(Prayer: This writ petition is filed under articles 226 and 227 of the Constitution of India, praying to Quash the order Dated:27.07.2017 in I.A.No.204/2015 passed by the hon'ble drat chennai vide annex-h. direct the drat, chennai to entertain the appeal air(sa)81/2015 filed by the petitioners and pass orders on Merits and etc.,

This writ petition is filed under articles 226 and 227 of the Constitution of India, praying to quash the impugned sale certificate dated:07.01.2013 and subsequently sale certificate registered vide page no.1, book 1 no.cmp-1-06460-2012-13 in cmd, in cmpd73 dtd8.1.2013 at the sub registrar officer, chamarajpet, bangalore vide annexure-c issued by the r-1 by invoking sarfaesi action for the rights accrued on 31.3.2000 is in violating of fundamental rights guaranteed under article 21 and 300a of the constitution of india and etc.,)

 This writ petition is filed praying to quash the orders Dated:24.08.2017 in ia no.1339/2017 and 27.07.2017 in air(sa) 441/2014 passed by the drat, chennai, vide annx-g and f. declare the R-1 Sarfaesi Proceedings initiated between 14.05.2010 to 07.01.2013,  for  the  account  declared  as  npa  on 30.9.1999  is  bad  in  law.direct  the  office  of  sub- registrar, Basavanagudi (Chamarajapet) bangalore, to cancel the sale certificate issued by the r-1 vide annx-c registered document no. cmp-01-06460-2012-13 stored in cd no.cmpd 73 and etc.,

Oral Order:

(Per: Hon ble Mr. Justice T.M. Nadaf)

1. The issue involved in these petitions, is whether any infraction of mandate contemplated under Rule 9 of The Security Interest (Enforcement) Rules, 2002 ( ‘Rules, 2002’, for short) , vitiates the sale of immovable property secured by the Bank. The Law on this point is no more res-integra in view of latest decision by the Supreme Court in M.R.VASUMATHI VS. AUTHORIZED OFFICER AND OTHERS (2026 SCC ONLINE SC 1103) .

2. The  Supreme Court under sub-heading  (II) Consequence of non-compliance, which reads from paragraph Nos.35 to 41, held that any infraction or non-compliance of mandate contained under Rule supra is fatal to the auction sale and accordingly, set-aside the auction sale conducted in respect of secured asset.

3. The sub-heading II. CONSEQUENCE OF NON- COMPLIANCE, from paragraph Nos.35 to 41 reads as under:

                  "II. CONSEQUENCE OF NON-COMPLIANCE

                  35. The DRT, the DRAT and the High Court appear to have proceeded on a broader premise of consideration of delay, conduct of the borrower, and the perceived equities in favour of the auction purchaser. Equally, it is true that the record bears out that no concrete steps were ultimately taken by the appellant, who is the daughter of the deceased guarantor, to liquidate the outstanding dues and that earlier attempts at settlement did not come to fruition. However, in our considered opinion, the failure to repay without being informed of an extension being granted to the auction purchaser, by itself, cannot validate proceedings that are otherwise vitiated in law.

                  36. While it is trite that the rights of an auction purchaser and the sanctity of a confirmed sale ordinarily merit due protection, such protection is by no means absolute. It must yield where the very process engendering the sale is demonstrated to be legally infirm or to be incongruous with the statutory framework. The object of proceedings under the SARFAESI Act is not the mere culmination of a sale in a mechanical manner, but the lawful realisation of the secured asset through a process that is fair, transparent and strictly compliant with the prescribed rules. In the present case, the non-adherence to the timeline that the SARFAESI Rules contemplate constitutes a material irregularity going to the root of the matter. The mere factum that the sale stood confirmed cannot, therefore, foreclose judicial scrutiny.

                  37. It is true that there is no express or formal articulation, in so many words, by the appellant evincing her readiness and willingness to tender the stipulated amount for redemption of the secured asset. However, the matter cannot be posited in such a narrow compass. The record unmistakably discloses that the appellant, along with the other legal heirs, had instituted multiple miscellaneous applications before the DRT, inter alia, seeking permission to redeem the property upon the deposit of the required amount and to set aside the consequences of the sale. Such steps, taken in the teeth of adverse proceedings, cannot be disregarded as inconsequential or merely procedural. On the contrary, they evince a clear manifestation of intent, although implicit, that the appellant was desirous of redeeming the property upon being accorded with an opportunity to do so. Viewed in this prism, the filing of the said application must be construed as sufficient indication of the appellant’s willingness to redeem.

                  38. Even otherwise, as a logical sequitur, the contention that the guarantor or his legal heirs did not evince adequate interest in repayment does not advance the case of the secured creditor, for a process vitiated by statutory non-compliance cannot otherwise be sanctified on such considerations.

                  39. The property in question belonged to G. Ramanujam, the deceased guarantor, and upon his demise, vested in his legal heirs. Such heirs cannot be divested of their lawful interest except in accordance with a procedure that is fair, just and in strict conformity with the governing statute, i.e., the SARFAESI Act and the SARFAESI Rules.

                  CONCLUSION

                  40. In view of the foregoing discussion, the appeal deserves to be allowed in part and is, accordingly, allowed to the extent mentioned hereafter. The impugned judgment and order passed by the High Court is set aside, as are the orders passed by the DRAT and the DRT.

                  41. Consequently, the auction sale conducted in respect of the secured asset stands quashed and set aside."

4. The present Writ Petitions are filed seeking following reliefs:

                  W.P.No.36694/2017:

                  a. to quash the order dated 27/7/2017 in IA No.204/2015 in AIR (SA) 81/2015 passed by the Hon'ble DRAT Chennai vide ANNEXURE-H.

                  b. to direct the DRAT, Chennai to entertain the appeal AIR (SA) 81 of 2015 filed by the petitioners and pass orders on merits.

                  c. to direct the Hon'ble DRAT to accept Rs.5,09,675.82 as the balance amount payable as per the SARFAESI Act and thereby extinguish all rights of the Respondent Bank including the sale certificate issued.

                  d. pass such order or other orders that this Hon'ble Court deems fit and proper in the circumstances of the case in the interest of justice and equity.

                  W.P.No.44284/2017:

                  a. to quash the impugned Sale Certificate vide Lr. No.1204/11/107/317 dated 7.1.2013, and subsequently sale certificate registered vide page 1, book  1,  No.CMP-1-06460-2012-13  in  CMD,  in CMPD73, dated 8-1-2013 at the Sub Registrar Office, Chamarajpet, Bangalore vide "ANNEXURE-C" issued by the 1st Respondent by invoking SARFAESI action for the rights accrued on 31.3.2000, is in violation of fundamental Rights guaranteed under Article 21 and 300A of the Constitution of India.

                  b. the SARFAESI Act is prospective from 21.6.2002 at the earliest to save anything done or any action taken thereafter only under the Ordinances and that Section 2(1)(o) of the SARFAESI Act does not create any abstract rights .in the 1st Respondent, prior to it's date of commencement of enforcement, by issuance of fresh 13(2) Demand Notice on 14.05.2010, does not create new rights.

                  c. declare that the "previous operation of a future law" being applied and harmoniously construed with Section 36 (SARFAESI Act) is barred by limitation in this case, as illegal, non est and void.

                  d. pass such order or further orders as this Hon'ble Court deems fit and proper in the circumstances of the case and thus render justice.

                  W.P.No.55010/2017

                  a. to quash the orders dated 24.8.2017 in AIR (SA)374/2016 passed by the DRAT, Chennai vide ANNEXURE-B.

                  b. by declaring that all measures taken by the 1st Respondent is without jurisdiction under SARFAESI Act and is barred by limitation.

                  c. to direct the office of Sub-Registrar, Basavanagudi (Chamarajapet) Bangalore, to cancel the sale certificate  issued  by  the  1st  Respondent  vide "Annexure-C" registered Document No.CMP-1-06460-2012-13 stored in CD No.CMPD 73.

                  d. to pass such order or other orders that this Hon'ble Court deems fit and proper in the circumstances of the case in the interest of justice and equity.

                  W.P.No.55012/2017

                  a. to quash the orders dated 24.8.2017 in IA No.1339/2017 and 27.7.2017 in AIR (SA) 441/2014 passed by the DRAT Chennai vide ANNEXURE-G and F.

                  b. to direct the 1st Respondent SARFAESI proceedings initiated between 14.5.2010 to 07.01.2013, for the account declared as NPA on 30.9.1999 is bad in law, vide Annexure-C and L.

                  c. to direct the office of Sub-Registrar, Basavanagudi (Chamarajapet) Bangalore, to cancel the sale certificate issued by the 1st Respondent vide Annexue-C registered Document No. CMP-1-06460-2012-13 stored in CD No.CMPD 73.

                  d. to pass such order or other orders that this Hon'ble Court deems fit and proper in the circumstances of the case in the interest of justice and equity.

5. Facts in brief are as under:

AS PER PETITIONERS:

                  5.1 The second petitioner is a Women Entrepreneur, dealing in the printing and publishing business in the name and style of M/s.DELTA PRINTING HOUSE. Petitioner Nos.1 & 3 and 4 are the legal heirs of A.P.Mahesh (demised on 06.04.2022) who was the Guarantor to the loan availed from Andhra Bank, Hyderabad. In order to expand her business, petitioner No.2 availed loan credit facilities i.e.,

                

                  5.2 In view of default in payment of loan due to unforeseen loss suffered by the petitioners, the Bank declared the loan as Non-Performing Assets (NPA) on 30.03.2000.

                  5.3 On 20.01.2003, the respondent Bank thereafter filed O.A.No.63/2003 before the Debt Recovery Tribunal, Hyderabad, claiming an amount of Rs.29,08,428.82/- together with current and future interest @ 17.75% per annum with quarterly rest from the date of application till the date of realization.

                  5.4 On 28.02.2003, One Time Settlement (OTS) was offered by the respondent Bank for Rs.16,41,504.04/-. Since the same was not paid, on 23.02.2004, the Bank exercising power under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ( SARFAESI Act, for short) , issued demand notice demanding a sum of Rs.29,10,675.82/- during the pendency of O.A.No.63/2003.

                  5.5 As per the petitioners, in all they paid sum of Rs.7,01,000/- from the date of issuance of notice on several dates i.e., on 10.02.2004 Rs.1,00,000/-, on 24.02.2004  Rs.2,00,000/-  and  on  28.02.2005 Rs.4,01,000/- directly from the purchaser after sale of the Machinery. The same has been acknowledged by the respondent Bank.

                  5.6 On 12.08.2005, the Bank suppressing the fact of receipt of Rs.7,01,000/-, obtained final order in O.A.No.63/2003, wherein the petitioners were placed ex-parte, followed by issuance of Recovery Certificate on 24.08.2005. Thereafter, on 06.12.2006, the Recovery Officer, DRT Hyderabad issued a Proclamation of Sale vide Form-13, Rule 52(2) of the Second Schedule of the Income Tax Act, 1961. In between 2007-2009, the petitioners filed several Writ Petitions to safeguard the property and as per the directions of this Court, they also complied the order of the Writ Petitions by remitting amount which in total comes to Rs.17,01,000/- and till date, they have paid Rs.24,01,000/-.

                  5.7 On 14.05.2010, the respondent Bank issued a Demand  notice  for  Rs.62,74,752/-  under  the SARFAESI Act and demanded the amount as per the Recovery Certificate dated 12.08.2005 issued by the DRT, Hyderabad in O.A.No.63/2003.

                  5.8 On 20.12.2010, the respondent Bank obtained the valuation of the Market Value and fixed at Rs.1,89,20,000/- and Distress Value of Rs.1,51,00,000/- in respect of 6,200 Sq.ft instead of 8,200 Sq.ft, without the valuer visiting the property.

                  5.9 On 25.06.2011, the respondent Bank again obtained the valuation of Market Value and fixed at Rs.1,89,20,000/- and Distress Value abruptly reduced to Rs.1,41,00,000/- in respect of the very same measurement of the property stated supra.

                  5.10 The petitioners further claim that on 01.07.2011, the Bank issued the Sale Notice to sell the mortgaged property under the SARFAESI Act. An appeal came to be filed in Appeal SA No.359/2011, calling in question the Sale Notice before the DRT, Bengaluru. The petitioners also filed an application in No. IR 1758/2011 seeking stay of the public auction to be conducted in respect of the mortgaged property.

                  5.11 On 28.07.2011, the DRT, Bengaluru while disposing of the application No. IR 1758/2011 for stay, permitted to conduct the sale and also directed the respondent Bank not to confirm the sale till the disposal of SA No.359/2011, which was the subject matter in W.P.No.29172-73/2011. This Court on 02.08.2011, disposed of the Writ Petition with a direction that the Bank shall not open the Bids received pursuant to the auction sale without further orders from the DRT. On 04.08.2011, the bank conducted the sale by sealed Tender and informed about the directions of this Court.

                  5.12 On 16.08.2011, the petitioners got valued the Market value of the property from recognized Valuer which was at Rs.3,61,08,000/-. On 29.09.2011, during the pendency of S.A.369/2011, the petitioners filed W.P.No.37925-26/2011 before this Court.

                  5.13 On 14.10.2011, the Writ Petition was listed before the Writ Court, the Court passed the following order:

                  "ORDER

                  Heard the learned Senior counsel appearing for the petitioners.

                  Several contentions are urged on merits. However, it is submitted that the petitioners are interested in settling the matter amicably.

                  In the light of the submission made, issue emergent notice regarding rule to the respondents returnable by 24.10.2011.

                  It is also submitted that the petitioners had the benefit of the order passed by this Court in W.P.Nos.29172-173/2011 disposed of on 02.08.2011. In fact, while disposing of the said writ petitions, this Court had made it clear by observing in paragraph 3 as under:

                  "3. ……Therefore, in order to protect the interest of both the parties, I am of the opinion that the appropriate interim order pending consideration of the I.A. by the Tribunal would be to permit the sale to go on as scheduled. In that regard, the respondent - bank would be entitled to receive the bids including the bid, if any putforth by the petitioners, however, the bids/ offers shall not be opened by the respondents pending consideration of the interlocutory application by the Tribunal ……"

                  Further it is submitted that the Tribunal has now passed an order on 11.10.2011 dismissing the application filed under Section 17(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 Act.

                  Keeping open the question of alternative remedy which the petitioners are required to avail, as the petitioners have come up with a plea that they are interested in settling the matter, relist this matter on 28.10.2011. Until then, the bids shall not be opened by the respondents."

                  5.14 According to the petitioners, they had communicated this order to the Bank. However, the Bank on the very same day, opened the bid, wherein only two persons participated i.e., respondent No.3 Dr.Vani and her husband. As per the petitioners, the husband of respondent No.3 who was another bidder showed no interest in participation. The bid was opened, wherein respondent No.3 was the only bidder available, the property was sold in favour of the bidder by the authorized officer by confirming the Sale. However, the interim order granted earlier in W.P.No.37925-26/2011 continued thereafter also, which we have already extracted above.

                  5.15 In a strange move, on 05.01.2013, demand drafts were purchased by respondents 3 and 4 even before sale confirmation from Hyderabad and on 07.01.2013, in the teeth of interim order supra, violating the same, the sale was confirmed and Sale Certificate was issued on 08.01.2013 after a lapse of 448 days.

                  5.16 On 11.01.2013, this Court in W.P.No.37925-26/2011 issued an additional Interim order not to take coercive action, however the Bank never disclosed regarding issuance of Sale Certificate on 08.01.2013. Thereafter, on 16.07.2014, the Writ Petitoin supra came to be disposed of directing the petitioners to approach the Banking Ombudsman. The Banking Ombudsman upon approaching, declined to entertain the request stating that the matter do not come into their ambit and informed not to approach them again. This made the petitioners to file IR 2671/2014 before the DRT, Bengaluru seeking to set-aside the auction sale conducted between 04.08.2011 to 07.01.2013 and also filed IA 3782/2014 to condone the delay under Section 5 of the Limitation Act in filing IR 2671/2014, which came to be dismissed vide order dated 14.01.2015. Thereafter, the petitioners filed IR No.2965/2015 before the DRT seeking to set-aside the proceedings initiated by the respondent Bank under SARFAESI Act complaining irregularities in issuance of sale certificate after 448 days and for repossession of the property and DCP proceedings under DCP No.6243 by the Recovery Officer, DRT, which was also came to be dismissed vide order dated 05.08.2016.

                  5.17 Aggrieved by the orders passed in IR 2671/2014 and IR 2965/2015, two appeals came to be filed before the DRAT, Chennai in AIR (SA) 81/205 and AIR SA 374/2016 respectively. The DRAT passed the order directing the petitioners to deposit amount of Rs.7,50,000/- with the Registrar of the Tribunal within a period of four weeks, failing which the appeal shall stand dismissed automatically, without further reference to the Tribunal.

                  5.18 A Writ Petition was filed in W.P.No.36694/2017, seeking to stay the further proceedings of the order dated 27.07.2017 passed by the DRAT. Another appeal filed by the petitioners in AIR (SA) 374/2016 came to be dismissed for non-compliance of order of pre-deposit. On 24.08.2017, an application in IA 1339/2017 was filed before the DRAT, Chennai for review of the pre-deposit order, which also came to be dismissed. The petitioners filed W.P.No.55010-11/2017 against the order passed by the DRAT in AIR  (SA)  374/2016  and  W.P.No.55012-13/2017 against the order dismissing IA 1339/2017 in AIR (SA) 441/2017 passed by the DRAT.

                  5.19 This Court on 09.07.2018 in the Writ Petitions supra, upon deposit of Rs.7,50,000/-, ordered to maintain status-quo in relation to the subject matter of these Writ Petitions.

6. Since all these petitions are arising in respect of the same subject matter, all are considered together and disposed of by this common order.

7. Sri.D.R.Ravishankar, learned Senior counsel submits only on two points. Firstly, he submits that, an order came to be passed by this Court on 14.10.2011 in W.P.No.37925-26/2011 that, the bids shall not be opened by  the  respondent  Bank  till  the  next  date  of  hearing. Though the order has been communicated to the Bank, in blatant violation of the order, the Bank opened the bid and after a lapse of 448 days, issued Sale Certificate accepting the amount. The proceedings culminated in the teeth of interim order in blatant violation are all void and non-est in the eye of law. Secondly, if the bid is opened according to the Bank, only for argument sake but without admitting that, earlier to intimation of interim order, there is a blatant infraction with the mandate contained under Rule 9 of Rules, 2002. In that view of the matter, on both the counts the entire auction sale transaction in favour of respondent No.3 gets vitiated and requires to be set-aside and rests his case.

AS PER RESPONDENTS:

8. Sri.T.P.Muthanna, learned counsel appearing for the Bank with all vehemence submits that the Bank opened the Sealed bids on 14.10.2011 at 11:00 am, whereas the interim order was communicated late in the evening of the said day. As such, the further action was not contemplated. Thereafter, on 07.01.2013, the Sale Certificate was issued confirming the Sale and the amount was paid. In that view of the matter, there is no infraction with mandate contained under rule 9 of Rules, 2002, as contended by learned Senior counsel appearing for the petitioner. In that view of the matter, the auction sale conducted by the authorized officer was in accordance with the law and does not call for any interference.

9. Sri.S.M.Chandrashekar, learned Senior counsel appearing for the auction purchaser with equal vehemence submits that, the purchaser is a bonafide purchaser for valuable consideration. She had bid in sealed cover, highest bid to the property reserved as per the authorized officer and succeeded in the same. In view of non-communication of further actions by the Bank, on the premise that stay is operating, she could not deposit the amount and immediately after intimation on 07.01.2013, she has deposited entire amount within no time. In that view of the matter, she cannot be called as defaulter in making payment. It is the petitioners who are protracting the matter by filing petition after petition only with an intention to defeat the right of Respondent No.3. In that view of the matter, the auction sale which was held in accordance with the law cannot be turned down only on mere contention that there is non-compliance of mandate under Rule 9 of Rules, 2002. To support his arguments, learned Senior counsel relied on the Judgment of Supreme Court  in  IDBI  BANK  LTD.,  VS.  RAMSWAROOP DALIYA (2024 SCC ONLINE SC 2878) , to contend that, in paragraph No.16 of the said Judgment, the Supreme Court has held that for any delay on the part of the Bank without there being any delay attributable to the party i.e., the purchaser, amounts to deemed extension of time and no fault can be found with the auction purchaser and sought to dismiss the petitions with costs.

10. Having considered the submissions, we have to decide whether there is any infraction with the mandate under Rule 9 of Rules, 2002. If the answer is yes, then in view of the latest law laid down by the Supreme Court in M.R.VASUMATHI supra, the auction sale requires to be declared as vitiated and void.

11. It is not in dispute that on 14.10.2011, the Writ Court passed the order, which we have already extracted above. It is the case of the Bank as well as auction purchaser that the bid was opened on 14.10.2011 at 11:00 am and respondent No.3 turned to be the highest bidder, declared as successful bidder and the secured property mortgaged, was sold in her favour. The interim order thereafter was communicated late in the evening, this was the reason for the Bank to communicate as well as the auction purchaser not to deposit the amount till 07.01.2013. In that view of the matter, the delay caused is due to the interim order and not otherwise.

12. We have perused the interim order and extracted the same afore. The interim order states that the bid shall not be opened. Even the case of the Bank that, the bids have been opened much earlier to granting of interim order i.e., at 11:00 am, as it is as there is no further order not to proceed with the sale transaction, the auction purchaser and the Bank ought to have adhered to the mandate contemplated under Rule 9 of Rules, 2002. The Bank as well as the auction purchaser cannot blow both hot and cold. At one breathe, they say that they have opened the bid and at another, they contend that the delay is caused due to the interim order. This double contradicting statement cannot be countenanced.

13. On a query as to, whether either the Bank or the auction purchaser, who appeared before the Court had sought for modification of the interim order, immediately after opening the bid on the ground that the bid had already been opened prior to granting of the interim order, the categorical answer is ‘No’.

14. In that view of the matter, we are not in a position to comprehend the contention that after opening the bid way back in the year 2011, the auction purchaser was permitted to pay amount and Sale Certificate was issued after considerable delay of 448 days because, there is an interim order operating. In that view of the matter, in view of law declared by the Supreme Court in M.R.VASUMATHI supra, the entire sale proceedings stands vitiated.

15. It is very profitable to quote certain paragraphs from the Judgment of M.R.VASUMATHI supra, wherein the Supreme Court extensively considered the mandate contained   under   Rule   9,   starts   with   heading

                  I. COMPLIANCE WITH RULE 9 : A STATUTORY SINE QUA NON, and runs up to paragraph No.34.

                  "I. COMPLIANCE WITH RULE 9: A STATUTORY SINE QUA NON

                  25. Rule 9 of the SARFAESI Rules squarely governs the confirmation of sale and the manner of payment of the sale consideration. Sub-Rules 3, 4 and 5 of the unamended SARFAESI Rules13 may profitably be noticed thus:

                  (3) On every sale of immovable property, the purchaser shall immediately pay a deposit of twenty-five % of the amount of the sale unamended SARFAESI Rules, as it stood at the time of the impugned sale price, to the authorised officer conducting the sale and in default of such deposit, the property shall forthwith be sold again.

                  (4) The balance amount of purchase price payable shall be paid by the purchaser to the authorised officer on or before the fifteenth day of confirmation of sale of the immovable property or such extended period as may be agreed upon in writing between the parties.

                  (5) In default of payment within the period mentioned in sub-rule (4), the deposit shall be forfeited and the property shall be resold and the defaulting purchaser shall forfeit all claim to the property or to any part of the sum for which it may be subsequently sold.

                  (emphasis ours)

                  26. As a sequitur to the aforementioned legal provisions, the auction purchaser is mandated to immediately deposit 25% of the sale price (inclusive of earnest money) on the date of sale; and in default of such deposit, the property shall forthwith be resold. Further, the balance of purchase price is required to be paid within the fifteenth day of confirmation of sale or within such written agreed extended time, failing which the deposit shall stand forfeited. Also, in such a case, the purchaser would forfeit all his claims either to the property or to any part of the sum for which such property may subsequently be sold.

                  27. The aforesaid legal position finds lucid expression in Sri Siddeshwara Cooperative Bank Ltd. v. Ikbal, as follows:

                  ***

                  13.3. Sub-rule (3) lays down that on every sale of immovable property, the purchaser shall immediately make the deposit of 25% of the amount of the sale price. In default of such deposit, the property shall forthwith be sold again.

                  13.4. Sub-rule (4) provides that the balance amount of purchase price payable shall be paid by the purchaser on or before the fifteenth day of confirmation of sale of the immovable property or such extended period as may be agreed upon in writing between the parties.

                  13.5. Sub-rule (5) makes a provision that if the balance amount of purchase price is not paid as required under sub-rule (4), then the deposit shall be forfeited and the property shall be resold and the defaulting purchaser shall forfeit all claim to the property or to any part of the sum for which it may be subsequently sold.

                  13.6. According to sub-rule (6), on confirmation of sale by the secured creditor and if the terms of payment have been complied with, the authorised officer exercising power of sale shall issue a certificate of sale of the immovable property in favour of the purchaser in the form given in Appendix V to the 2002 Rules.

                  14. A reading of sub-rule (1) of Rule 9 makes it manifest that the provision is mandatory. The plain language of Rule 9(1) suggests this. Similarly, Rule 9(3) which provides that the purchaser shall pay a deposit of 25% of the amount of the sale price on the sale of immovable property also indicates that the said provision is mandatory in nature. As regards balance amount of purchase price, sub-rule (4) provides that the said amount shall be paid by the purchaser on or before the fifteenth day of confirmation of sale of immovable property or such extended period as may be agreed upon in writing between the parties. The period of fifteen days in Rule 9(4) is not that sacrosanct and it is extendable if there is a written agreement between the parties for such extension. What is the meaning of the expression “written agreement between the parties” in Rule 9(4)? The 2002 Rules do not prescribe any particular form for such agreement except that it must be in writing. The use of the term “written agreement” means a mutual understanding or an arrangement about relative rights and duties by the parties. For the purposes of Rule 9(4), the expression “written agreement” means nothing more than a manifestation of mutual assent in writing. The word “parties” for the purposes of Rule 9(4) we think must mean the secured creditor, borrower and auction-purchaser.

                  ***

                  19. There is no doubt that Rule 9(1) is mandatory but this provision is definitely for the benefit of the borrower. Similarly, Rule 9(3) and Rule 9(4) are for the benefit of the secured creditor (or in any case for the benefit of the borrower). It is settled position in law that even if a provision is mandatory, it can always be waived by a party (or parties) for whose benefit such provision has been made. The provision in Rule 9(1) being for the benefit of the borrower and the provisions contained in Rule 9(3) and Rule 9(4) being for the benefit of the secured creditor (or for that matter for the benefit of the borrower), the secured creditor and the borrower can lawfully waive their right. These provisions neither expressly nor contextually indicate otherwise. Obviously, the question whether there is waiver or not depends on the facts of each case and no hard-and-fast rule can be laid down in this regard.

                  (emphasis ours)

                  28. Even upon a cursory perusal of Rule 9 of the SARFAESI Rules that existed at the time of the impugned sale, it is clear that these provisions are neither ornamental nor directory; they are couched in mandatory terms and go to the root of the validity of the sale. A conjoint reading of the relevant sub-rules of Rule 9 underscore the mandatory character of these provisions, particularly accentuating the requirement of balance deposit under sub-rule (4), which is integral to the sanctity and credibility of the auction mechanism. Any deviation therefrom, absent legally sustainable justification, would render the process vitiated.

                  29. The factual position, as is borne out from the extant record, is not in serious dispute – i) auction sale was conducted on 11.03.2010; ii) auction purchaser was declared successful on the said date; iii) 25% of the bid amount was deposited on 10.03.2010/11.03.2010 vide a demand draft of Rs. 9,00,000/-, prepared on 10.03.2010; and iv) two further demand drafts of Rs. 6,80,000/- and Rs. 36,95,125/- were furnished on 11.03.2010.

                  30. However, the balance 75% of the bid amount was admittedly paid only on 31.03.2010. The lingering lis is as to whether this subsequent deposit satisfies Rule 9(4). The outer time limit of fifteen days expired on 26.03.2010, as reflected in the communication issued by the secured creditor dated 11.03.2010, which may be reproduced here for the convenience of reference:

                  ***

                  4. Please note that you have to pay the balance sale price within 15 days of Confirmation of Sale ie., today. In case of your failure to pay as said above, the entire bid amount paid by you shall be forfeited by the Authorised Officer without any notice and the sale will be cancelled.

                  31. The payment of the remaining 75%, on 31.03.2010 is, therefore, ex facie beyond the statutory period. In view of the above, the contention of the auction purchaser that the sale stood confirmed only on 11.03.2010 is untenable.

                  32. The following passage from IDBI Bank Ltd. v. Ramswaroop Daliya lends credence to the proposition:

                  13. Notwithstanding the above, the provisions of sub-Rules (4) and (5) of Rule 9 of the Rules, if read together in conjunction, would reveal that it is only for the default in payment of the balance auction amount within the period mentioned that the property could be resold and that the period of 15 days stipulated therein for the deposit of the balance sale amount may be extended, as may be agreed upon in writing. It means that first there has to be a default on part of the auction purchaser to invite cancellation of the auction and second, that the period of deposit stipulated therein is not absolute rather extendable with the agreement of the parties.

                  (emphasis ours)

                  33. Furthermore, the contention advanced on behalf of the secured creditor by its learned counsel that any deviation in the timeline of payment stood regularised by a valid exercise of power of extension or waiver is equally unbacked by any demonstrable material. Nothing is borne out of the record to demonstrate that there was any prayer for extension of time made by the auction purchaser at any time prior 2024 SCC OnLine SC 2878 to 31.03.2010 or that any written agreement extending the time was entered into by and between the secured creditor and the auction purchaser.

                  34. The aforesaid legal position leads us to the examination of the consequence of non-compliance with the statutorily ordained timeline, in the absence of any record of written agreement between the secured creditor and the auction purchaser in the present factual matrix."

16. In view of the afore, applying the same to the case on hand, the bid was opened on 14.10.2011 declaring respondent No.3, the only bidder as her husband opted out, as successful bidder. The purchaser ought to have deposited the entire amount in terms of Rules which were existing as on the date i.e., prior to 2016 amendment, 25% within 24 hours and 75% within 15 days from the date of Sale confirmation. There is nothing on record to show that any attempt was made by the auction purchaser to make the payment without prejudice to the right, even if it is taken as it is that there is an interim order operating.

17. It is very germane to point out here that, the authorized officer of the Bank though showed interest to open the bid on 14.10.2011, however not adhered to the mandate under Rule 9 on the premise that there is an interim order with respect to further auction sale transaction. We find no modified interim order with respect to the further auction sale transaction. It is the case of the Bank as well as the auction purchaser that the bid was opened much earlier to passing of the interim order. If that be so, nothing stood in their way to disclose the same before this Court by means of filing an application seeking modification or permission to proceed with the sale proceedings, though such an action even was not necessitated as there was no restraint order to proceed with the auction sale. In the absence of such an action, now it is not permissible for the Bank as well as the auction purchaser to contend that, in view of interim order operating, the amount was not paid, but paid belatedly after 448 days. Here, also the Bank failed to explain what made them to accept the amount towards the sale proceedings in the absence of any modification to the interim order, as admitted by both the respondents i.e., Bank and auction purchaser, the interim order which was granted on 14.10.2011 was continuing as on 07.01.2013. In that view of the matter, the contention of the Bank as well as the auction purchaser require to be rejected, and is accordingly, rejected.

18. There is nothing placed on record to show the mortal hurry in accepting the amount, issuing Sale Certificate within day one or two. It is an admitted fact that the auction purchaser is no stranger to the transaction. She is admittedly a tenant on lease in ground and first floor of the property, running a hospital.

19. A bird view of the entire factual transaction stated supra, clearly shows that the Bank had acted less than a Bank, but more than a Recovery Agent for realization of debt due to it. The Bank standing as a Trustee between the borrower and the auction purchaser and must consider welfare of both the parties. The actions contemplated afore clearly show that this aspect of trust is missing. In that view of the matter we are bound under law to hold that, the entire auction sale proceedings gets vitiated to infraction of mandate contemplated under Rule 9 of Rules 2002, despite the fact that the purchaser has deposited the entire amount of sale consideration, and no equitable principles be employed when there is a clear violation of law brought in a case. Our view gains strength with the maxim in law 'dura lex sed lex', which means the law is harsh, but it is the law.

20. In view of the facts afore, we are of the considered opinion that there remains nothing even to remand the matter to the DRAT to consider the matter, in view of undisputed fact which we have considered afore. In that view of the matter, the remand would be a futile exercise and accordingly, we proceed to pass the following:

                  ORDER

                  (i) The Writ Petitions calling in question the orders passed by the DRAT are allowed, declaring that the Sale conducted on 04.08.2011 and further proceedings by way of Sealed tender and the proceedings on 14.10.2011 opening the Sealed tender, declaring respondent No.3 as successful bidder and permitting him to deposit amount on 07.01.2013 and executing the sale deed on 08.01.2013 stands vitiated as the bid amount was not deposited within the time line stipulated under the mandate of Rule 9 of Rules, 2002 and the entire auction sale transaction gets vitiated.

                  (ii) The Bank shall refund the entire amount said to have been deposited by the auction purchaser along with applicable interest.

                  (iii) The Bank is reserved liberty to take action to recover the amount in due, in accordance with the law, adhering to all the mandatory provisions contained under provisions of SARFAESI Act and Rules therein and in view of the observations of the Supreme Court in M.R.VASUMATHI supra.

                  (iv) Given the facts and circumstances of the case, no order as to costs.

21. In view of disposal of the Writ Petitions, pending interlocutory applications, if any, stand disposed of.