MATHEW VARGHESE versus M. AMRITHA KUMAR & ORS.

Citation: [2014] 2 S.C.R. 736 · Decided: 10-02-2014 · Supreme Court of India · Bench: A.K. PATNAIK · Disposal: Disposed off
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Judgment (excerpt)

A 
B 
[2014] 2 S.C.R. 736 
MATHEW VARGHESE 
v. 
M. AMRITHA KUMAR & ORS. 
(Civil Appeal Nos. 1927-1929 of 2014) 
FEBRUARY 10, 2014 
[A.K. PATNAIK AND FAKKIR MOHAMED 
IBRAHIM KALIFULLA, JJ.] 
SEGUR/TISA T/ON AND RECONSTRUCT/ON OF 
C FINANCIAL 
ASSETS 
AND 
ENFORCEMENT 
OF 
SECURITY INTEREST ACT, 2002: 
s.13(1) - Held: Any secured creditor may be entitled to 
enforce the secured asset created in its favour on its own 
0 without resorting to any court proceedings or approaching the 
Tribunal, however, such enforcement should be in conformity 
with the other provisions of the SARFAESI Act. 
s.13(8) - Right of borrower - Held: There is a valuable 
right recognized and asserted in favour of the borrower, who 
E is the owner of the secured asset and who is extended an 
opportunity to take all efforts to stop the sale or transfer till the 
last minute before which the said sale or transfer is to be 
effected - Such an ownership right is a Constitutional Right 
protected under Article 300A of the Constitution, which 
F mandates that no person shall be deprived of his property 
save by authority of law - Therefore, de hors, the extent of 
borrowing made and whatever costs, charges were incurred 
by the secured creditor in respect of such borrowings, when it 
comes to the question of realizing the dues by bringing the 
G property entrusted with the secured creditor for sale to realize 
money advanced without approaching any Court or Tribunal, 
the secured creditor as a trustee cannot deal with the said 
property in any manner it likes and property. can be disposed 
of only in the manner prescribed in the SARFAESI Act -
H 
736 
MATHEW VARGHESE v. M. AMRITHA KUMAR & 
737 
ORS. 
Therefore, the creditor should ensure that the borrower was 
A 
clearly put on notice of the date and time by which either the 
sale or transfer will be effected in order to provide the required 
opportunity to the borrower to take all possible steps for 
retrieving his property or at least ensure that in the process 
of sale the secured asset derives the maximum benefit and 
B 
the secured creditor or anyone on its behalf is not allowed to 
exploit the situation of the borrower by virtue of the 
proceedings initiated under the SARFAESI Act - Constitution 
of India, 1950 - Article 300A. 
s.13(8) - Conflict with r.15(1) of Income Tax Rules, 1962 C 
- Held: r. 15 of the Income Tax Rules, 1962 does not in any 
way conflict with either s.13(8) of the SARFAESI Act or rr.8 
and 9 of the Security Interest (Enforcement) Rules, 2002 - The 
sub-rule (1) of r. 15 only deals, with the discretion of the Tax. 
Recovery Officer to adjourn the sale by recording his reasons· 
D 
for such adjournment - As far as sub-rule (2) is concerned, 
the same is clear to the effect that a sale of immovable 
property once adjourned under sub-rule (1) for a longer period 
than one calendar month, a fresh proclamation of sale should 
be made unless the defaulter consents to waive it - The said 
E 
sub-rule also does not conflict with any of the provisions of 
the SARFAESI Act, in particular s.13 or rr.8 and 9. 
s.35 - Non obstante clause - Held: s.35 states that the 
provisions of the SARFAESI Act will have overriding effect 
F 
notwithstanding anything inconsistent contained in any other 
law for the time being in force - Therefore, reading s.35 and 
s.37 together, it will have to be held that in the event of any of 
the provisions of RDDB Act not being inconsistent with the 
provisions of the SARFAESI Act, the application of both the 
G 
Acts, namely, SARFAESI Act and RDDB Act, would be 
complementary to each other - The effect of s.37 would, 
therefore, be that in addition to the provisions contained under 
the SARFAESI Act, in respect of proceedings initiated under 
the said Act, it will be in order for a party to fall back upon the 
H 
738 
SUPREME COURT REPORTS 
[2014] 2 S.C.R. 
A provisions of the other Acts mentioned in s.37 namely, the 
Companies Act, 1956, the Securities Contract& (Regulation) 
Act, 1956, the Securities and Exchange Board of India Act, 
1992, the Recovery of Debts Due to Banks and Finances 
Institutions Act, 1993, or any other law for the time being in 
B forc.e - Recovery of Debts Due to Banks and Finances 
Institutions Act, 1993. 
SECURITY INTEREST (ENFORCEMENT) RULES, 
2002: 
C 
rr.8 and 9 - Procedure to be followed by a secured 
creditor while resorting to a sale after the issuance of the 
proceedings u/ss.13(1) to (4) of the SARFAESI Act - Held: 
Reading su
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