CANARA BANK versus M. AMARENDER REDDY & ANR.

Citation: [2017] 3 S.C.R. 748 · Decided: 02-03-2017 · Supreme Court of India · Bench: DIPAK MISRA · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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[2017] 3 S.C.R. 748 
CANARA BANK 
v. 
M. AMARENDER REDDY & ANR. 
(Civil Appeal No. 3411 of2017) 
MARCH 02, 2017 
[DIPAK MISRA, A. M. KHANWILKAR AND 
MOHAN M. SHANTANAGOUDAR, JJ.] 
Security Interest (Enforcement) Rules, 2002: 
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rr. 8(6) rlw. 1: 9- Notice under - Of intention of sale - l~suance 
of - Held: The secured credit01~ is required to give a 30 days 
individual notice of intention of sale in addition to public notice for 
sale u/r. 8(6) - But both the notices i.e. individual notice as well as 
public notice can be issued simultaneously - r.8(6) does not require 
that the public notice u/r. 8(6) can be issued only after the expiry of 
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30 days from issuance of individual notice - The only restriction is 
to give thirty days time-gap between such notice and the date of 
sale of the immovable secured asset. 
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Allowing the appeal, the Court 
HELD: 1. Possession notice is distinct from the notice for 
sale of the secured asset. In that, possession notice is rcq uired 
to be given in terms of Rule 8(1) read with 8(2) of Security Interest 
(Enforcement) Rules, 2002. Whereas, a notice of intention of sale 
is required to be given to the borrower in terms of Ruic 9(1) 
read with Rule 8(6) of the said Rules. This is to give intimation to 
the borrower about the proposed date of sale to be held after the 
statutory period of thirty days .. Further, in case of sale of the 
secured assets, either by inviting tenders from the public or by 
holding public auction being the mode permitted by sub-rule (5) 
of Rule 8, the secured creditor is required to give a public notice 
in two leading newspapers in terms of the proviso in sub-rule ( 6) 
of Rule 8. Such public notice, however, may not be necessary in 
case of sale of a secured asset, if it is by way of the other modes 
specified in Sub-clause (a) or (d) of sub-rule (5) of Rule 8, to wit, 
by obtaining quotations from the persons dealing with similar 
secured assets ·or otherwise interested in buying such asset; or 
by private treaty. [Para 11)(761-B-E] 
748. 
CANARA BANK v. M. AMARENDER REDDY 
2. The secured creditor, after it decides to proceed with 
the sale of secured asset consequent to taking over possession 
(symbolic or physical as the case may be), is no doubt required 
· to give a notice of 30 days for sale of the immovable asset as per 
sub-rule 6 of Rule 8. However, there is nothing in the Rules, 
either express or implied, to take the view that a public notice 
under sub-rule (6) of Rule 8 must be issued only after the expiry 
of 30 days from issuance of individual 11otice by the authorized 
officer to the borrower about the intention to sell the immovable 
secured asset. In other words, it is permissible to simultaneously 
issue notice to the borrower about the intention to sell the secured 
assets and also to issue a public notice for sale of such secured 
asset by inviting tenders from the public or by holding public 
auction. The only restriction is to give thirty days' time-gap 
between such notice and the date of sale of the immovable secured 
asset. [Para 12][761-F-II] 
3. Thus, the High Court has committed a manifest error in 
assuming that the notice of intention of sale to be given to the 
borrower and a public notice for sale, cannot be simultaneously 
issued. The High Court was also not right in observing that after 
a notice regarding intention to sell the secured asset under sub-
rule (6) of Rule 8 is given by the authorized officer to the borrower, 
only on expiry of 30 days therefrom, can the secured creditor 
take a decision about the mode of sale referred to in sub-rule (5) 
of Rule 8 after giving notice to the borrower and then issue a 
public notice after expiry of further thirty days. By this 
interpretation, the High Court has virtually re-written the 
provisions and inevitably extended the time-frame of 30 days 
specified in sub-rule (6) of Ruic 8 (atleast in relation to the sale 
of secured asset by inviting tenders from the public or by holding 
public auction). [Para 13] [762-A-C] 
Mathew Varghese vs. Amritha Kumar and Ors. (2014) 
5 SCC 610 : (2014) 2 SCR 736 - referred to 
Case Law Reference 
[2Q14] 2 SCR 736 
referred to 
Paras 
CIVIL APPELLATE JURISDJCTION : Civil Appeal No. 3411 
of20l 7. 
749 
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SUPREME COURT REPORTS 
[20 I 7] 3 S.C .R. 
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From the Judgment and Order elated I I .04.2016 of the High Court 
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of Judicature at Hyderabad for the State ofTelangana and t

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