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the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘SARFAESI Act’).=The fact remains that the petitioner did not repay the outstanding dues of Rs.17.5 lakhs as on date and therefore, the impugned sale notices have been issued. Once the provisions of Section 13(4) of SARFAESI Act have been followed, the petitioner cannot find fault with the subsequent events, as it is for the petitioner to deliver possession or the only course open to the bank is to seek assistance from either the Chief Metropolitan Magistrate or District Magistrate. In the instant case, as the petitioner failed to deliver possession, the bank took possession of the property with the assistance of the District Collector by break opening the lock on 16.02.2009 under the cover of panchanama with regard to the inventory of immovable property, which also cannot be found fault with. – in view of the default, the respondent bank issued notice dated 08.09.2007, under Section 13(2) of the SARFAESI Act, which was acknowledged by the petitioner on 20.09.2007. It is stated that the petitioner did not give any explanation nor did he respond to the said notice and therefore, the possession notice dated 14.11.2008, under Section 13(4) read with Rule 8(1) was sent to the petitioner and he acknowledged the same on 20.11.2008. The possession notice dated 14.11.2008 was also published in Indian Express dated 25.12.2008. 4. The aforesaid averments have neither been contraverted nor the petitioner has filed any reply, therefore, it cannot be said that the procedure under Section 13 of SARFAESI Act has not been followed. Admittedly, the petitioner received Section 13(2) notice on 20.09.2007 and Section 13(4) notice was also received on 28.11.2008 but so far no action has been taken. If the procedure under Section 13 of SARFAESI Act is not followed, the course open to the petitioner is to approach the Debts Recovery Tribunal under Section 17 of the SARFAESI Act. As the procedure under Section 13 of SARFAESI Act has become final and as the petitioner neither paid the debt amount nor handed over the possession, the bank has to take recourse to Section 14 of SARFAESI Act. Under Section 14 of the SARFAESI Act it is open to the secured creditor to seek assistance of the Chief Metropolitan Magistrate or District Magistrate in taking possession of the secured asset. In the instant case, the District Collector being the District Magistrate his assistance was taken. Accordingly, the District Collector had passed orders dated 06.01.2009 and 19.01.2009 directing the SDPO, Amalapuram to provide necessary security while taking possession of the above said property.

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IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH 
AT HYDERABAD

(Special Original Jurisdiction)

TUESDAY, THE SEVENTEENTH DAY OF MARCH
TWO THOUSAND AND NINE

PRESENT

THE HON’BLE MR JUSTICE V.ESWARAIAH

AND 
THE HON’BLE MR JUSTICE VILAS V. AFZULPURKAR

WRIT PETITION No: 3786 of 2009

BETWEEN:

     Sagi Venkata Rama Gopala Krishnam Raju (Hindu) S/o. Narasimha

     Raju, R/o. Gogannamatham Village, Mamidikuduru Mandal, 
     E.G. District.

PETITIONER

AND

1    The Authorized Officer Andhra Bank, Zonal Office: Kakinada.
2    The Branch Manager, Andhra Bank, Razole, E.G. District.

…RESPONDENTS

Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court may be pleased to issue a writ of Mandamus or any other appropriate writ, order or direction declaring the notices dt.17-02-2009 issued by the 1st respondent under Sec.6 (2) / 8(6) of Security Interest (Enforcement) Rules 2002 as illegal, arbitrary, violative of principles of natural justice and contrary to law and consequently to set aside the same.

Counsel for the Petitioner: MR.K.CHIDAMBARAM

Counsel for the Respondents: DR.K.LAKSHMI NARASIMHA

The Court made the following:

ORDER: (per Hon’ble Sri Justice V. Eswaraiah)

          Petitioner questions the notices dated 17.02.2009, one notice relates to the sale of house property bearing D.No.1-120 situated in an extent of 5 cents in Sy.No.117/3A and the other notice relates to the open plot of 24 ½ cents in Sy.No.117/3A, both situated in Gogannamatham Village, Mamidikuduru Mandal, East Godavari District, by way of public auction on 30.03.2009. The aforesaid notices were issued under Rule 6(2)/8(6) of the Security Interest (Enforcement) Rules, 2002 made under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘SARFAESI Act’).

2.       The undisputed facts are that the petitioner is the principal borrower, who has been sanctioned a term loan of Rs.5,00,000/- and working capital limit of Rs.4,00,000/- for the proposed rice mill on the mortgage of 49 ½ cents of land situated in Sy.Nos.117/3A, 117/3B and 117/3A of Gogannamatham Village, Mamikuduru Mandal, East Godavari District. The petitioner has taken another loan of Rs.2,00,000/- for construction of house on 04.09.2004 and for the above said loans, Smt. K. Venkatasatyavathi and Sri Saagi Veeravenkta Satya Saibaba Verma stood as co-obligants cum guarantors. The petitioner defaulted in payments since 2006 and 
in spite of issuance of notices requesting him to pay the installments, he did not pay the loan amounts and therefore, his account was declared as Non Performing Asset (NPA).

3.       In the counter affidavit it is stated that in view of the default, the respondent bank issued notice dated 08.09.2007, under Section 13(2) of the SARFAESI Act, which was acknowledged by the petitioner on 20.09.2007. It is stated that the petitioner did not give any explanation nor did he respond to the said notice and therefore, the possession notice dated 14.11.2008, under Section 13(4) read with Rule 8(1) was sent to the petitioner and he acknowledged the same on 20.11.2008. The possession notice dated 14.11.2008 was also published in Indian Express dated 25.12.2008.

4.       The aforesaid averments have neither been contraverted nor the petitioner has filed any reply, therefore, it cannot be said that the procedure under Section 13 of SARFAESI Act has not been followed.  Admittedly, the petitioner received Section 13(2) notice on 20.09.2007 and Section 13(4) notice was also received on 28.11.2008 but so far no action has been taken. If the procedure under Section 13 of SARFAESI Act is not followed, the course open to the petitioner is to approach the Debts Recovery Tribunal under Section 17 of the SARFAESI Act.  As the procedure under Section 13 of SARFAESI Act has become final and as the petitioner neither paid the debt amount nor handed over the possession, the bank has to take recourse to Section 14 of SARFAESI Act.  Under Section 14 of the SARFAESI Act it is open to the secured creditor to seek assistance of the Chief Metropolitan Magistrate or District Magistrate in taking possession of the secured asset. In the instant case, the District Collector being the District Magistrate his assistance was taken. Accordingly, the District Collector had passed orders dated 06.01.2009 and 19.01.2009 directing the SDPO, Amalapuram to provide necessary security while taking possession of the above said property. 

5.       In the counter it is further stated that after receipt of the aforesaid orders, the petitioner had made a request to the Tahsildar, Mamidikuru vide his letter dated 10.02.2009 seeking some more time for repayment of the aforesaid loan. 

6.       The bank had taken possession of the aforesaid property on 16.02.2009.  Merely because the petitioner requested time, we are of the opinion that the Tahsildar has no power or authority to grant any time for repayment of the loan.  Had the petitioner been sincere in repayment of loan, he could have approached the bank itself seeking time for repayment of loan. The fact remains that the petitioner did not repay the outstanding dues of Rs.17.5 lakhs as on date and therefore, the impugned sale notices have been issued. Once the provisions of Section 13(4) of SARFAESI Act have been followed, 
the petitioner cannot find fault with the subsequent events, as it is for the petitioner to deliver possession or the only course open to the bank is to seek assistance from either the Chief Metropolitan Magistrate or District Magistrate.  In the instant case, as the petitioner failed to deliver possession, the bank took possession of the property with the assistance of the District Collector by break opening the lock on 16.02.2009 under the cover of panchanama with regard to the inventory of immovable property, which also cannot be found fault with. 

7.       What is questioned in the writ petition is only the sale notices.  The sale notices being consequential notices issued in accordance with the Rules, We are of the opinion that the petitioner is not entitled to any relief in the writ petition.  However, while issuing Notice before Admission as the petitioner offered to pay the amounts, this Court made an order for payment of Rs.2.5 Lakhs within two weeks and another sum of Rs.5.00 lakhs within eight weeks thereafter, but the petitioner did not pay Rs.2.5 Lakhs within the stipulated time, therefore, the conditional order also has not been complied with. 

8.       The respondent bank has filed an additional affidavit stating that the petitioner has taken back possession forcibly from the custody of the bank. It is stated that the bank made a complaint against the petitioner and a criminal case has also been registered against the petitioner. The respondent bank, therefore, seeks necessary orders permitting the bank to take possession of the property. As we are inclined to dismiss the writ petition, the legal position is that it is always open to the bank to take possession of the property and proceed further with the sale of the property pursuant to the impugned notices.  However, insofar as the criminal case is concerned it is open for the respective parties to pursue the same.  In view of the aforesaid facts and circumstances of the case, we do not see any merits in the writ petition and it deserves to be dismissed.

          The writ petition is accordingly dismissed.  There shall be no order as to costs.

______________

V. ESWARAIAH, J

_____________________

VILAS V. AFZULPURKAR, J

March 17, 2009

DSK

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