IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY FIFTH DAY OF JUNE TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE N.V. RAMANA WRIT PETITION No.12443 of 2009 Between: The Andhra Pradesh State Cooperative Bank Ltd. Troop Bazar, Hyderabad Rep by its K. Nagamalleswara Rao, S/o. Gopaiah aged about 50 years, Hyderabad General Manager ..... PETITIONER AND 1 The Government of Andhra Pradesh Department of Co-operation, Secretariat, Hyderabad Rep by its Principal Secretary 2 Employees Provident Fund Organisation, O/o. the Recovery Officer, Regional Office, 3rd Lane, Krishna Nagar, Guntur - 522 006. 3 The Nannapaneni Venkatrao Cooperative Sugars Ltd. Jampani - 522 261, Vemur Mandal, Guntur 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 will be pleased to issue a writ, order or direction more particular one in the nature of mandamus to declare that the rights of the petitioner Bank over the Pledged Goods (Sugar Stocks), being a Pledgee of those goods, prevail over the provident Fund dues payable to the 2nd respondent Authority as the pledged goods are manufactured with the loan granted by the petitioner Bank to the 3rd respondent society and consequently to direct the 2nd respondent to remove the locks super imposed by him over the locks already imposed by the petitioner Bank in terms of Loan Agreement to the godown where the pledged goods are stored, being the pledgee of the goods, with immediate effect to enable the petitioner Bank to sell the goods pledged to it and to credit the net sale proceeds thereof to the loan account of the 3rd respondent Society and may pass Counsel for the Petitioner: MR.A.H.RAMA KRISHNA RAO (SC FOR APCOB) Counsel for the Respondent No.1: GP FOR COOPERATION Counsel for the Respondent No.2: MR.R.N.REDDY The Court made the following : ORDER: This writ petition is filed seeking a writ of mandamus to declare that the rights of the petitioner-bank over the Pledged Goods (Sugar Stocks), being a Pledgee of those goods, prevail over the Provident Fund dues payable to the second respondent- Employees Provident Fund Organisation as the pledged goods were manufactured with the loan granted by the petitioner-bank to the third respondent and consequently to direct the second respondent-Organisation to remove the locks super imposed by it over the locks already imposed by the petitioner-bank to the godown where the pledged goods are stored, being the pledgee of the goods in terms of the Loan Agreement, with immediate effect to enable the petitioner-bank to sell the goods pledged to it and to credit the net sale proceeds thereof to the loan account of the third respondent. It is the case of the petitioner-bank that the third respondent approached it and made an application dated 19.09.2008 requesting to sanction a cash credit/pledge limit of Rs.1000 lakhs. The petitioner-bank sanctioned the said facility of Rs.1000 lakhs to the third respondent subject to the terms and conditions mentioned in the Sanction Letter dated 25.10.2008 and the said limit is valid upto 30.09.2009. Pursuant to execution of loan and security documents and creation of charge by way of pledge on the sugar stocks by the third respondent in favour of the petitioner-bank, the limits sanctioned were made available to the third respondent and the third respondent utilized the amounts for its business. The sugar stocks pledged by the third respondent to the petitioner-bank were kept in two godowns under the custody, possession, lock and key of the petitioner-bank. While so, the second respondent- Employees Provident Fund Organisation sent a warrant of attachment of movable property dated 26.03.2009 to the Squad of Enforcement Officers, Guntur directing them to serve the same on the defaulter- third respondent, and on failure to pay a sum of Rs.51,80,797/- to attach the movable properties of the defaulter. Since the third respondent failed to pay the said amount, the sugar stocks in godown-II were attached by super imposing their locks on the locks of the two shutters on 28.03.2009. On coming to know that the third respondent had received a sum of Rs.20 lakhs from the Government of India towards buffer subsidy claim, the petitioner-bank addressed a letter dated 28.03.2009 to the third respondent advising it to remit the said amount towards Provident Fund dues without any deviation. Thereafter, the petitioner-bank also addressed two letters to the third respondent but there was no response from it. On securing a copy of the warrant of attachment of movable property dated 26.03.2009, the petitioner-bank addressed a letter dated 09.04.2009 to the second respondent-Organisation, inter alia stating that the third respondent had availed certain credit facilities from it on the pledge of sugar stocks which were kept in godowns under the custody, possession lock and key; that the total debt payable by the third respondent to the petitioner-bank is Rs.182.38 lakhs as on 28.03.2009; that the rights of the petitioner-bank, being a pledgeee, prevail over the rights of the second respondent; that in view of the super imposition of the locks by the second respondent on the locks of the petitioner-bank, the sugar stocks cannot be sold. According to the petitioner-bank, it has a first and exclusive charge on the sugar stocks pledged to it by the third respondent and that basing on those stocks only the petitioner- bank has sanctioned and granted certain credit limits to the society. In the warrant of attachment it is stated that the Provident Fund dues are for the period from 1/07 to 1/09 and the Provident Fund Authorities are also kept quite all these years and only when the sugar stocks are about to be sold as per the release orders of the Government of India, they have attached the sugar stocks and super imposed their locks on the locks of the petitioner-bank, which is untenable. Hence, this writ petition. Heard the learned counsel for the petitioner and the learned counsel for the respondents. From the facts, as stated above, it becomes clear that the right of the petitioner to claim the money, is based on the pledge of sugar stocks. If respondent No.3 has violated the terms and conditions of the pledge, then the petitioner is entitled to take steps to sell the pledged stocks as per the terms and conditions of the pledge. Though based on the pledged documents, the petitioner is entitled to sell the sugar stocks and appropriate the sale proceeds, the fact remains, to what extent and quantity, the petitioner is entitled to sell the stocks pledged and what amount is liable to be paid by respondent No.3 to respondent No.2, are disputed questions of fact, which this Court cannot go into in exercise of its jurisdiction under Article 226 of the Constitution of India. The remedy of the petitioner, if any, is to approach the competent civil Court and agitate its grievance. Hence, the writ petition is dismissed. The petitioner is at liberty to avail the remedies available to them under law on the basis of the pledged documents relating to the sugar stocks. No costs. N.V.RAMANA, J Date: 25.06.2009 va