The requirement of a 30-day notice period under the SARFAESI Act and the Security Interest (Enforcement) Rules, 2002 is satisfied if there is a 30-day gap between the publication of the public notice of sale and the date of the sale, and it is not necessary to maintain a 30-day gap between the notice issued under Rule 8(6) and the notice issued under Rule 9(1).

COMMON ORDER:

(Per Hon’ble Sri Justice P Naveen Rao)

W.P.No.2109 of 2020 is filed by Indian Overseas Bank challenging the order of the Debts Recovery Tribunal-II Hyderabad (for short the Tribunal) in S.A.No.268 of 2018 dated 7.1.2020. Petitioners in W.P.No.2276 of 2020 are auction purchasers of secured assets. They are also aggrieved by order passed by the Debts Tribunal in S.A. No. 268 of 2018 dated 7.1.2020. W.P.No.2751 of 2020 is filed by the borrower and its Directors, challenging very same order of the Tribunal in S.A.No.268 of 2018 dated 7.1.2020.

2. As these three writ petitions arise out of order of the Debts Recovery Tribunal-II Hyderabad in S.A.No.268 of 2018 dated 7.1.2020, they are considered together and common decision is made. Petitioners in W.P.No.2751 of 2020 are respondent Nos. 1 to 3 and petitioners in W.P.No.2276 of 2020 are respondent Nos. 4 and 5 in W.P.No.2109 of 2020. For the sake of convenience, parties are referred to as arrayed in W.P. No. 2109 of 2020.

3. Petitioner bank extended loan facilities to a tune of 30.93 crores to respondent no.1 represented by respondent nos. 2 and 3. Holding that respondents 1 to 3 defaulted in repayment of loan, petitioner bank classified the loan account as Non Performing Asset and has taken recourse to the provisions of The Recovery Of Debts Due To Banks And Financial Institutions Act, 1993 and Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the Act, 2002’). On 30.10.2015 petitioner bank issued demand notice under Section 13 (2) of the Act, 2002. Said notice was also published in two daily newspapers on 1.11.2015. Holding that there was no response from respondents 1 to 3, on 27.5.2016 petitioner bank issued possession notice under Section 13 (4) of the Act, 2002 and said notice was also fixed on the property mortgaged to the petitioner bank.

The petitioner filed O.A.No.765 of2017 before the Debts Recovery Tribunal-II Hyderabad for recovery of the loan amount. The Tribunal passed orders on 19.1.2018. On 29.5.2018 bank issued notice of sale under Rule 8 of the Security Interest (Enforcement) Rules 2002 followed by Auction Notice dated 30.5.2018 and auctions were conducted on 10.7.2018. In the auctions conducted on 10.7.2018, respondents 3 and 4 were successful auction purchasers of the secured assets. The sales were confirmed on 19.07.2018.

4. Aggrieved by the auctions held on 10.7.2018, respondent Nos. 1 to 3 filed S.A. No. 268 of 2018 before the Tribunal. The Tribunal by order dated 7.1.2020 partly allowed the Application quashing the e-auction sales held on 10.7.2018 while upholding the possession notice dated 27.5.2016. The Tribunal further observed that the said order would not preclude the respondent bank therein to initiate measures afresh for sale of secured assets. The Tribunal accepted the contention of respondents 1 to 3 on the issue of not maintaining 30 days gap after notice of sale issued under Rule 8 (6) of the Rules 2002 and before notice issued to conduct e-auction under Rule 9(1) of the Rules 2002 and held that as notice of sale under Rule 8 (6) and auction notice under Rule 9 (1) were issued on the same date without maintaining 30 days gap, the process is vitiated. As all the three parties to S.A. No. 268 of 2018 are aggrieved by the decision of the Tribunal, these three writ petitions are filed. Though Section 18 of the Act envisages remedy of appeal to Debts Recovery Appellate Tribunal, contenting that there was no Presiding Officer in the Appellate Tribunal at Calcutta, these writ petitions are filed. Having regard to the issue involved and as all the parties to the Securitization Application have filed these writ petitions challenging the order of Debts Recovery Tribunal, the writ petitions are considered on merits without relegating the petitioners to avail the remedy of appeal.

5. We have heard learned senior counsel Sri E.Madan Mohan Rao for petitioner bank, learned senior counsel Sri