Strict compliance with secured asset sale procedure required; consolidated notice and unexplained rejection of higher offer could not stand.

A secured creditor disposing of an immovable secured asset must follow the staged procedure under the Rules, including a possession notice, publication, valuation and reserve price fixation, a separate 30-day sale notice, and the prescribed sale process. A consolidated possession-cum-sale notice was treated as non-compliant because the framework requires distinct steps and meaningful opportunity for the borrower to respond. The creditor also failed to justify rejection of the borrower's higher settlement offer in favour of a third party, with no transparent decision-making and no completed sale shown on the record. The challenged action was set aside and the disposal process was required to restart in accordance with law.

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Issues: (i) Whether the secured creditor complied with the mandatory procedure for possession and sale of the immovable secured asset under the Rules. (ii) Whether rejection of the borrower's higher settlement offer and the proposed sale in favour of a third party could be sustained.

Issue (i): Whether the secured creditor complied with the mandatory procedure for possession and sale of the immovable secured asset under the Rules.

Analysis: The statutory scheme required a possession notice under rule 8(1), publication of such notice, valuation and fixation of reserve price under rule 8(5), a separate 30-day notice for sale under rule 8(6), and observance of the sale procedure under rule 9. The notice issued in the case was treated as a consolidated possession-cum-sale notice, but the prescribed framework contemplated distinct stages. The notice for possession was only to inform the borrower and the public that possession had been taken, whereas the sale notice had to give the borrower a meaningful opportunity to respond to the proposed mode of sale. The publication in the newspaper also did not satisfy the required 30-day period.

Conclusion: The secured creditor did not comply with the mandatory procedure.

Issue (ii): Whether rejection of the borrower's higher settlement offer and the proposed sale in favour of a third party could be sustained.

Analysis: The borrower had offered a higher amount than the third party, and the record did not show a transparent or reasoned decision-making process for rejecting that offer while accepting a lower proposal. The bank could have sought a payment schedule or required immediate payment if the third-party amount had already been received, but it did neither. There was also no completed sale in favour of the third party, because the materials showed only conditional acceptance and no confirmed sale. The action therefore could not be justified as a completed or lawful disposal of the secured asset.

Conclusion: The rejection of the borrower's offer and the proposed sale in favour of the third party were not sustainable.

Final Conclusion: The challenged action was set aside, the third party's deposit was ordered to be refunded, and the secured creditor was directed to recommence the disposal process in accordance with law from the stage of possession notice.

Ratio Decidendi: A secured creditor disposing of immovable secured assets must strictly comply with the staged notice and sale procedure prescribed by the Rules, and a sale or proposed sale cannot be sustained where the statutory safeguards and transparent decision-making requirements are not observed.

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