IMPORTANT POINT
Compliance with the 30 days' notice requirement under Rule 9 of the Security Interest (Enforcement) Rules is mandatory, but can be overlooked if the failure to comply is attributable to the borrowers' actions.

JUDGMENT :

S.MANU, J.

The protracted legal battle between the parties, a bank and a group of borrowers commenced two decades ago, proceeds further with these appeals.

2. By the impugned judgment in W.P(C)No.31683 of 2011, order dated 16 November 2011 in R.A.(SA) No. 76 of 2009 of the Debts Recovery Appellate Tribunal (DRAT) was set aside and the order of the Debts Recovery Tribunal (DRT) in S.A.No.9 of 2008 was restored. The DRT had set aside sale of secured assets mainly on the ground that the requirement of minimum thirty days’ notice under Rule 9 of the Security Interest (Enforcement) Rules, 2002 was violated. In W.A.No.1802 of 2016, the secured creditor Bank is the Appellant. W.A.No.2124 of 2016 is filed by the auction purchaser. W.A.No.2079 of 2016 was filed by the borrower. We will refer to the parties as they are arrayed in the cause title in W.A.No.1802 of 2016.

3. The learned Single Judge found that the sale proceeded on the basis of the notice dated 23 December 2007 by which the sale was scheduled on 29 December 2007. The same was found illegal by the learned Single Judge as Rule 9(1) of the Security Interest (Enforcement) Rules stipulates 30 days notice. Though the learned Single Judge noted that the borrowers never fulfilled any of their commitments and made every possible endeavour to defeat sale of secured asset, the failure on the part of the Bank to ensure 30 days notice was considered as a grave violation vitiating the sale. Issue regarding computation of the dues was kept open to be agitated before the DRT and a direction was issued that even if proceeding is initiated by the borrowers against fresh sale notice no stay shall be granted if the procedure in the Enforcement Rules were complied with. O.P. (DRT)No.262/2010 was closed as W.P.(C)No.31683/2011 was allowed.

4. We heard Mr.Raju Ramachandran, learned Senior Counsel assisted by Mr.Mohan Jacob George, the learned Standing Counsel for the Bank, Mr.P.B.Krishnan, learned Senior Counsel for the borrowers and Mr.Manoj Chandran, learned counsel appearing for the auction purchaser.

5. Mr.Raju Ramachandran, the learned Senior Counsel focussed his submissions to the core issue of the requirement under Rule 9 of the Security Interest (Enforcement) Rules of having 30 days notice. The learned Senior Counsel, referring to the umpteen number of legal proceedings and other steps taken by the borrowers over a long period of time, argued that their intention was only to thwart the sale of the secured assets at any cost. He pointed out that each time the Bank proceeded for the sale by issuing notices, attempts were made by approaching this Court and the Tribunal, making promises of settlement and also of clearing dues to stall the sale. The learned Senior Counsel contended that last sale notice pursuant to which the sale ultimately happened cannot be considered as a notice in isolation and it has to be construed as one issued in the course of the process commenced much earlier. He also contended that insistence of a minimum period of 30 days in Rule 9 of the Security Interest (Enforcement) Rules is not to be mechanically applied and literally understood without reference to the facts. Purpose of providing minimum time of 30 days is to be understood and that purpose was already served with previous notices issued in the case at hand. He also pointed out that the Bank, as a financial institution which advanced funds to the borrowers long time ago had to undertake an exhausting struggle to recover the dues and the learned Single Judge allowed the writ petition without taking into account such relevant circumstances. The learned Senior Counsel relied on various judgments of the Hon'ble Supreme Court and contended that when the sale could not be held on account of reasons solely attributable to the borrowers, there is no necessity to provide 30 days time in subsequent sale notices. He placed heavy reliance on the observations and conclusions of a bench of three judges of the Hon'ble