1. M/s. Kandhari & Kandhari (P) Ltd. availed of loan facilities from State Bank of India, Sansad Marg, New Delhi. The borrower, however, started defaulting in the repayment. The loan was secured by mortgage of property consisting of land and building at C – 155, Mewar Industrial Area, Madari, Udaipur, Rajasthan measuring 8000 sq. yds. of M/s. Kandhari Rubber Limited. The registered office of both these companies is the same. The account was declared as NPA and proceedings were initiated by the Bank before the Debt Recovery Tribunal, Delhi for recovery of the loan. Simultaneously, securitisation proceedings for possession and sale of the secured assets under The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter to be referred to as, „the said Act?) were also commenced. A possession notice dated 31.07.2007 was issued as per Rule 8(1) of the Securitisation Interest (Enforcement) Rules, 2002 (hereinafter to be referred to as, „the said Rules?), which was published on 13.08.2007. The auction notice was published on 11.09.2007. The possession notice stated that an amount of Rs.4,55,54,868.54 was due and payable as on 19.12.2006 inclusive of interest and the description of the property was given. The auction notice stated that in pursuance to the possession taken as per the possession notice under the said Act for “recovery of the secured debts of State Bank of India” from M/s. Kandhari Rubber Limited, the offers were being invited in sealed cover on as is where is and as is what is basis. The description of the property was given and the reserved price was specified as Rs.96 lakhs. M/s. Payorite Print Media Pvt. Ltd. was the successful bidder with a bid of Rs.1,15,51,001/- and deposited 25% of the bid amount.

2. M/s. Kandhari & Kandhari Pvt. Ltd. filed an application / appeal under Section 17(1) of the said Act before the Debt Recovery Tribunal (Jaipur). In the grounds of appeal, M/s. Kandhari Rubber Limited raised the plea that a notice under Section 13(2) of the said Act had earlier been issued on 15.12.2002 showing the property in question as a mortgaged property on the basis of supplementary equitable mortgage created on 31.08.2001, but no action was taken and that no second notice ought to have been issued under the said Act, which action inter alia would be barred by limitation. It has also been pleaded that the account in question was declared NPA on 31.03.2000 while the mortgage was created thereafter on 31.08.2001. The liability shown in the earlier notice and the notice issued in 2007 was different and, thus, the same did not match the advertisement dated 11.09.2007. The auction notice dated 11.09.2007 was sought to be declared invalid and illegal. This appeal was resisted by the Bank. A preliminary objection about jurisdiction was raised. It was pointed out that the DRT at New Delhi was seized with the issue of recovery of the amount as the claim was filed in December, 2006. A relief in addition to recovery of sale of mortgaged property had also been made, the title deeds of which were with the Bank as there was an equitable mortgage. The mortgage is stated to have been created on 31.08.2001. The notice issued in 2002 was not disputed, but a second notice had been issued in 2007 in which the claim was laid for the amount due as on 19.12.2006. The possession was taken over in pursuance to possession notice and auction was held where after tenders were opened on 29.10.2007 and M/s. Payorite Print Media Pvt. Ltd. was found to be the highest bidder, who deposited 25% of the bid amount. The sale had not been confirmed for the reason that on 29.10.2007 itself, the DRT (Jaipur) had passed an interim order in the appeal filed by M/s. Kandhari Rubber Limited. It has been specifically stated that once the debt has been acknowledged and the liability is within the limitation, enforceability of equitable mortgage can take place within