Strict compliance with the mandatory provisions of the Security Interest (Enforcement) Rules, 2002 is necessary for the validity of the sale of secured assets.

D. Murugesan, J

1. This writ petition raises an important question as to whether the provisions of Rules 8 & 9 of the Security Interest (Enforcement) Rules, 2002 are complied with when the secured creditor brings the immovable secured asset for sale.

2. The facts, which give raise to the present petition, are as follows:-

The petitioner had availed CVPDL Loan of Rs.3 lakhs from the first respondent-bank for his vegetable business and executed necessary documents in the year 2002. He also mortgaged his property situated at Door Nos.219 & 219A, Mahatma Gandhi Road, Villupuram Town, Villupuram District as security for repayment of the said loan. Though the petitioner has also repaid his monthly installments regularly, but due to sudden recession in the business as well his illness there was default in payment of installments to the bank. Hence, the first respondent-bank issued notice dated 30.06.2006 under Section 13(2) of the SARFAESI Act, 2002 (for short "the Act") calling upon the petitioner to pay the said amount demanded in the notice within a period of 60 days from the date of notice. The petitioner requested the first respondent-bank to give at least three months time to regularise the loan amount. Nevertheless, the first respondent-bank proceeded to take symbolic possession of the secured assets on 22.09.2006, followed by a issue of sale notice on 11.10.2007 fixing the date of sale on 21.11.2006. The property was sold and the sale intimation was given to the petitioner on 23.11.2007.

3. On the ground that the provisions of Security Interest (Enforcement) Rules, 2002 were not followed in selling the property, the petitioner preferred S.A.No.168 of 2007 before the Debt Recovery Tribunal, Chennai. The Debt Recovery Tribual by order dated 3.12.2007, set aside the sale on the ground that there was no affixture on a conspicuous part of the immovable property, and hence for violation of Sub-rule (7) ofRule 8 of the Rules, the sale is liable to be set aside. Being aggrieved by the above order, the respondent-bank preferred an appeal before the Debt Recovery Appellate Tribunal in RA(SA) No.57 of 2008. The Appellate Tribunal by order dated 30.06.2008, found that inasmuch as the writ petitioner herein has not disputed the service of notice and compliance of Rule 9, no prejudice is caused in selling the property and consequently confirmed the sale. With that finding, the Debt Recovery Appellate Tribunal set aside of the Debt Recovery Tribunal. This order is put in issue in this writ petition.

4. We have heard Mr.V.R.Kamalanathan, learned counsel appearing for the petitioner, Mr.S.Sethuraman, learned counsel appearing for the first respondent-bank and Mr.R.Baskar, learned counsel appearing for the second respondent.

5. As far as the facts are concerned, there is no dispute that the petitioner had availed CVPDL Loan of Rs.3 lakhs from the first respondent-bank and had defaulted in repayment of the loan, for which the first respondent-bank is entitled to bring the property for sale as a measure to recover the debts in terms of the provisions of the Act. Nevertheless, the provisions of the Act being very stringent, as it relates to the property right of the individual under Article 300-A, strict compliance of the provisions of the Act and the Rules are mandatory. In this context, we may refer to the relevant Rules which mentions the steps to be followed by the secured creditor while bringing the immovable secured asset for sale.

6. Rules 8 & 9 of the Security Interest (Enforcement) Rules, 2002 read as under:-

8. Sale of immovable secured assets

(1) Where the secured asset is an immovable property, the authorised officer shall take or cause to be taken possession, by delivering a possession notice prepared as nearly as possible in Appendix-IV to these rules, to the borrower and by affixing the possession notice on the outer door or at such conspicuous place of the property.

(2) The possession notice as referred to in sub-rule (1) s