1. Whether the petitioners, who are strangers to the loan given by the first respondent Bank to the borrower, from whom the petitioners purchased one of the items of the properties over which security interest was created, is eligible to have the said property spared, placing reliance on Sec. 56 of the Transfer of property Act, is the point mooted in this Writ Petition.

2. The petitioners purchased the property covered by Ext. P1 sale deed from one Mustaffa, who had borrowed some amount from the first respondent, creating security interest over two items of properties. When the borrower turned to be a defaulter, the Bank declared the Account as 'NPA' and proceeded with further steps invoking the machinery under the SARFAESI Act, which led to issuance of Ext.P3 sale proclamation. The learned Counsel for the petitioners submits that, since the defaulter/borrower has already conveyed the first item of the properties, though after creating security interest over both the items of the properties, the rights and liberties of the petitioners, being the subsequent purchasers, so as to have the item 'marshalled' as contemplated under Section 56 of the Transfer of Property Act, cannot be watered down and that appropriate direction might be issued to confine the sale in respect of the 'second item' of the properties and only on failure to realise the due amount, to proceed against the 'first item' of property covered by Ext.P1 sale deed executed by the borrower.

3. Mr. B. Krishnan, the learned Counsel for the petitioners argued the matter at length, referring to the statutory provisions, particularly Section 13 (1) and (2) of the SARFAESI Act, read with the overriding provision under Section 35, and Sec. 56, Sec. 69 and 69A of the Transfer of Property Act, in relation to the rights and interests of the petitioners. It is worthwhile to refer to the relevant provisions, which are extracted below.

Section 13(2) of the SARFAESI Act:

"(2) Where any borrower , who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under sub- section (4).

Section 56 of the T.P. Act:

"56. Marshalling by subsequent purchaser: If the owner of two or more properties mortgages them to one person and then sells one or more of the properties to another person, the buyer is, in the absence of a contract to the contrary, entitled to have the mortgaged-debt satisfied out of the property or properties not sold to him, so far as the same will extend, but not so as to prejudice the rights of the mortgagee or persons claiming under him or of any other person who has for consideration acquired an interest in any of the properties"

4. As obvious from the above provision(Sec. 56 of the T.P. Act), it takes care of the situation whereby proper regard is given to the better rights and interest of the 'mortgagee', making it clear that the buyer is entitled to have the mortgaged debt satisfied out of the property or properties not sold to him, so far as the same will extend, but not so as to prejudice the rights of the mortgagee or persons claiming under him or any other person who has for consideration acquired an interest in any of the properties.

5. Referring to the other provisions under the SARFAESI Act, particularly as to the overriding provision of Section 35, the learned Counsel for the petitioners submits that the said provision has to be read and understood in the light of Section 13 (1) of the Act, which reads as follows:

"13. Enforcement of security interest:(1) Notwithstanding anything contained in S