SARFAESI enforcement need not await withdrawal of DRT proceedings, and minor section 13(3A) sequencing defects do not vitiate action.

A secured creditor need not withdraw a pending DRT recovery application before invoking SARFAESI remedies; the two proceedings may run independently, and prior withdrawal is not a condition precedent. A possession notice issued under section 13(4) before communication of reasons under section 13(3A) does not automatically invalidate enforcement, because section 13(3A) is intended to ensure transparency and fair play. Where the borrower shows no prejudice and there is substantial compliance with the statute, the procedural sequence is treated as at most an irregularity. The bank's SARFAESI measures were upheld, while the borrower remained free to pursue the DRT remedy.

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Issues: (i) Whether recourse to the SARFAESI Act, 2002 was impermissible without withdrawal of the pending recovery application before the DRT. (ii) Whether issuance of the possession notice under section 13(4) before communication of reasons under section 13(3A) invalidated the measures taken under the SARFAESI Act, 2002.

Issue (i): Whether recourse to the SARFAESI Act, 2002 was impermissible without withdrawal of the pending recovery application before the DRT.

Analysis: The earlier view that withdrawal of the DRT application was a condition precedent was treated as no longer good law in light of the Supreme Court's ruling that a secured creditor is not obliged to withdraw its pending original application before taking recourse to the SARFAESI Act, 2002. The secured creditor may choose whether or not to seek leave to withdraw, and the remedy under the SARFAESI mechanism can be pursued independently.

Conclusion: The requirement of prior withdrawal of the DRT proceeding was not mandatory, and the bank was entitled to proceed under the SARFAESI Act, 2002.

Issue (ii): Whether issuance of the possession notice under section 13(4) before communication of reasons under section 13(3A) invalidated the measures taken under the SARFAESI Act, 2002.

Analysis: Section 13(3A) requires consideration of the borrower's representation and communication of reasons for non-acceptance within the prescribed time, but the communication is meant to inform the borrower and does not itself confer a right to challenge the proposed action at that stage. The Court held that the object of the provision is transparency and fair play, and that the borrower had not shown prejudice from the sequence adopted. On the facts, the lapse was at most an irregularity and there was substantial compliance with the statutory requirement.

Conclusion: The possession notice was not invalidated, and the measures taken by the bank were upheld.

Final Conclusion: The appellate court restored the bank's action, upheld the SARFAESI measures, and left the borrower free to pursue the statutory remedy before the DRT.

Ratio Decidendi: Withdrawal of a pending DRT recovery application is not a precondition to invoking SARFAESI remedies, and a technical departure from the sequence under section 13(3A) does not vitiate enforcement action absent demonstrated prejudice where there is substantial compliance with the statute.

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