Supreme Court further clarifies Sarfaesi rule
The Supreme Court has clarified the procedure to be followed by secured creditors while pursuing its rights under the security Interest (Enforcement) Rules against a defaulting, a borrower and his guarantors. While quashing the judgement of the Andhra Pradesh High Court in the case, Canara Bank Vs Amarender, it stated that it is permissible to simultaneously issue notice to the borrower about the intension to sell mortgaged property and issue a public notice in newspapers about the proposed auction.
The High Court had held a separate notice with a gap of 30 days notice was required and simultaneous notice to the burrower and notice of public e-auction was against the rules passed under the Sarfaesi Act. The Supreme Court stated there was no need to wait for 30 days to sell the secured asset.