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Issues: (i) Whether the borrower waived compliance with the mandatory 30-day notice and related procedural requirements governing sale of secured assets under the SARFAESI framework. (ii) Whether non-compliance with the mandatory sale procedure rendered the auction sale null and void.
Issue (i): Whether the borrower waived compliance with the mandatory 30-day notice and related procedural requirements governing sale of secured assets under the SARFAESI framework.
Analysis: The statutory scheme requires strict compliance with the notice and sale procedure before sale of an immovable secured asset. Although mandatory requirements may be waived when they exist for the benefit of the party concerned, waiver must be shown by clear express or implied conduct amounting to an intentional relinquishment of a known right. Mere delay, earlier litigation, or failure to succeed in previous attempts to sell the property does not by itself establish waiver of the right to object to a later defective sale notice. On the facts, the borrower promptly challenged the impugned auction notice and pursued available remedies; there was no material showing conscious abandonment of the procedural safeguards.
Conclusion: The borrower did not waive the mandatory procedural requirements.
Issue (ii): Whether non-compliance with the mandatory sale procedure rendered the auction sale null and void.
Analysis: The sale notice did not satisfy the mandatory requirements as to notice period and associated sale procedure under the SARFAESI Rules. Once the statutory safeguards were not complied with, and no waiver was proved, the sale could not be sustained. The scheme protects the borrower's property interest and requires the secured creditor to follow the prescribed procedure strictly before effecting sale of the secured asset.
Conclusion: The auction sale was liable to be treated as null and void.
Final Conclusion: The sale in favour of the auction purchaser could not be sustained for breach of the mandatory SARFAESI sale procedure, and the appeals failed.
Ratio Decidendi: Mandatory sale safeguards for secured assets may be waived only by clear, informed and intentional conduct; absent such waiver, a sale held in breach of the prescribed procedure is invalid.
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