TMI Blog2021 (9) TMI 1532X X X X Extracts X X X X X X X X Extracts X X X X ..... t has, however, been held that Under Section 13(8), it is clearly stipulated that the mortgagor, i.e., the borrower, who is otherwise called as a debtor, retains his full right to redeem the property by tendering all the dues to the secured creditor at any time before the date fixed for sale or transfer. This Court further held that if the tender is made by the borrower at the last moment before the sale or transfer, the secured asset should not be sold or transferred by the secured creditor. This Court held that there was no reason as to why the general principle laid down by this Court in the case of Narandas Karsondas [ 1976 (12) TMI 186 - SUPREME COURT] with reference to Section 60 of the Transfer of Property Act could not have application in respect of a secured interest in a secured asset created in favour of a secured creditor. It has been held that the said principles will apply on all fours in respect of a transaction as between the debtor and secured creditor under the provisions of the SARFAESI Act. This Court, in unequivocal terms, held that unless and until a clear 30 days' notice is given to the borrower, no sale or transfer can be resorted to by a secured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Sale Notice dated 9.7.2012. As such, the only property left was the property at Item 'C' belonging to the Respondent No. 3 in respect of which a third notice dated 27.9.2012 came to be issued. It is only in pursuance of the said notice dated 27.9.2012, that the property at Item 'C' was sold by a private treaty to M/s. Redbrick Realtors Private Limited. As such, the excess amount, which remained with the Respondent-Bank, has rightly been directed to be paid to Respondent No. 3 by the DRT, Chennai, which has been concurrently upheld by the DRAT, Chennai, as well as the High Court. The appeals are therefore found to be without merit, and as such, are dismissed with costs. - L. Nageswara Rao, B.R. Gavai And B.V. Nagarathna, JJ. For Appellant: Vinodh Kanna B., AOR and Ravi Raghunath, Adv. For Respondents: K.K. Mani, AOR, T. Archana, Srju Jakob, Advs., Rupali Sharma, AOR, Anitha Shenoy, Sr. Adv., Mayuri Raghuvanshi, AOR, Vyom Raghuvanshi, Purvat Wali and Aarti Kumar, Advs. JUDGMENT B.R. Gavai, J. 1. Leave granted. 2. This case is a classic example as to how an ingenious litigant, by taking recourse to a series of proceedings one afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not get the mortgaged properties released, as agreed. The borrower was, therefore, categorised as 'Non-Performing Asset (NPA)' on 1.4.2011. The Respondent-Bank on 23.5.2011 issued notice Under Section 13(2) of the SARFAESI Act for a liability of Rs. 20,24,05,000/-. It is the contention of the Appellants that the Respondent-Bank instead of proceeding against the actual borrowers, i.e., the new Management, who had taken over the control/management of the borrower, invoked its power malafidely against the subsisting guarantors. As such, vide reply dated 11.7.2011, the Appellant Nos. 1 and 6, and Respondent Nos. 3 and 4 denied the claim of the Respondent-Bank. According to the Appellants, ignoring the same, on 25.8.2011, the Respondent-Bank took symbolic possession of all the four properties. The Respondent-Bank issued a sale notice dated 21.1.2012 (First Sale Notice) in respect of all the four mortgaged properties claiming a sum of Rs. 23,39,54,702/- as outstanding. The date of sale was scheduled to be 27.2.2012. On 20.2.2012, the Appellants and Respondent Nos. 2 to 4 filed a Securitisation Application being S.A. No. 69 of 2012 before the Debts Recovery Tribunal-III, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Rs. 1 crore came to be deposited on 31.7.2012. The claim of the Appellants and Respondent Nos. 2 to 4 before the DRT, Chennai, in S.A. No. 227 of 2012 came to be resisted by the Respondent-Bank by filing a reply statement dated 2.8.2012. The DRT, Chennai, passed an interim order dated 7.8.2012, thereby restraining the Respondent-Bank from bringing the mortgaged properties for sale pursuant to the Second Sale Notice dated 9.7.2012 for a period of 30 days subject to deposit of Rs. 4,80,00,000/- by the Appellants and Respondent Nos. 2 to 4 within the said period, failing which the said interim order dated 7.8.2012 was to stand vacated. However, instead of complying with the said order, the guarantors filed an application being I.A. No. 437 of 2012 in S.A. No. 227 of 2012. By the said application, they sought a direction that the amount so directed to be deposited (i.e. Rs. 4,80,00,000/-) by the DRT, Chennai, vide order dated 7.8.2012, should be permitted to be deposited either in the purchasers account or in separate suspense account in the Indian Overseas Bank, Kilpauk Branch. This was on the pretext of an ongoing investigation by the CBI with regard to some fraudulent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2013 filed by the Appellants and Respondent Nos. 2 to 4 were permitted to be withdrawn by this Court vide order dated 17.4.2015. While granting leave to withdraw, this Court observed that since the special leave petitions are withdrawn, there will be no impediment for the Tribunal to pass final orders. It appears that in the meantime on 21.6.2013 since the Appellants and Respondent Nos. 2 to 4 were unrepresented, the S.A. No. 227 of 2012 came to be dismissed in default by the DRT, Chennai. An application being M.A. No. 112 of 2013 was preferred by the Appellants and Respondent Nos. 2 to 4 to recall the said dismissal order dated 21.6.2013. The said application was rejected on 20.9.2013. The said order came to be challenged by the Appellants and Respondent Nos. 2 to 4 before the High Court by filing C.R.P. PD. No. 4410 of 2013. However, the said C.R.P. PD. No. 4410 of 2013 came to be dismissed by the High Court vide order dated 3.12.2013 with liberty to the Appellants and Respondent Nos. 2 to 4 to approach the DRAT, Chennai. It appears that the Appellants and Respondent Nos. 2 to 4 approached the DRAT, Chennai, by filing M.A. (S.A.) No. 70 of 2014. The DRAT, Chennai, vide order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... os. 30710 and 30712 of 2019. Vide the impugned common order dated 18.11.2019, all the four writ petitions were disposed of. Hence, the present appeals by way of special leave. 5. We have heard Shri K.V. Viswanathan, learned Senior Counsel appearing on behalf of the Appellants, Ms. Anitha Shenoy, learned Senior Counsel appearing on behalf of the Respondent-Bank, Mr. K.K. Mani, learned Counsel appearing on behalf of the auction purchaser and Mr. Saju Jakob, learned Counsel appearing on behalf of Respondent No. 3. 6. Shri K.V. Viswanathan, learned Senior Counsel appearing on behalf of the Appellants, submitted that in the Second Sale Notice dated 9.7.2012, the period given for paying revised outstanding dues was only 10 days. Learned Senior Counsel submitted that the date fixed for auction was immediately on the next day, i.e., the 11th day. Learned Senior Counsel therefore submits that the said notice was in blatant breach of Rule 8(6) and Rule 9(1) of the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as 'the said Rules'). It is submitted that the said Rules statutorily mandate that there must be 30 days' time gap between the date of notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord and the pleadings. He submitted that the amount that was received, was received from the sale of all the four mortgaged properties of which two were sold through a private treaty and the remaining two were sold through an auction sale. As such, the excess amount, which was generated, was on account of the sale of all the four mortgaged properties and not only on account of the sale of the mortgaged property of the Respondent No. 3. He further submits that it was a consistent stand of the Appellants as well as the Respondent Nos. 2 to 4 that the said amount was required to be kept by the Respondent-Bank in an Escrow account so that in the event the auction sale in respect of properties at Item 'A' and Item 'D' of the Schedule of Properties in First Sale Notice dated 21.1.2012 is set aside, the amount can be refunded to the auction purchaser with interest. It is, however, submitted that the said amount has, in an illegal manner, been permitted to be withdrawn by the Respondent No. 3, along with interest accrued thereon. Shri Viswanathan, learned Senior Counsel, further submits that the present appeals need to be allowed by quashing and setting aside the sale i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Properties in First Sale Notice dated 21.1.2012, which rent is being received by the Appellants. Learned Counsel also relying on the judgment of this Court in the case of Shakeena and Anr. v. Bank of India and Ors., further submits that the role of the Respondent-Bank in the present case also needs to be noted. He submits that though the Respondent-Bank could very well have taken steps Under Section 14 of the SARFAESI Act for recovery of physical possession, for last 9 years, the Respondent-Bank has not taken any steps. 9. Shri Saju Jakob, learned Counsel appearing for Respondent No. 3-Shanthi Sivasamy, submits that all the Appellants are either Promoters/Directors or their direct relatives. He submits that Respondent No. 3 is not directly related to any of the Promoters or Directors but is related only through marriage of her daughter in one of the Appellants' family. He submits that the amount of Rs. 12 crore received by the Respondent-Bank was with regard to Third Sale Notice dated 27.9.2012, which was only with respect to the mortgaged property at Item 'C' in the Schedule of Properties in First Sale Notice dated 21.1.2012 owned exclusively by her. He submits tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a non-performing asset, the Respondent-Bank issued notices Under Section 13(2) and 13(4) of the SARFAESI Act. The guarantors filed a Securitisation Application (S.A.) No. 20 of 2007 before the DRT, Ernakulam, challenging the possession notice issued Under Section 13(4) of the SARFAESI Act. After issuance of notices Under Section 13(2) and 13(4) of the SARFAESI Act, the Respondent-Bank issued a notice on 14.8.2007 to the guarantors as well as others of its intention to sell the property Under Rule 8(6) of the said Rules by fixing a reserve price of Rs. 1,25,00,000/-. On 23.8.2007, the Respondent-Bank published its notice of sale of property in Indian Express and Mathrubhoomi, inviting tenders-cum-auction from the public. The guarantors vide notice dated 30.8.2007 were informed by the Respondent-Bank about the publication made on 23.8.2007. In pursuance of the tender notice, the Appellant-Mathew Varghese and one M/s. Kent Construction submitted their tenders on 30.8.2007 and 1.9.2007 respectively. The guarantors filed a writ petition being WP No. 27182 of 2007 before the Kerala High Court challenging the proceedings initiated under the SARFAESI Act. The said writ petition was dispo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the 2002 Rules. It was their specific case that the Respondent-Bank had acted surreptitiously in selling the property without informing them. The said writ petition was dismissed by the learned single judge of the High Court by order dated 12.6.2009. Being aggrieved thereby, an appeal was carried before the Division Bench of the High Court. The Division Bench of the High Court took the view that the sale was not conducted in a fair and proper manner inasmuch as when the sale was initially postponed by six weeks from 25.9.2007, the Respondent-Bank ought to have renotified the sale or at least extended the time for receiving further tenders. The Division bench set aside the sale by imposing a condition that the guarantors furnish a demand draft of Rs. 2,00,00,000/- from a local branch of a nationalized bank in favour of Mathew Varghese and hand over the same to him within a period of two months from the date of the order. The Division Bench further directed that if payment was not made, as directed, the sale in favour of Mathew Varghese would stand confirmed and the writ appeal would automatically stand dismissed. There were further directions to the sub-Registrar with regard t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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 bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 32. The other prescriptions contained in the proviso to Sub-rule (6) of Rule 8 relates to the details to be set out in the newspaper publication, one of which should be in vernacular language with sufficient circulation in the locality by setting out the terms of the sale. While setting out the terms of the sale, it should contain the description of the immovable property to be sold, the known encumbrances of the secured creditor, the secured debt for which the property is to be sold, the reserve price below which the sale cannot be effected, the time and place of public auction or the time after which sale by any other mode would be completed, the deposit of earnest money t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the maximum benefit, and that the secured creditor or anyone on its behalf, is not allowed to exploit the situation of the borrower. This Court held that Rule 9(1) of the said Rules prescribed that no sale of an immovable property under the said Rules should take place before the expiry of 30 days from the date on which the public notice of sale was published in the newspapers or notice of sale has been served to the borrower. This Court further held that the expression or in Rule 9(1) should be read as and and as such there should be clear notice of 30 days between the notice of sale to the borrower so also the publication in the newspaper and the actual date of sale. This Court held that this would serve twin purpose. Firstly, the owner/borrower should have clear notice of 30 days before the date and time when the sale or transfer of the secured asset would be made inasmuch as, that 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. Secondly, when such a secured asset of an immovable property is brought for sale, the intending purchasers should know the nature of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period mentioned in the mortgage deed. It was also stated that the equity of redemption is not extinguished by mere contract for sale and the most important and vital principle stated was that the mortgagor's right to redeem will survive until there has been completion of sale by the mortgagee by a registered deed. The completion of sale, it is stated, can be held to be so unless and until notice in writing requiring payment of the principal money has been served on the mortgagor. Therefore, it was held that until the sale is complete by registration of sale, the mortgagor does not lose the right of redemption. It was also made clear that it was erroneous to suggest that the mortgagee would be acting as the agent of the mortgagor in selling the property. 39. When we apply the above principles stated with reference to Section 60 of the TP Act in respect of a secured interest in a secured asset in favour of the secured creditor under the provisions of the SARFAESI Act and the relevant Rules applicable, Under Section 13(1), a free hand is given to a secured creditor to resort to a sale without the intervention of the court or tribunal. However, Under Section 13(8), it is cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty Act could not have application in respect of a secured interest in a secured asset created in favour of a secured creditor. It has been held that the said principles will apply on all fours in respect of a transaction as between the debtor and secured creditor under the provisions of the SARFAESI Act. 19. The most relevant observation of this Court could be found in paragraph 53 of the judgment in the case of Mathew Varghese (supra), which reads thus: 53. We, therefore, hold that unless and until a clear 30 days' notice is given to the borrower, no sale or transfer can be resorted to by a secured creditor. In the event of any such sale properly notified after giving 30 days' clear notice to the borrower did not take place as scheduled for reasons which cannot be solely attributable to the borrower, the secured creditor cannot effect the sale or transfer of the secured asset on any subsequent date by relying upon the notification issued earlier. In other words, once the sale does not take place pursuant to a notice issued Under Rules 8 and 9, read along with Section 13(8) for which the entire blame cannot be thrown on the borrower, it is imperative that for effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39; in the Schedule of Properties in First Sale Notice dated 21.1.2012 have been sold through a private treaty, and as such, the said sales are not impugned in the present appeals. It is only the properties at Items 'A' and 'D' in the Schedule of Properties in First Sale Notice dated 21.1.2012, which have been sold consequent to Second Sale Notice dated 9.7.2012 by public auction in favour of the auction purchaser, are impugned. We will therefore have to examine the correctness of the submission that since the Second Sale Notice dated 9.7.2012 provided for a period of only 10 days, the auction sale held on 20.7.2012 is vitiated in view of the law laid down by this Court in the case of Mathew Varghese (supra). For that, it will be necessary to refer to various orders passed by the Tribunals as well as the High Court. 24. It is not in dispute that the First Sale Notice dated 21.1.2012 notifying auction sale on 27.2.2012 was for recovery of Rs. 23,39,54,702/- and in respect of all the four scheduled properties at Items 'A', 'B', 'C' and 'D'. It is also not in dispute that the First Sale Notice dated 21.1.2012 provided for a clear per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent-Bank. 28. When the said S.A. No. 69 of 2012 came up for final hearing before the DRT, Chennai, on 2.7.2012, the DRT, Chennai, made the following observation: As I said earlier, the impugned Sale Notice was published in two dailies namely, New Sunday Express and Dinamani on 22.1.2012. The applicants have no case that these dailies have no wide circulation in the locality. It is also evident that Sale Notice was properly served to the borrower. It is evident that there is clear notice of 30 days from the date on which public notice of sale is published in newspapers. Therefore, there is no violation of Sub-rule (1) of Rule 9 as contended. Hence I could not find any merit in the contention raised by the Ld. Counsel for the applicants. 29. With these observations, S.A. No. 69 of 2012 came to be dismissed by the DRT, Chennai, vide order dated 2.7.2012. 30. After the said S.A. No. 69 of 2012 was dismissed, the Respondent-Bank issued a fresh notice on 9.7.2012 (Second Sale Notice), thereby informing the guarantors that an amount of Rs. 11,99,53,926/- was due to the Respondent-Bank. It was therefore informed that sale of the mortgaged properties at Items 'A', ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the properties described in the Schedule for sale consequent upon the impugned Sale Notice dated 9.7.2012. This was made subject to deposit of Rs. 4,80,00,000/- with the Respondent-Bank within the said period. It was, however, clarified that failing the same, the interim order would stand vacated. The matter was kept for compliance on 10.9.2012. 35. However, instead of complying with the said order, the guarantors filed an application being I.A. No. 437 of 2012 in S.A. No. 227 of 2012. By the said application, they sought a direction that the amount so directed to be deposited (i.e. Rs. 4,80,00,000/-) by the DRT, Chennai, vide order dated 7.8.2012, should be permitted to be deposited either in the purchasers account or in separate suspense account in the Indian Overseas Bank, Kilpauk Branch. This was on the pretext of an ongoing investigation by the CBI with regard to some fraudulent activities of the Officers of the Respondent-Bank. The said I.A. No. 437 of 2012 came to be dismissed by the DRT, Chennai, on 12.9.2012. Vide the said order dated 12.9.2012, the Respondent-Bank was granted liberty to proceed with the sale and the main S.A. No. 227 of 2012 was directed to be posted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheduled to be held on Friday 16 November 2012. 39. When the Civil Revision Petitions were listed on 8.1.2013, the Division Bench of the Madras High Court passed the following order: 2. The learned Senior Counsel for the Petitioners submitted that, the Petitioners have now identified a purchaser by name Redbrick Realtors Private Limited and they have agreed to purchase the property at Old No. 99, New No. 51, Anna Salai, Nagalkeni, Pammal Village, Chromepet, Chennai-44 (Item No. 4) for a total consideration of Rs. 12 crores. The prospective purchaser has taken a demand draft for a sum of Rs. 75 lakh in the name of Respondent Bank. Even though the prospective purchaser has agreed to settle the remaining amount within a period of sixty days, during the course of submission, the representative of the prospective purchaser sought 90 days time to pay the remaining amount. The prospective purchaser agreed to file an affidavit indicating that a sum of Rs. 6 crore will be paid on or before 28.3.2013 and the balance amount will be paid on or before 26.4.2013. ... ...... 5. The Director, Redbrick Realtors Private Limited, is directed to file an affidavit indicating that a sum of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal No. III, Chennai. 2. Consequently, the Petitioner is directed to deposit the amount collected by way of rent before the Debt Recovery Tribunal No. III, Chennai. 43. It will be further relevant to note that it was sought to be urged on behalf of the Respondent-Bank that balance amount of Rs. 4.48 crore was lying with the Respondent-Bank. However, the EPF and ESI authorities were pressuring to make payment to them. The Division Bench of the High Court vide order dated 30.4.2013 therefore directed that status quo be maintained with regard to the said amount. 44. The said Civil Revision Petitions were finally heard and dismissed by the Division Bench of the High Court on 29.7.2013. While dismissing the said Civil Revision Petitions, the Division Bench of the High Court observed thus: 10. Under such circumstances, after the confirmation of sale and after the issue of sale certificate, when that issue is not before this Court, certainly, we cannot entertain the request of the learned Senior Counsel appearing for the Petitioners to set aside the sale. Further, as pointed out earlier, with regard to the orders which are under challenge in these Civil Revision Petitions, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be withdrawn by this Court vide order dated 17.4.2015, which reads thus: The special leave petitions are permitted to be withdrawn. Since, the special leave petitions are withdrawn, there is no impediment for the Tribunal to pass final orders. 49. It appears that in the meantime on 21.6.2013 since the Appellants and Respondent Nos. 2 to 4 were unrepresented, the S.A. No. 227 of 2012 came to be dismissed in default by the DRT, Chennai. An application being M.A. No. 112 of 2013 was preferred by the Appellants and Respondent Nos. 2 to 4 to recall the said dismissal order dated 21.6.2013. The said application was rejected by the DRT, Chennai, vide order dated 20.9.2013. The said order came to be challenged by the Appellants and Respondent Nos. 2 to 4 before the High Court by filing C.R.P. No. 4410 of 2013. However, the said C.R.P. No. 4410 of 2013 came to be disposed of by the High Court with liberty to the Appellants and Respondent Nos. 2 to 4 to approach the DRAT, Chennai. It further appears that the Appellants and the Respondent Nos. 2 to 4 approached the DRAT, Chennai, by filing M.A. (S.A.) No. 70 of 2014. The DRAT, Chennai, vide order dated 10.7.2014 allowed the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' Schedule properties of the subject impugned sale notice with costs of Rs. ? 50,000/- payable by the 1st Respondent bank to the Appellant for willfully violating the provisions of law and continuing their allegation on the same ground for several years without conceding to their defect and correcting themselves at the first opportune time, This fact is evident, when the same Respondent bank, in the same matter, had got issued yet another sale notice trying to bring the Item 'B' Schedule mentioned property of the subject impugned sale notice by a sale notice dated 27.9.2012 scheduling the sale to 30.10.2012, which concludes that the first Respondent bank is very much aware of the compliance of provisions of law, but had willfully, exhibited their disrespect for the same, owing to which imposition of costs is necessitated as a deterrent and not to repeat the same. 11.1 Further, in view of the foregoing, the First Respondent bank is directed to refund the amounts as received from the 2nd Respondent/auction purchaser together with interest @ 10% p.a. (simple) from the respective dates of receipt till the date of payment in full. 11.2 The further facts of the case is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed the DRAT, Chennai, by filing R.A. (S.A.) No. 141 of 2018 and R.A. (S.A.) No. 143 of 2018 respectively. Vide common order dated 6.9.2019, the DRAT, Chennai, allowed the said appeals. The DRAT, Chennai, reversed the order of the DRT, Chennai, dated 25.6.2018 insofar as setting aside the sale and imposition of costs is concerned. However, insofar as direction to pay amount of Rs. 4.48 crore with interest at the rate of 10% per annum to Respondent No. 3 is concerned, the same was maintained. 55. Being aggrieved thereby, four writ petitions were filed before the Madras High Court; two writ petitions being Writ Petition Nos. 28034 and 28036 of 2019 were filed by the Appellants and two writ petitions being Writ Petition Nos. 30710 and 30712 of 2019 were filed by the auction purchaser. The writ petitions filed by the auction purchaser was with limited grievance that though he had purchased the properties, he was deprived of the rent realised therefrom since 2012 onwards, and therefore, either the borrowers or the Respondent-Bank should be directed to pay him the rent realized from the properties purchased by him in the year 2012 or in the alternative, to set aside the auction and re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y at Item 'B' in the Schedule of Properties in the First Sale Notice dated 21.1.2012 through a private treaty for an amount of Rs. 12.25 crore, and the said amount was deposited with the Respondent-Bank. However, it is not in dispute that the entire claim of the Respondent-Bank was not satisfied till 2.7.2012 on which date the DRT, Chennai, dismissed S.A. No. 69 of 2012. 59. After dismissal of S.A. No. 69 of 2012 on 2.7.2012 by the DRT, Chennai, a fresh notice dated 9.7.2012 (Second Sale Notice) came to be issued by the Respondent-Bank to the Appellants. In the said notice, the Schedule of Properties was the same as that in the First Sale Notice dated 21.1.2012, except the property at Item 'B', which was sold through a private treaty. Therefore, in the Second Sale Notice dated 9.7.2012, the property at Item 'C' became Item 'B' and the property at Item 'D' became Item 'C'. The amount claimed in the Second Sale Notice dated 9.7.2012 was Rs. 11,99,53,926/-, i.e., the amount claimed in the First Sale Notice dated 21.1.2012 minus the amount realized from the sale of property at Item 'B' through a private treaty. 60. It could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en compliance with the same, insofar as the first notice is concerned, whereas in the case of Mathew Varghese (supra), there was no 30 days' period between individual notice and the date of sale. 62. The matter does not rest at that. Immediately after the Second Sale Notice dated 9.7.2012 is issued, the Appellants along with Respondent Nos. 2 to 4 filed S.A. No. 227 of 2012 challenging the notice dated 9.7.2012. There is some dispute between the parties with regard to the date on which the said S.A. No. 227 of 2012 was filed. However, in the light of the view that we are taking, the same would not be relevant. 63. When the matter (S.A. No. 227 of 2012) came up for hearing before the DRT, Chennai, on 24.7.2012, a representation was made by the Appellants to the DRT, Chennai, that they wanted some breathing time to procure prospective purchaser to clear the entire dues within one month from the said date by selling the remaining property. The said S.A. No. 227 of 2012 thereafter came up for hearing before the DRT, Chennai, on 7.8.2012. On the said date, the DRT, Chennai, passed an order of interim injunction for a period of 30 days restraining the Respondent-Bank from givin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous orders came to be passed in the Civil Revision Petitions, which we have already referred to hereinabove. In one of the orders passed by the High Court, i.e., the order dated 30.4.2013, the Appellants were also directed to deposit the amount collected by way of rent before the DRT, Chennai. Finally, finding that after the confirmation of sale and after the issuance of the sale certificate, the Court could not interfere, the said Civil Revision Petitions came to be dismissed on 29.7.2013. 67. Being aggrieved thereby, the Appellants approached this Court by way of Special Leave Petition (Civil) Nos. 28402 and 28403 of 2013, wherein this Court issued notice vide order dated 7.7.2014. The said Special Leave Petitions subsequently were permitted to be withdrawn by this Court vide order dated 17.4.2015. However, in view of the observations made by this Court in its order dated 7.7.2014, the M.A. No. 70 of 2014, which was filed before the DRAT, Chennai, challenging the order of the DRT, Chennai dated 20.9.2013 refusing to restore the S.A. No. 227 of 2012, which was dismissed in default, was heard on 10.7.2014 and the S.A. No. 227 of 2012 was restored to the file. As already pointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dy discussed hereinabove, the facts in the case of Mathew Varghese (supra) and the facts in the present case are totally different. In any case, in view of the observations made in paragraph 53 of the judgment of this Court in the case of Mathew Varghese (supra), we are of the view that since the sale scheduled on 27.2.2012 in pursuance to the notice dated 21.1.2012 could not be held on account of the reasons solely attributable to the Appellants/guarantors, there was no necessity to provide 30 days' period in the Second Sale Notice dated 9.7.2012, which was in continuation of the First Sale Notice dated 21.1.2012. 71. Insofar as the reliance placed on the judgment of this Court in the case of J. Rajiv Subramaniyan (supra) is concerned, the said judgment relies on the judgment of this Court in the case of Mathew Varghese (supra). However, on facts, the issue in the said case was different. In the said case, the property was sold by the Respondent-Bank through a private treaty. This Court found that there were no terms settled in writing between the borrowers and the Bank that the sale can be effected by a private treaty, and as such, it was in violation of the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be challenged before this Court by way of Special Leave Petitions. This Court, vide order dated 7.7.2014, had issued limited notice in the said Special Leave Petitions. However, vide order dated 17.4.2015, the said Special Leave Petitions came to be dismissed as withdrawn. It is in the third round of litigation, that the DRT, Chennai, allowed the S.A. No. 227 of 2012, vide order dated 25.6.2018. Applying the law, as laid in the case of Narandas Karsondas (supra) and in the case of Mathew Varghese (supra), the order passed by the DRT, Chennai, dated 25.6.2018, was not sustainable insofar as setting aside the sale notice dated 9.7.2012 and the consequent sale. The DRAT, Chennai, has rightly reversed the same, which has been upheld by the High Court vide the impugned judgment. 75. It is further relevant to note that, this Court in the case of Dwarika Prasad (supra) and in the case of Shakeena (supra) held that the right to redemption stands extinguished on the sale certificate getting registered. 76. We will have to take into consideration the purpose with which the SARFAESI Act came to be enacted. Unlike international banks, the banks and financial institutions in India di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice dated 21.1.2012 came to be sold in pursuance of the sale taken place on 20.7.2012, which was in pursuance of the Second Sale Notice dated 9.7.2012. As such, the only property left was the property at Item 'C' belonging to the Respondent No. 3 in respect of which a third notice dated 27.9.2012 came to be issued. It is only in pursuance of the said notice dated 27.9.2012, that the property at Item 'C' was sold by a private treaty to M/s. Redbrick Realtors Private Limited. As such, the excess amount, which remained with the Respondent-Bank, has rightly been directed to be paid to Respondent No. 3 by the DRT, Chennai, which has been concurrently upheld by the DRAT, Chennai, as well as the High Court. 82. Even on equitable grounds, rest of the guarantors are either the Promoters/Directors or their family members, it is only the Respondent No. 3, who happens to be outside the family and is only connected on account of her daughter being married in the family of one of the Promoters/Directors. As such, on equitable grounds, we do not find any reason to interfere with the said direction. 83. The appeals are therefore found to be without merit, and as such, are d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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