A three-judge bench of the Supreme Court, in S. Karthik & Ors. v. N. Subhash Chand Jain & Ors.(“S. Karthik”), recently relaxed the mandatory pre-requisites prescribed for sale of mortgaged assets under the Security Interest (Enforcement) Rules, 2002 (“The SI Rules”), under certain circumstances. It was held that when a sale notice under the SI Rules does not result in a sale due to reasons entirely attributable to the borrower, then the lender need not wait another 30 days before selling the mortgaged assets through a subsequent sale notice. This decision assumes significance as it is indicative of a lender friendly approach in monetising their security interests by adopting a flexible standard in interpreting the procedural prerequisites, rather than reading them pedantically. This blog examines the judgement in detail.
Continue Reading “Duly Noted”: Notice period for subsequent sale notice under Rule 8 and 9 of the Security Interest (Enforcement) Rules, 2002 relaxed by the Supreme Court