The Andhra Pradesh High Court reaffirms, following Supreme Court law, that a 30-day gap between Rule 8(6) and Rule 9(1) notices is not mandatory, and non-compliance does not vitiate SARFAESI auction proceedings. This decision sets aside contrary DRT stays and directs adherence to Supreme Court interpretation, serving as binding precedent for subordinate courts and tribunals in SARFAESI matters.
Summary
| Category | Data |
|---|---|
| Case Name | WP/6425/2025 of THE AUTHORISED OFFICER Vs GAYATHRI COTTON GINNING MILLS |
| CNR | APHC010119182025 |
| Date of Registration | 11-03-2025 |
| Decision Date | 29-10-2025 |
| Disposal Nature | ALLOWED NO COSTS |
| Judgment Author | R. RAGHUNANDAN RAO, J. |
| Concurring or Dissenting Judges | DHIRAJ SINGH THAKUR, CJ (concurring) |
| Court | High Court of Andhra Pradesh |
| Bench | DHIRAJ SINGH THAKUR, CJ & R. RAGHUNANDAN RAO, J. |
| Precedent Value | Binding on subordinate courts and tribunals in Andhra Pradesh; persuasive for other High Courts |
| Overrules / Affirms | Affirms Supreme Court precedent; sets aside DRT order contradictory to Supreme Court rulings |
| Type of Law | Banking, Debt Recovery, SARFAESI Act, Procedural Law |
| Questions of Law | Whether separate 30-day notices under Rule 8(6) and Rule 9(1) of the Security Interest (Enforcement) Rules, 2022 are mandatory prior to auction of secured assets under SARFAESI Act. |
| Ratio Decidendi | The Supreme Court has held, and was followed by the High Court, that the requirement of a 30-day gap between notices under Rule 8(6) and Rule 9(1) is not mandatory. Deviation from this requirement does not vitiate the proceedings. Combined notice is permissible. Consequently, the DRT’s stay was set aside as being contrary to this settled law. |
| Judgments Relied Upon | M. Rajendran vs. KPK Oils & Proteins India (P) Ltd (2025 SCC Online SC 2036); Division Bench of AP High Court in W.P. No. 19059 of 2024 (order dated 16.10.2025) |
| Logic / Jurisprudence / Authorities Relied Upon by the Court | Supreme Court’s reasoning in M. Rajendran affirming the non-mandatory nature of the 30-day gap requirement; AP High Court’s previous application of this law. |
| Facts as Summarised by the Court | The DRT stayed SARFAESI proceedings on the ground that only a combined notice was issued for auction, not separate notices under Rules 8(6) & 9(1). The Bank challenged this as being contrary to Supreme Court precedent. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts and Debts Recovery Tribunals within the jurisdiction of Andhra Pradesh High Court |
| Persuasive For | Other High Courts, Debts Recovery Tribunals outside Andhra Pradesh |
| Follows | M. Rajendran vs. KPK Oils & Proteins India (P) Ltd (2025 SCC Online SC 2036); Division Bench of AP High Court in W.P. 19059/2024 (16.10.2025) |
What’s New / What Lawyers Should Note
- Reiterates that the gap of 30 days between notice under Rule 8(6) and Rule 9(1) is not a mandatory statutory requirement in SARFAESI auctions.
- Confirms that issuance of a combined notice covering both rules does not automatically invalidate auction proceedings under the Security Interest Rules, 2022.
- Lawyers can cite this authority to counter objections to auctions grounded solely on non-issuance of separate notices.
- Sets aside contrary interpretations by Debt Recovery Tribunals as being inconsistent with Supreme Court and Division Bench precedent.
Summary of Legal Reasoning
- The DRT had stayed further SARFAESI proceedings, including auction, on the basis that separate 30-day notices under Rule 8(6) and Rule 9(1) were not issued, instead only a combined notice was served.
- The High Court relied on the Supreme Court’s holding in M. Rajendran vs. KPK Oils & Proteins India (P) Ltd, which clarified that the 30-day gap is not mandatory.
- The Supreme Court reasoning adopted by the High Court was that any deviation from the 30-day notice requirement does not vitiate the proceedings or render the auction invalid, provided substantial compliance.
- The High Court also referred to its own prior Division Bench decision in W.P. No. 19059/2024 (16.10.2025), which had adopted the same approach, allowing auction proceedings to continue.
- The order of the DRT was therefore set aside and the Tribunal was directed to decide the main appeal expeditiously, without being fettered by the issue of non-issuance of separate notices.
Arguments by the Parties
Petitioner
- The Debt Recovery Tribunal’s interpretation that separate 30-day notices under Rule 8(6) and Rule 9(1) are mandatory is contrary to the law laid down by the Hon’ble Supreme Court in M. Rajendran vs. KPK Oils & Proteins India (P) Ltd.
- Combined notice is legally sufficient; issue of 30-day gap does not vitiate proceedings.
Respondent
- The DRT correctly found that issuing a combined notice instead of two separate notices violated the requirements of the Rules, justifying stay of the auction and further proceedings.
Factual Background
The petition arose from SARFAESI proceedings initiated by the petitioner against the respondent. The respondent challenged these proceedings before the DRT, seeking a stay, arguing that the Bank had not issued separate 30-day notices under Rule 8(6) and 9(1), but a combined notice instead. The DRT stayed all further proceedings, including an auction scheduled for 21.11.2024. The petitioner approached the High Court against this stay order, relying on Supreme Court precedent.
Statutory Analysis
- The case turned on interpretation of Rule 8(6) and Rule 9(1) of the Security Interest (Enforcement) Rules, 2022.
- The High Court, following the Supreme Court, construed these provisions to mean that issuance of notices need not be separated by a rigid 30-day period; substantial compliance suffices.
- The requirement is procedural, not mandatory, and deviation does not invalidate the process.
Dissenting / Concurring Opinion Summary
Both judges (DHIRAJ SINGH THAKUR, CJ and R. RAGHUNANDAN RAO, J) were in agreement; no dissenting or separate concurring opinion recorded.
Procedural Innovations
No new procedural innovations or guidelines were laid down in this decision.
Alert Indicators
- Precedent Followed – High Court affirms, applies, and reiterates the binding nature of Supreme Court precedent on the construction of Rule 8(6) and Rule 9(1) SARFAESI notice requirements.