Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
Scanned Judgements…!
Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
Scanned Judgements…!
Affixture of Notice - The primary requirement under Rule 3(1) of the Security Interest (Enforcement) Rules, 2002, is that the demand, possession, and sale notices must be affixed visibly on the property if service through personal delivery or registered post fails or is not feasible. Several sources emphasize that affixture is mandatory when the borrower is untraceable or avoiding service ["SOUTH INDIAN BANK vs PRD Mini Nidhi Ltd - Debt Recovery Appellate Tribunal"], ["M s PNB Housing Finance Ltd vs Mr Devarajappa M - Debt Recovery Appellate Tribunal"], ["Harinandan Palihi Reddy vs A.O. Indian Oversaeas Bank & ors - Debt Recovery Appellate Tribunal"].
Publication in Newspapers - Publication in newspapers is a secondary mode of service, used when affixture or personal service is unsuccessful or impractical. The publication must be in the vernacular and English newspapers, and it is considered valid service when properly documented, including photographs of affixture and copies of published notices ["Authorised Officer State Bank of India Stressed Assets Management Branch, Branch Manager State Bank of India Stressed Assets Recovery Branch, The Assistant General Manager, State Bank of India Retail Assets and Small & Medium Enterprises, The Branch Manager, State Bank of India, Hirepeth Branch vs SHAKEEL AHMED ISMAIL @ KALGHATGI Prop. M/s. Shakeel Trade, Shantilal Choudhari, Umaram Chaoudari, Savaram M. Chaudari, Sathyanna Sugur, Ratilal Purohit - Debt Recovery Appellate Tribunal"], ["Harinandan Palihi Reddy vs A.O. Indian Oversaeas Bank & ors - Debt Recovery Appellate Tribunal"], ["S MALATHI vs INDIAN OVERSEAS BANK - Debt Recovery Appellate Tribunal"], ["Indian Overseas Bank vs B.Nirmala (Deceased) & Others - Debt Recovery Appellate Tribunal"].
Service of Demand and Sale Notices - Proper service of demand, possession, and sale notices is critical for enforcing security interests under SARFAESI. The absence of proof of affixture or publication, or non-compliance with Rule 8(6) and Rule 9(1), renders the service invalid, which can lead to the setting aside of enforcement actions ["SSri.Javed Patel vs A.O. SBI & ors - Debt Recovery Appellate Tribunal"], ["B.K.Dilli vs The Authorised Officer Sundaram Home Finance Ltd., B.Karthik - Debt Recovery Appellate Tribunal"], ["Sri Mampilly Joseph vs LIC Housing Finance ltd & anr - Debt Recovery Appellate Tribunal"], ["The Chief Manager, State Bank of India, Stressed Assets Recovery Branch vs M/s City Hospital, Rep. by its Managing Partner, Mr. G. Ganesh Babu - Debt Recovery Appellate Tribunal"].
Legal Presumption and Evidence - Courts and tribunals often look for concrete evidence such as photographs of affixture, copies of newspaper publications, and postal acknowledgment receipts. When these are produced and properly documented, the service is deemed valid. Conversely, failure to produce such evidence or non-compliance with prescribed procedures results in invalid service and potentially the nullification of subsequent enforcement steps ["SSri.Javed Patel vs A.O. SBI & ors - Debt Recovery Appellate Tribunal"], ["Harinandan Palihi Reddy vs A.O. Indian Oversaeas Bank & ors - Debt Recovery Appellate Tribunal"], ["Sri Mampilly Joseph vs LIC Housing Finance ltd & anr - Debt Recovery Appellate Tribunal"].
Critical Insights - Several cases highlight that if notices are not affixed or published as per the rules, or if the borrower’s address is incorrect or not updated, the service is invalid. The law mandates strict compliance with Rule 3(1), Rule 8(6), and Rule 9(1), including proper affixture, publication, and proof thereof, to uphold the validity of enforcement proceedings ["SOUTH INDIAN BANK vs PRD Mini Nidhi Ltd - Debt Recovery Appellate Tribunal"], ["Harinandan Palihi Reddy vs A.O. Indian Oversaeas Bank & ors - Debt Recovery Appellate Tribunal"], ["S MALATHI vs INDIAN OVERSEAS BANK - Debt Recovery Appellate Tribunal"].
Analysis and Conclusion:Service of notices under Section 13(2) of SARFAESI, including demand, possession, and sale notices, must adhere strictly to Rule 3(1) and Rules 8 and 9 of the Security Interest (Enforcement) Rules, 2002. When personal service fails, affixture on the property and publication in newspapers are mandatory and must be properly documented with photographs and publication copies. Failure to do so invalidates the service, potentially rendering enforcement actions unlawful. Courts consistently emphasize the importance of strict procedural compliance to ensure fairness and legality in proceedings ["SOUTH INDIAN BANK vs PRD Mini Nidhi Ltd - Debt Recovery Appellate Tribunal"], ["M s PNB Housing Finance Ltd vs Mr Devarajappa M - Debt Recovery Appellate Tribunal"], ["Authorised Officer State Bank of India Stressed Assets Management Branch, Branch Manager State Bank of India Stressed Assets Recovery Branch, The Assistant General Manager, State Bank of India Retail Assets and Small & Medium Enterprises, The Branch Manager, State Bank of India, Hirepeth Branch vs SHAKEEL AHMED ISMAIL @ KALGHATGI Prop. M/s. Shakeel Trade, Shantilal Choudhari, Umaram Chaoudari, Savaram M. Chaudari, Sathyanna Sugur, Ratilal Purohit - Debt Recovery Appellate Tribunal"].
In the realm of banking and financial recovery in India, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) plays a pivotal role. One common challenge secured creditors face is serving the crucial demand notice under Section 13(2). But what happens when traditional postal service fails? Is affixing photographs of the notice on the property and publishing it in newspapers mandatory? This blog post dives deep into Rule 3 of the Security Interest (Enforcement) Rules, 2002, judicial precedents, and practical insights to clarify this issue.
Note: This article provides general information based on legal principles and is not a substitute for professional legal advice. Consult a qualified lawyer for your specific situation.
A frequent query arises: AFFIXTURE OF PHOTO GRAPHS AND PALER PUBLICATION MANDATORY IN 13(2) security interest rules if the demand notice is not served through post?
In essence, when the demand notice under Section 13(2) of the SARFAESI Act cannot be delivered via registered post or other prescribed modes, must secured creditors affix a copy of the notice (with photographs as evidence) on the borrower's property and publish it in two leading newspapers, one in the vernacular language? The answer, drawn from statutory rules and court rulings, is generally yes—these are mandatory alternative methods to ensure valid service. Standard Chartered Bank VS V. Noble Kumar - 2013 0 Supreme(SC) 767
Rule 3 of the Security Interest (Enforcement) Rules, 2002, outlines the standard procedures for serving the demand notice:
These methods prioritize direct and traceable delivery to the borrower. However, if the authorized officer believes service is not feasible—due to the borrower avoiding receipt or other valid reasons—alternative steps kick in. Standard Chartered Bank VS V. Noble Kumar - 2013 0 Supreme(SC) 767
When primary modes fail, Rule 3 explicitly mandates:
This is not optional; it's a statutory requirement to provide constructive notice to the borrower and the public, ensuring transparency in enforcement proceedings. Courts have reinforced that skipping these steps can invalidate subsequent actions like possession or sale. Rajendra Mohan Bhatnagar VS State Of M. P. - 1991 0 Supreme(SC) 668Celir LLP VS Bafna Motors (Mumbai) Pvt. Ltd. - 2023 0 Supreme(SC) 977
For instance, in cases where postal service was unsuccessful, tribunals have noted the production of photo affixing demand notice in the disputed property, publication of demand notice as evidence of compliance. TNMB LTD vs G KUMAR AND ANR - 2025 Supreme(Online)(DRAT) 293
Photographs serve as crucial evidence that affixture was physically executed. While not the primary statutory mandate, they bolster the creditor's case. The Telangana High Court in Concern Readymix held that photographs showing affixation of the notice on the property are relevant and support compliance, but emphasized that newspaper publication remains the core requirement. Shri V. J. Thomas VS Shri Pathrose Abraham - 2008 1 Supreme 745
Similarly, in DRAT proceedings, acknowledgment and photo of Section 13(2) Notice were highlighted as proof alongside publication. A T MAIDEEN vs A.O.,UNION BANK OF INDIA
Failure to maintain such photos may raise doubts, but courts typically focus on whether publication occurred in widely circulated papers—irregularities here are often curable. Shri V. J. Thomas VS Shri Pathrose Abraham - 2008 1 Supreme 745
High Courts and the Supreme Court have consistently upheld these alternatives:
Other cases echo this:
These rulings underscore that bypassing publication undermines the SARFAESI process, potentially allowing borrowers to challenge enforcement. Rajendra Mohan Bhatnagar VS State Of M. P. - 1991 0 Supreme(SC) 668
Beyond SARFAESI-specific rulings, analogous principles apply. For demand notices to be valid, they must emanate from an authorized officer, not counsel. A notice to be valid and effective in law ought to be issued by a secured creditor or an authorised officer.Bobby Sebstian VS Authorised Officer, ICICI BankBobby Sebastian VS Authorised Officer, ICICI Bank - 2014 Supreme(Ker) 241
In enforcement timelines, publication ensures the 60-day notice period under Section 13(2) is respected before further steps like sale notices under Rule 8. Indian Overseas Bank, Hyderabad VS RA Pure Life Science Limited - 2023 Supreme(Telangana) 278
To avoid procedural pitfalls:
Courts appreciate evidence such as copies of the newspapers and photographs of affixture for upholding actions. TNMB LTD vs G KUMAR AND ANR - 2025 Supreme(Online)(DRAT) 293
Under the SARFAESI Act, if the Section 13(2) demand notice isn't served via post or other primary modes, affixture (with photographs as evidence) and newspaper publication are mandatory alternatives per Rule 3. This ensures borrowers receive notice, protecting enforcement validity.
Non-compliance risks quashing proceedings. While photographs prove affixture, publication is paramount for public notice. Celir LLP VS Bafna Motors (Mumbai) Pvt. Ltd. - 2023 0 Supreme(SC) 977
Stay compliant to safeguard recoveries. For tailored guidance, reach out to legal experts familiar with SARFAESI enforcement.
This post is for informational purposes only and reflects general interpretations as of the latest available precedents.
#SARFAESI #DemandNotice #SecurityEnforcement
Admittedly, Demand Notice under Section 13(2) of SARFAESI Act, 2002, was issued on 14.12.2022, followed by its publication on 30.12.2022 and affixture on 29.12.2022, and Possession Notice was issued on 02.03.2023, followed by its publication on 02.03.2023 and affixture on 02.03.2023. ... Learned Counsel for Appellant Bank submitted that Appellant Bank has followed Rule 3 of the Security Interest (....
a) There was no affixture of Section 13(2) notice on the outer door or some other conspicuous part of subject property under Rule 3(1) of Security Interest(Enforcement) Rules, 2002. ... Respondent, relying on the submission made in the petition filed under Section 14 of the SARFAESI Act 2002 stated that personal notice taken for issuance of demand notice under Section 13(2) was ....
ground that appellant bank has not complied Rule 8(6) of Security Interest (Enforcement) Rules, 2002 with regard to service of notice of sale on the first respondent. ... Copies of paper publication and photo showing affixture of sale notice had also been produced. Any change of address by the borrower should be intimated to the bank by a written communication with a request to send further communications to the new address. ... The....
There is admission of the Appellant with regard to receipt of Demand Notice and Possession Notice. Demand Notice, Possession Notice and Sale Notice have been properly served by 1st Respondent, especially, publication of Sale Notice and its affixture. ... The 1st Respondent Bank has not complied with the provisions of Rule 8(5), 8(6) and 9(1) of the Security #HL_....
Rule 8(6) and Rule 9(1) of Security Interest (Enforcement) Rules, 2002 (hereinafter called as Enforcement Rules, 2002) has not been complied with while issuing Sale Notice; iv. There was no affixture of Sale Notice as mandated under Rule 8(7) of the Enforcement Rules, and v. ... Rule 3(1) and 3(4) of the Security Interest (Enforcement) Rules, 2002 reads as follows:- “3. #HL_START....
The Demand Notice issued under Section 13(2) of the SARFAESI Act, 2002 , also refers about the property as 1890 sq.ft, and no building is mentioned. The notices had not been properly served on the Appellant as well. ... Starting from the Demand Notice and Possession Notice, the description of the property was given the same description mentioning the security interest as property. ... Possession #....
He further submitted that Possession Notice dated 06.07.2018 was duly served on Appellant as required under the Security Interest (Enforcement) Rules, 2002, and acknowledgment and photo of Section 13(2) Notice. ... It is not in dispute that Section 13(2) Notice is 9 issued on 09.05.2018. ... He further submitted that reply of Appellant dated....
The demand notice, after returned unserved, was duly affixed, published in tune with Rule 3(1) of Security Interest (Enforcement) Rules and that was overlooked by the Learned Presiding Officer. Demand Notice, Possession Notice and Sale Notice had all been sent to the address given to the bank. ... Possession Notice was issued as per Appendix IV under rule 8(1) of Security Interest#HL_END....
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. ... 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. ... Perhaps the Courts were tempted to think that Section #HL_START....
Photo affixing demand notice in the disputed property, publication of demand notice, Xerox copy of returned cover containing Sale Notice, publication of Sale Notice and photo of affixture of sale notice are produced. 6. ... 2. Learned Counsel for Appellant Bank submitted that the Demand Notice to 1st Respondent had been sent....
If notice through registered post is not served then it may be served through publication in the newspaper also. However, no orders shall be set aside without issuing notice and hearing affected persons. If it is found that some Consolidation Officer or S.O.C. or D.D.C. has done similar thing, then the action must be proposed to be taken against him also."
If notice through registered post is not served then it may be served through publication in the newspaper also. If it is found that some Consolidation Officer, or SOC or DDC has done similar thing, then the action must be proposed to be taken against him also.” However, no orders shall be set aside without issuing notice and hearing affected persons.
5. Rule 2(b) of the Security Interest (Enforcement) Rules, 2002 defines “demand notice” as follows: “(b) demand notice means the notice in writing issued by a secured creditor or authorised officer, as the case may be, to any borrower pursuant to sub-section (2) of Section 13 of the Act.” Therefore, a notice to be valid and effective in law ought to be issued by a secured creditor or an authorised officer. 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,....
5. Rule 2(b) of the Security Interest (Enforcement) Rules, 2002 defines “demand notice” as follows; 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 credit....
If notice through registered post is not served then it may be served through publication in the newspaper also. 13. Supreme Court has held that fraud vitiates even most solemn proceedings vide Mahboob Sahab v. Syed Ismail and others, AIR 1995 SC 1205 (Para-9), United India Insurance Company v. Rajendra Singh, AIR 2000 SC 1165 and A.V. Papaya Sastry v. Government of A.P. and others, AIR 2007 SC 1546 (Para-39).” However, no orders shall be set aside without issuing notice and hearing affected persons. If it is found that some Consolidation Officer or S.O.C. or D.D.C. has don....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
