HON’BLE SHRI G.S.SINGHVI, THE CHIEF JUSTICE AND HON’BLE SHRI JUSTICE G.V.SEETHAPATHY WRIT APPEAL NO.701OF 2006 Between: M/s.UCO Bank . . .Appellant AND M.Ashok Kumar and others ..Respondents Counsel for the appellant : Shri Ravinuthala V.S.R. Counsel for the respondents1& 2 : Shri V.Venkata Ramana Counsel for the respondents 3 & 4 : None Dated: 22nd June, 2006 : ORDER : PER G.S.SINGHVI, CJ Feeling aggrieved by the interlocutory order passed by the learned Single Judge in W.P.M.P.No.9976 OF 2006 (W.P.No.7789 of 2006) whereby she restrained the appellant from dispossessing the writ petitioners (respondent Nos. 1 and 2 herein) from premises bearing No.8/2/618/M, Road No.11, Banjara Hills, Hyderabad, the appellant has preferred this appeal under Clause 15 of the Letters Patent. We have heard learned counsel for the appellant, Shri V.Venkata Ramana, learned counsel for respondent Nos.1 and 2 and perused the record. Respondent Nos.1 and 2 stood as guarantors in respect of credit facility granted by the appellant bank to M/s Megabowl Pvt. Ltd. (respondent No.4 herein). They also created equitable mortgage in favour of the bank in respect of house property in question. All this happened in the year 2001. After about one year and seven months, the bank invoked the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the Act’) and issued notice under Section 13(2) requiring respondent Nos.1 and 2 to pay a sum of Rs.1.5 crores with interest and costs. Respondent Nos.1 and 2 challenged the same by filing suit in the Civil Court of XII Additional Chief Judge, City Civil Court, Hyderabad. They prayed for grant of a declaration that they stood discharged as sureties and, therefore, the bank does not have the power to take action for recovery of the amount due from respondent No.4. The suit filed by them was registered as O.S.No.225 of 2003 and was decreed on 03.04.2006. After three days, the appellant bank filed Crl.M.P.No.1751 of 2006 in the Court of Chief Metropolitan Magistrate, Hyderabad under Section 14 of the Act for taking possession of the property in question. On that very day, the Chief Metropolitan Magistrate passed order and appointed an Advocate-Commissioner to take possession of the house property. Respondent Nos.1 and 2 resisted the action of the Advocate- Commissioner to take possession of the property. They also filed Crl.M.P.No.1806 of 2006 in the Court of the Chief Metropolitan Magistrate claiming therein that in view of decree dated 03.04.2006 passed by XII Additional Chief Judge, City Civil Court they cannot be deprived of their house property on the basis of order passed under section 14 of the Act. They also filed I.A.No.366 of 2006 under Order XXXIX Rule 2 of the Code of Civil Procedure for protecting their possession. By an order dated 17.04.2006, the Civil Court passed an order against their dispossession. Thereafter, respondent Nos.1 and 2 filed writ petition under Article 226 of the Constitution for quashing order dated 06.04.2006 passed by the Chief Metropolitan Magistrate in Crl.M.P.No.1751 of 2006. After considering the pleadings of the parties and hearing their advocates, the learned Single Judge passed order dated 13.06.2006, the relevant portions of which are extracted below: “ Heard the learned Counsel for both the parties and perused the counter affidavit filed on behalf of the first respondent-Bank. Admittedly, O.S.No.225 of 2003 filed by the petitioners herein seeking a declaration that they are discharged as sureties under the loan sanctioned by the first respondent-Bank and also seeking a mandatory injunction directing the first respondent-Bank to release the title deeds deposited by them was decreed on contest by the first respondent on 03.04.2006. It is also not in dispute that the suit was filed prior to the initiation of the proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 which culminated in the impugned order dated 06.04.2006 passed by the second respondent in Crl.M.P.No.1751 of 2006. Keeping in view that the decree granted in O.S.No.225 of 2003 is subsisting as on today, prima facie, I am of the opinion that the order passed by the second respondent in Crl.M.P.No.1751 of 2006, dated 06.04.2006 cannot be given effect to. Accordingly, there shall be interim stay as prayed for.” Learned counsel for the appellant pointed out that after passing of the decree by XII Additional Chief Judge, City Civil Court, Hyderabad, the writ petitioners (respondent Nos.1 and 2 herein) had offered to compromise the matter. He then argued that the learned Single Judge could not have passed stay order ignoring the offer of compromise made by respondent Nos.1 and 2. In our opinion, there is no merit in the submission of the learned counsel. Admittedly, the decree passed by the Civil Court in O.S.No.225 of 2003 filed by respondent Nos.1 and 2 has neither been stayed nor superseded by any superior Court. Therefore, the appellant bank was not justified in making an attempt to circumvent the decree of the competent Court and the learned Chief Metropolitan Magistrate was not justified in passing order for appointment of Advocate- Commissioner in terms of Section 14 of the Act. The learned Single Judge, in our considered view, rightly stayed the dispossession of respondent Nos.1 and 2 else miscarriage of justice would have been occasioned. With the above observations, the appeal is dismissed. However, it is made clear that the order passed by the learned Single Judge and this order shall not preclude the appellant bank from challenging the judgment and decree passed by the Civil Court in O.S.No.225 of 2003. If the Appellate Court suspends the decree passed by the lower Court or the same is reversed, then the bank shall be free to file an application before the learned Single Judge for vacating or modification of the interim order. G.S.SINGHVI, CJ G.V.SEETHAPATHY, J Date: 22.06.2006 kvni/ksld