2015 (2) TMI 1240 - HC - Indian Laws

Issue of sale notice - symbolic possession - SARFAESI Act - Held that - It is clear from the declaration of law that only after possession is handed over to the secured creditor, the later is entitled to invoke Rule 8 of the Security Interest Enforcement Rules, 2002 and issue the sale notice. Admittedly in the instant case possession has not been handed over to the secured creditor in terms of paragraphs 36. 1 to 36.3 of Standard Chartered Bank Vs. V. Noble Kumar & Ors. (2010 (7) TMI 277 - HIGH COURT OF MADRAS ). Therefore, we find no reason to interfere with the order passed by the learned Single Judge quashing the sale notice. This order shall not preclude the appellant-Bank from taking appropriate steps under the SARFAESI Act, 2002 in accordance with law. The appeal is accordingly dismissed.

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Validity of quashing the sale notice by the learned Single Judge.

Condonation of Delay:
In the first issue, the court considered the delay of 47 days in filing the appeal and decided to condone the delay after examining the application and hearing the advocates for both parties. The application for condonation of delay was allowed, highlighting the importance of timely filing in legal proceedings.

Validity of Quashing Sale Notice:
The second issue revolved around the appellant Bank challenging the judgment quashing the sale notice dated 5th July, 2014. The appellant argued that since symbolic possession had been taken, interference with the sale notice was unwarranted. However, the respondent contended that as per the precedent set in Standard Chartered Bank Vs. V. Noble Kumar & Ors., physical possession must precede the issuance of a sale notice. The court delved into the legal aspects, citing the Apex Court's interpretation of relevant sections. It was emphasized that the borrower can appeal under Section 17 only after losing possession of the secured asset. The court clarified that possession must be handed over to the secured creditor before invoking Rule 8 of the Security Interest Enforcement Rules, 2002 for issuing a sale notice. Since possession had not been transferred to the appellant Bank as per the prescribed procedures, the court upheld the Single Judge's decision to quash the sale notice. The appellant Bank was allowed to take appropriate steps under the SARFAESI Act, 2002 in compliance with the law. Consequently, the appeal was dismissed along with the connected application for Stay, with no order as to costs.

This detailed analysis of the judgment from the Calcutta High Court showcases the meticulous legal considerations and precedents applied in resolving the issues raised by the parties involved.