JUDGMENT :

Madhav J. Jamdar, J.

The Petitioner is the owner of Heritage Bungalow, Mittal Grandeur, Junction of Khatau Road and Captain Prakash Rehe Marg, C.S. No. 85, Colaba Division, Street No. 25, Cuffe Parade, Mumbai-400030 (hereinafter referred to as “the said property”). The Petitioner is also a co-borrower. The Petitioner, Respondent No. 4 and Respondent No. 5 availed financial assistance of aggregate amount of Rs. 111,15,22,899/- (Rs. One Hundred Eleven Crores Fifteen Lakhs Twenty Two Thousand Eight Hundred Ninety-Nine) from Respondent No. 2 by five different loans granted on various dates. The said property was mortgaged with Respondent No. 2 as security towards said loan. The Respondent No. 2 sold the said property to Respondent No. 6 by private treaty under Rule 8(5) of the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as “the said Rules”). The said Rules are made by the Central Government in exercise of the powers conferred by sub-Section 1 and Clause (b) of sub-Section 2 of Section 38 read with sub-Sections 4, 10 and 12 of Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “the said Act”).

2. Reliefs sought in the Petition:—

3. The Petitioner by present Writ Petition has inter alia sought following relief:—

“(a) that this Hon'ble Court be pleased to hold the Rule 6(iii) of the Impugned Notification GSR 1046 (E) dated 9th November 2016 (Exhibit “A” hereto) insofar as it removes the requirement of consent of borrower for the purpose of sale of secured assets by way of private treaty is unconstitutional, illegal and void;”

4. By Rule 6(iii) of said Notification being G.S.R.1046 (E) dated 3rd November, 2016 (wrongly mentioned as 9th November 2016 in prayer clause) sub-Rule 8 of Rule 8 of said Rules is amended by substituting the words “between the parties in writing” by the words “between the secured creditor and proposed purchaser in writing”.

5. The original Rule 8(8) is as follows:—

“Rule 8(8) Sale by any methods other than public auction or public tender, shall be on such terms as may be settled between the parties in writing.” (Emphasis supplied)

The said original Rule 8(8) is interpreted by the Supreme Court in Mathew Varghese v. M. Amritha Kumar, (2014) 5 SCC 610 and General Manager Sri. Siddheshwara Co-operative Bank Ltd. v. Ikbal, (2013) 10 SCC 83 by holding that the word “parties must mean the secured creditor, borrower and auction purchaser”.

6. The amended Rule 8(8) as amended by impugned notification dated 3rd November, 2016 (hereinafter referred to as “the amended Rule”) is as follows:—

“Rule 8(8)

Sale by any methods other than public auction or public tender, shall be on such terms as may be settled between the secured creditor and the proposed purchaser in writing.”

(Emphasis supplied)

Thus, the Petitioner is challenging constitutional validity of amended Rule 8(8) as it removes the requirement of consent of borrower for the purpose of settlement of terms of sale for conducting the same by obtaining quotations or by private treaty of secured assets by secured creditor/authorized officer.

7. There are several reliefs sought in the petition. This Court by order dated 27th October 2020 (passed in LDVCIA No. 1 of 2020 in this Writ Petition) clarified that for other reliefs the remedy is before the Debt Recovery Tribunal and this Writ Petition is restricted to prayer regarding constitutional validity of Rule 8(8). All the parties before us agreed that the scope of Writ Petition is restricted only to the extent of examining the constitutional validity of Rule 8(8) as amended by Notification bearing No. GSR 1046(E) dated 3rd November 2016 and as far as other reliefs are concerned, the Petitioners are at liberty to pursue the Securitisation Application No. 116 of 2019 filed under Section 17 of the said Act pending before DRTI, Mumbai or to take appropriate proceedings in that behalf.

8. Factual background:—

Bef