Strict compliance with Rule 8(6) is mandatory: inadequate local newspaper publication can vitiate a secured asset sale.

Under the SARFAESI framework, sale of a secured asset must strictly comply with Rule 8(6) by giving public notice in two leading newspapers, including one vernacular newspaper with sufficient circulation in the locality. The Court accepted that publication in the Delhi edition of the vernacular newspaper did not satisfy the locality requirement for Faridabad, and the English publication also failed to show adequate local circulation. Prior knowledge of the sale notice did not cure this mandatory defect. Applying the rule that a prescribed statutory method must be followed as enacted, the sale notice and consequential auction were treated as unsustainable.

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Issues: Whether the sale of the secured asset complied with Rule 8(6) of the Security Interest (Enforcement) Rules, 2002 by publication of the sale notice in two leading newspapers, one being a vernacular newspaper having sufficient circulation in the locality where the property was situated, and whether the sale certificate and consequential auction could be sustained.

Analysis: The requirement under Rule 8(6) is that public notice of sale must be issued in two leading newspapers, including one vernacular newspaper with sufficient circulation in the locality. The property was situated in Faridabad, and the Court accepted the Appellate Tribunal's finding that publication in the Delhi edition of the vernacular newspaper did not establish sufficient circulation in Faridabad. The Court also noted that the publication in the English newspaper did not show sufficient circulation in the locality. The purpose of the rule is to secure widest publicity so that interested purchasers can participate and the secured creditor may obtain the best price. The borrower's prior knowledge of the sale notice did not cure non-compliance with the mandatory publication requirement. The Court further relied on the principle that where a statute prescribes a manner for doing an act, it must be done in that manner alone.

Conclusion: The sale was held to be not in accordance with Rule 8(6) and could not be validated. The writ petition was therefore dismissed and the auction purchasers were not granted relief.

Ratio Decidendi: Sale of a secured asset under the SARFAESI framework must strictly comply with the mandatory publication requirements of Rule 8(6), and failure to give effective public notice in a vernacular newspaper having sufficient circulation in the locality vitiates the sale.

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