IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE EIGHTEENTH DAY OF FEBRUARY TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE P.S.NARAYANA WRIT PETITION NO : 22901 of 2007 Between:
Jogi Dharma Rao S/o.Venkata Swamy R/o.Bupathivari Veedhi,Narsapur West Godavari District . PETITIONER AND The State Bank of Hyderabad, rep. by its Branch Manager Narsapur Branch, W.G.District . RESPONDENT Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a writ order or direction more particularly one in the nature of writ of mandamus declaring the impugned auction notice issued by the respondent bank under "SARFAESI ACT 2002'" in letter No.F/IDR/1-5 dated 29.9.2007 proposing to conduct sale of the secured property bearing House No.5-3-7/1 in Ward No.6 Jettivaristreet, Narsapur, W.G.District as illegal, arbitrary, and contrary to the Act and consequently set aside the same.
Counsel for the Petitioner: MR.K.CHIDAMBARAM Counsel for the Respondent: MR.K.V.SIMHADRI The Court made the following :
Form-NIC-OGS/WP{TRK} O R D E R:
This writ petition is filed seeking a mandamus to declare the auction notice dated 29.9.2007 issued by the respondent-bank under Securitisation & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for brevity “the Act”) proposing to conduct sale of the secured property i.e. House bearing No.5-3-7/1 in Ward No.6, Jettivari Street, Narsapur, West Godavari District, as arbitrary and illegal.
The case of the petitioner is that he is the borrower of loan from the respondent-bank, but he could not repay the entire loan amount, however he mortgaged his property i.e. House bearing No.5-3-7/1 situated at Ward No.6, Jettivaristreet, Narsapur which consists of a Ground floor + III building. As on the date, after the recent payment of Rs.1,25,000/- made by him in pursuance of the proposal for one time settlement, still a sum of Rs.4,36,017/- is due and payable. The respondent-bank got published an auction notice in West Godavari Edition of Eenadu Daily on 29.9.2007. The respondent sent the auction notice to the petitioner on 30.9.2007 through registered post with acknowledgement due for his information. The property in question, which was mortgaged, was put to auction on 31.10.2007. The petitioner asserts that the action of the respondent-bank in issuing the proposed auction notice for information and deciding to auction the secured property on 31.10.2007 is wholly illegal, arbitrary and contrary to the Act. Further, the respondent-bank decided to proceed with the enforcement of the secured interest under Section 13 of the Act. The respondent-bank has to follow due procedure laid down under Section 13 of the Act when they decided to proceed as contemplated under Section 13(1) of the Act. When the petitioner is under liability to the secured creditor, the bank under Section 13(2) of the Act may issue the borrower a notice in writing demanding him to discharge his liability within 16 days from the date of notice, and then only, in case of default, the respondent can proceed as contemplated under Sub-Section 4 of Section 13 of the Act. The respondent has not issued any notice in writing to the petitioner to enable him to discharge his liability in compliance of Section 13(2) of the Act and thereby the petitioner lost the opportunity to submit that the details and explanation under Section 13(3) of the Act. Therefore, the impugned auction-cum- sale publication is bad. Several further particulars and details had been narrated in paragraphs 6 and 7 of the affidavit.
Heard Sri K.Chidambaram, learned counsel for the petitioner, Sri K.V.Simhadri, learned counsel for the respondent-bank, and perused the material placed on record.
This Court, on 30.10.2007, while ordering Notice Before Admission, granted interim stay of all further proceedings including sale of the secured house property on condition that the petitioner deposits Rs.1,00,000/- (Rupees One Lakh Only) within a period of four weeks.
It is stated that the conditional order had been complied with. In the light of the facts and circumstances, and since the petitioner is having an alternative remedy, he may invoke such remedy for redressal of his grievance or make representation to the respondent-bank praying for time for discharging his entire liability. Except making this observation, no positive direction can be given in the writ petition.
Hence, the writ petition is dismissed. No costs.
18.02.2008 bcj