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VIPIN SANGHI, REKHA PALLI
Lalit Mohan Aggarwal – Appellant
Versus
Andhra Bank – Respondent
JUDGMENT
Vipin Sanghi, J. - The present petition preferred by the auction purchaser assails the order dated 13.03.2020, passed by the Debts Recover Appellate Tribunal, Delhi (DRAT). Under the impugned order, the DRAT has - while allowing the appeal preferred by the mortgager Mr.Atul Gupta being Appeal No. 498/2018, set aside the auction sale of the mortgaged property in favour of the petitioner held on 21.07.2015.
2. The mortgager i.e Mr.Atul Gupta had preferred a securitisation application being S.A. No. 73/2015 before the Debts Recovery Tribunal (DRT) to challenge the auction sale of the mortgaged property under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).
3. The DRT vide its order dated 08.05.2018 in I.A. No. 1846/2015 rejected the mortgagor's plea that the auction was vitiated and liable to be set aside as the requisite notice required under rule 8(6) of the Security Interest (Enforcement) Rules, 2002 was never served upon him.
4. The learned DRAT vide its impugned order has reversed the said order passed by the DRT and has agreed with the contention of the mortgagor that no notice under rule 8(6) regarding
Notice under rule 8(6) of the Security Interest (Enforcement) Rules, 2002 is mandatory and failure to issue such notice would vitiate the auction.
Failure to provide statutory notice as mandated by rule 8(6) of the Security Interest (Enforcement) Rules, 2002 vitiates the auction of mortgaged property.
The validity of the sale/e-auction notice under the SARFAESI Act and the Security Interest (Enforcement) Rules, 2002.
The main legal point established in the judgment is the mandatory requirement of a 15-day notice for subsequent sales under Rule 9(1) of the SARFAESI Act and the importance of clear notice to the bor....
Secured creditors must adhere to proper notice and valuation requirements per the SARFAESI Act, as failure to do so invalidates asset sales.
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