.e.f. 4-11-2016) [(2-A) All notices under these rules may also be served upon the borrower through electronic mode of service, in addition to the modes prescribed under sub-rule (1) and sub-rule (2) of rule ( 3) In the event of possession of immovable property is actually taken by the authorised officer, such property shall be kept in his own custody or in the custody of any person authorised or appointed by him, who shall take as much care of the property in his custody as a owner of ordinar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( 8) Sale by any methods other than public auction or public tender, shall be on such terms as may be settled Subs. for between the parties in writing by G.S.R. 1046(E), dt. 3-11-2016 (w.e.f. 4-11-2016) [between the secured creditor and the proposed purchaser in writing]. Appendix IV to the 2002 Rules reads as follows: APPENDIX IV [ See rule 8(1)] POSSESSION NOTICE ( for immovable property ) Whereas The undersigned being the authorised officer of the .. . (name of the Institution) under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Subs. for Ordinance by S.O. 103(E), dated 2-2-2007 (w.e.f. 2-2-2007) [ Act, 2002 (54 of 2002)] and in exercise of powers conferred under Section 13(12) read with Subs. for Rule 9 by G.S.R. 1046(E), dt. 3-11-2016 (w.e.f. 4-11-2016) [ Rule 3] of the Security Interest (Enforcement) Rules, 2002 issued a demand notice dated . calling upon the borrower Shri .. . /M/s to repay the amount mentioned in the notice being Rs (in words ) within 60 days from the date of receipt of the said notice. Subs. by G.S.R. 1046(E) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of this Court in Ganga Bai v. Vijay Kumar[(1974) 2 SCC 393] where in respect of original and appellate proceedings a distinction has been drawn as follows: (SCC p. 397, para 15) There is a basic distinction between the right of suit and the right of appeal. There is an inherent right in every person to bring a suit of civil nature and unless the suit is barred by statute one may, at one's peril, bring a suit of one's choice. It is no answer to a suit, howsoever frivolous to claim, that the law confers no such right to sue. A suit for its maintainability requires no authority of law and it is enough that no statute bars the suit. But the position in regard to appeals is quite the opposite. The right of appeal inheres in no one and therefore an appeal for its maintainability must have the clear authority of law. That explains why the right of appeal is described as a creature of statute. xxx xxx xxx 62. As indicated earlier, the position of the appeal under Section 17 of the Act is like that of a suit in the court of the first instance under the Code of Civil Procedure. No doubt, in suits also it is permissible, in given facts and circumstances an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 17 of the Act is an oppressive, onerous and arbitrary condition against all the canons of reasonableness. Such a condition is invalid and it is liable to be struck down. 5. As discussed earlier in this judgment, we find that it will be open to maintain a civil suit in civil court, within the narrow scope and on the limited grounds on which they are permissible, in the matters relating to an English mortgage enforceable without intervention of the court. Close on the heels of this judgment, the 2002 Act was amended on 30.12.2004 with effect from 11.11.2004. The Statement of Objects and Reasons for the Amended Act reads as under: Statement of Objects and Reasons. - The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was enacted to regulate securitisation and reconstruction of financial assets and enforcement of security interest and for matters connected thereto. The Act enables the banks and financial institutions to realise long-term assets, manage problems of liquidity, asset liability mis-match and improve recovery by exercising powers to take possession of securities, sell them and reduce nonperformi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ember, 2004. 5. The said Ordinance amends the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and the Companies Act, 1956. Chapter II of the Ordinance which amends the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, - ( a) require the secured creditor to consider, in response to the notice issued by the secured creditor under sub-section (2) of Section 13 of the said Act, any representation made or objection raised by the borrower and cast an obligation upon the secured creditor to communicate within one week of receipt of such representation or objection the reasons for nonacceptance of the representation or objection to the borrower and take possession of the secured asset only after reasons for not accepting the objections of the borrower have been communicated to him in writing; ( b) enable the borrower to make an application before the Debts Recovery Tribunal without making any deposit (instead of filing an appeal before the Debts Recovery Tribunal after depositing seventy-five p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ured creditor is to consider such representation or objection and give reasons for nonacceptance. The proviso to section 13(3-A) makes it clear that this would not confer upon the borrower any right to prefer an application to the Debts Recovery Tribunal under section 17 as at this stage no action has yet been taken under section 13(4). 11. When we come to section 13(4)(a), what is clear is that the mode of taking possession of the secured assets of the borrower is specified by rule 8. Under section 38 of the Act, the Central Government may make rules to carry out the provisions of the Act. One such rule is rule 8. Rule 8(1) makes it clear that the authorised officer shall take or cause to be taken possession . The expression cause to be taken only means that the authorised officer need not himself take possession, but may, for example, appoint an agent to do so. What is important is that such taking of possession is effected under sub-rule (1) of rule 8 by delivering a possession notice prepared in accordance with Appendix IV of the 2002 Rules, and by affixing such notice on the outer door or other conspicuous place of the property concerned. Under sub-rule (2), such notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case is that once possession is taken under rule 8(1) and 8(2) read with section 13(4)(a), section 17 gets attracted, as this is one of the measures referred to in section 13(4) that has been taken by the secured creditor under Chapter III. 13. Rule 8(3) begins with the expression in the event of . These words make it clear that possession may be taken alternatively under sub-rule (3). The further expression used in sub-rule (3) is actually taken making it clear that physical possession is referred to by rule 8(3). Thus, whether possession is taken under either rule 8(1) and 8(2), or under rule 8(3), measures are taken by the secured creditor under section 13(4) for the purpose of attracting section 17(1). 14. The argument made by the learned counsel for the respondents that section 13(4)(a) has to be read in the light of sub-clauses (b) and (c) is therefore incorrect and must be rejected. Under sub-clause (c), a person is appointed as manager to manage the secured assets the possession of which has been taken over by the secured creditor only under rule 8(3). Further, the rule of noscitur a sociis cannot apply. Sub-clause (b) speaks of taking over management of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordance with the rules made by the Central Government. Further, an appeal against the action of any bank or financial institution is provided to the concerned Debts Recovery Tribunal. It can thus be seen that though the rights of a secured creditor may be exercised by such creditor outside the court process, yet such rights must be in conformity with the Act. If not in conformity with the Act, such action is liable to be interfered with by the Debts Recovery Tribunal in an application made by the debtor/borrower. Thus, it can be seen that the object of the original enactment also includes secured creditors acting in conformity with the provisions of the Act to realise the secured debt which, if not done, gives recourse to the borrower to get relief from the Debts Recovery Tribunal. Equally, as has been seen hereinabove, the Statement of Objects and Reasons of the Amendment Act of 2004 also make it clear that not only do reasons have to be given for not accepting objections of the borrower under section 13(3-A), but that applications may be made before the Debts Recovery Tribunal without making the onerous pre-deposit of 75% which was struck down by this Court in Mardia Chemicals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ysical possession is taken of the secured asset after possession is taken under rule 8(1) and 8(2) at a future point in time. If no such actual physical possession is taken, the right to transfer by way of assignment or sale for realising the secured asset continues. This argument must also, therefore, be rejected. 19. Shri Ashish Dholakia, learned Advocate, appearing for the intervenor, State Bank of India, argued that if we were to upset the Full Bench judgment, there would be little difference between the Recovery of Debts Act and the SARFAESI Act as banks would not be able to recover their debts by selling properties outside the court process without constant interference by the Debts Recovery Tribunal. We are of the view that this argument has no legs to stand on for the reason that banks and financial institutions can recover their debts by selling properties outside the court process under the SARFAESI Act by adhering to the statutory conditions laid down by the said Act. It is only when such statutory conditions are not adhered to that the Debts Recovery Tribunal comes in at the behest of the borrower. It is needless to add that under the Recovery of Debts Act, banks/fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OA pending before DRT under the DRT Act is not a precondition for taking recourse to the NPA Act. It is for the bank/FI to exercise its discretion as to cases in which it may apply for leave and in cases where they may not apply for leave to withdraw. We do not wish to spell out those circumstances because the said first proviso to Section 19(1) is an enabling provision, which provision may deal with myriad circumstances which we do not wish to spell out herein. Thereafter, the Court went on to discuss whether recourse to take possession of secured assets of the borrower in terms of section 13(4) of the Act would comprehend the power to take actual possession of immovable property. In the discussion on this point in paragraph 71 of the judgment, learned counsel on behalf of the borrowers made an extreme submission which was that the borrower who is in possession of immovable property cannot be physically dispossessed at the time of issuing the notice under section 13(4) of the Act so as to defeat adjudication of his claim by the Debts Recovery Tribunal under section 17 of the Act and that therefore, physical possession can only be taken after the sale is confirmed in terms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act. This cannot be wished away by an observation made by this Court in a completely different context in order to repel an extreme argument. This Court was only of the opinion that the extreme argument made, as reflected in paragraph 71 of the judgment, would have to be rejected. This judgment therefore does not deal with the problem before us: namely, whether a section 17(1) application is maintainable once possession has been taken in the manner specified under rule 8(1) of the 2002 Rules. 21. Another case strongly relied upon by learned counsel for the respondents is Noble Kumar (supra). This judgment decided that it is not necessary to first resort to the procedure under section 13(4) and, on facing resistance, then approach the Magistrate under section 14. The secured creditor need not avail of any of the remedies under section 13(4), and can approach the Magistrate straightaway after the 60-day period of the notice under section 13(2) is over, under section 14 of the Act. This Court therefore held: 35. Therefore, there is no justification for the conclusion that the Receiver appointed by the Magistrate is also required to follow Rule 8 of the Securit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerning the preservation, valuation and sale of the secured assets, and other subsequent rules from the Security Interest (Enforcement) Rules, 2002, shall apply. When this Court referred to the first method of taking possession of secured assets in paragraph 36.1.(i), this Court spoke of a case in which, once possession notice is given under rule 8(1), no resistance is met with. That is why, this Court states that steps as stipulated under rule 8(2) onwards to take possession, and thereafter, for sale of the secured assets to realise the amounts that are claimed by the secured creditor would have to be taken, meaning thereby that advertisement must necessarily be given in the newspaper as mentioned in rule 8(2), after which steps for sale may take place. This case again does not deal with the precise problem that is before the Court in this case. The observation made in paragraph 36.1.(i), which is strongly relied upon by the Full Bench of the High Court, to arrive at the conclusion that actual physical possession must first be taken before the remedy under section 17(1) can be availed of by the borrower, does not flow from this decision at all. 22. In Canara Bank v. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This submission found favour with the High Court that held that the creditor having transferred the secured assets to the auction purchaser ceased to be a secured creditor and could not apply for possession. The High Court held that the Act does not contemplate taking over of symbolic possession and therefore the creditor could not have transferred the secured assets to the auction purchaser. In any case, since ITC Ltd. was the purchaser of such property, it could only take recourse to the ordinary law for recovering physical possession. 47. We find nothing in the provisions of the Act that renders taking over of symbolic possession illegal. This is a well-known device in law. In fact, this court has, although in a different context, held in M.V.S. Manikayala Rao v. M. Narasimhaswami [AIR 1966 SC 470] that the delivery of symbolic possession amounted to an interruption of adverse possession of a party and the period of limitation for the application of Article 144 of the Limitation Act would start from such date of the delivery. 24. This judgment also speaks of the taking over of symbolic possession under the SARFAESI Act. The judgment then goes on to discuss whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so shall be substituted, namely:- 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. ; (ii) for sub-rule (7), the following sub-rule shall be substituted, namely: ( 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 stip ..... 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