M/S.Millennium Greentech India Private Limited, v. The Authorised Officer/The Asst General Manager,

THE HON'BLE THE ACTING CHIEF JUSTICE RAMESH RANGANATHAN AND THE HON'BLE MS JUSTICE J.UMA DEVI Writ Petition No.27837 OF 2017 ORDER: (Per the Hon'ble the Acting Chief Justice Ramesh Ranganathan) The proceedings under challenge in this writ petition is the notice dated 09.8.2017, issued by the respondent-bank, giving 30 days notice to the petitioner under Rule 8(6) of the Security Interest (Enforcement) Rules, 2002 (for short "the Rules") for sale of the immovable property. The petitioner was informed that the bank proposed to publish the notice, for sale of the mortgaged property on "as is where is" and "what is where is" basis. By the said notice, the petitioner was called upon to pay the sum mentioned in the notice, along with upto date interest and other charges before the date of e-auction, failing which the properties would be auctioned/sold and balance dues, if any, would be recovered with interest and charges.

Sri V.S.R.Ravinutala, learned counsel for the petitioner, would question the validity of the proceedings dated 09.08.2017 on the ground that a common redemption notice, and a notice under Rule 8(6) of the Rules, cannot be issued; a redemption notice should precede the notice under Rule 8(6) of the Rules; in any event, the petitioner had filed an I.A before the Debts Recovery Tribunal for a one time settlement; and the respondent-bank should not have proceeded with the notice under Rule 8(6) of the Rules without considering the request of the petitioner for a one time settlement.

Rule 8(6) of the Rules enables the authorised officer to serve to the borrower a notice of 30 days for sale of the immovable secured assets under sub-rule (5). Rule 8(5) of the Rules stipulates that, before effecting sale of the immovable property referred to in sub-rule(1) of Rule 9 of the Rules, the authorised officer shall obtain a valuation of the

property from an approved valuer and, in consultation with the secured creditor, fix the reserve price of the property; and may sell the whole or any part of such immovable secured asset by any of the stipulated methods under that sub-rule.

Section 13(8) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short "the SARFAESI Act"), as substituted by Act 44 of 2016 with effect from 01.09.2016, stipulates that, where the amount of dues of the secured creditor together with all costs, charges and expenses incurred by him is tendered to the secured creditor at any time before the date of publication of the notice for public auction or inviting quotations or tender from public or private treaty for transfer by way of lease, assignment or sale of the secured assets, the secured assets shall not be transferred by way of lease, assignment or sale by the secured creditor.

The obligation on the borrower is to tender the dues, along with all costs, charges and expenses, to the secured creditor at any time before the date of publication of the notice for public auction. The Rules do not provide for a separate notice to be issued for redemption of the subject property. Section 13(8) of the SARFAESI Act only enables the borrower to redeem the property at any time before the date of publication of a notice for public auction. The mere fact that the impugned noticed under Rule 8(6) of the Rules also calls upon the borrower to pay the dues, does not render the Rule 8(6) notice illegal. The so-called one time settlement application, which the petitioner relies upon, is the letter addressed by the petitioner to the respondent-bank on 17.03.2017 informing them that they had filed a sworn affidavit before the Debt Recovery Tribunal in S.A.No.478 of 2017; they were enclosing a copy of the same to the bank for its

reference; and they were ready and willing to abide by the terms and conditions stipulated by them thereunder.

An affidavit was filed by the petitioner in the I.A. filed in S.A.No.478 of 2015 expressing their readiness and willingness to settle the account as stipulated therein. S.A.No.478 of 2017 was itself dismissed subsequently by order dated 15.06.2017. The impugned notice under Rule 8(6) of the Rules was issued by the respondent-bank only thereafter. An application filed in an I.A, in S.A.No.478 of 2017, which itself came to be dismissed on 15.06.2017, cannot be considered as an application seeking one time settlement. Sri V.S.R.Ravinutala, learned counsel for the petitioner, submits that the petitioner would make an application seeking one time settlement within one week from today. Suffice it to make it clear that the order, which is now passed by us, shall not preclude the respondent-bank from considering any such application in accordance with law.

The Writ Petition is disposed of accordingly. Miscellaneous Petitions pending, if any, shall also stand disposed of. There shall be no order as to costs.

_________________________________ (RAMESH RANGANATHAN, ACJ) __________________________ (J.UMA DEVI, J) 21st August, 2017 JSU

THE HON'BLE THE ACTING CHIEF JUSTICE RAMESH RANGANATHAN AND THE HON'BLE MS JUSTICE J.UMA DEVI Writ Petition No.27837 OF 2017 Date: 21.08.2017 JSU