IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE ELEVENTH DAY OF SEPTEMBER TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE B.SESHASAYANA REDDY WRIT PETITION NO : 734 of 2008 Between: Janjanam Bhavannarayan, S/o. Venkataswamy, R/o. Epurupalem, Chirala Mandal ..... PETITIONER AND 1 The Karur Vysya Bank Ltd. Divisional Office, Rep by its Division Manager, M.G. Road, Vijayawada. 2 The Branch Manager, Karuru Vysya Bank Ltd. Chirala Branch, Chirala, Prakasam District. 3 Kowtharapu Pattabhi Rama Rao, S/o. Ramadasu, R/o. Sivalayam, Temple Veedhi, Jandrapeta, Chirala Mandal, Prakasam District. .....RESPONDENT(S) 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 Writ of mandamus or any other writ, order or direction, directing the respondent bank to withdraw the proceedings initiated under 0SERFAESI Act 2002 by ﬁling an application for appointment of oﬃcial receiver in insolvency proceedings for recovery of the amounts and pass Counsel for the Petitioner:MRS.MADHAVI KAMBHAMPATI Counsel for the Respondent No.: . The Court made the following : THE HONOURABLE SRI JUSTICE B. SESHASAYANA REDDY WRIT PETITION NO. 734 OF 2008 ORDER: 1. This writ petition has been ﬁled by Janjanam Bhavannarayana assailing the action of Respondents No.1 and 2 in initiating proceedings under the provision of Securitiziation and Reconstruction of Financial Asset and Enforcement of Security Interest Act, 2002 (herein after referred as ‘ Securitization Act’ for brevity) 2. Kowtharapu Pattabhi Rama Rao-3rd respondent raised some loan from 2nd respondent Bank. Since 3rd respondent failed to liquidate the liability, the respondents 1 and 2 initiated proceedings under Securitization Act, 2002. The petitioner claims to be one of the creditors of 3rd respondent having lent a loan of Rs.1,30,000/-. 3rd respondent ﬁled I.P.No. 21 of 2007 to declare him as insolvent. The petitioner approached this Court questioning the actin of respondents 1 and 2 in invoking the provisions of Securitization Act. 3. Notice before admission came to be ordered on 21-1-2008 and interim stay came to be granted in W.P.M.P.No. 869 of 2008. The respondents entered appearance. 4. Sri K. V Subramanya Marusu received notice on behalf of the respondents No. 1 and 2. 5. Heard learned counsel appearing for the petitioner and learned counsel appearing for respondent 1 and 2. 6. Learned counsel for the petitioner submits that the petitioner is an unsecured creditor in the event of the properties of the 3rd respondent are sold by the Respondents 1 and 2., the petitioner may not be in a position to realize his debt. 7. Learned counsel for the respondents 1 and 2 submits that the respondents No.1 and 2 even secured creditor they stand out side the jurisdiction of Insolvency Court. 8. The petitioner claims to be unsecured creditor whereas respondent 1 and 2 are secured creditors. Respondents 1 and 2 are proceedings to sell the secured property by invoking provisions of Securitization Act. It is well settled law that secured creditors stand outside the purview of Insolvency Act. Section 28(6) of the Provincial Insolvency Act needs to be noted and it is thus. “Nothing in this section shall aﬀect the power of any secured creditor to realize or otherwise deal with his security in the same manner as he would have been entitled to realize or deal with if this Section had not been passed”. 9. The above referred provisions in the Insolvency Act protects the rights of the secured creditor. 10. Therefore, the petitioner cannot interdict the proceedings initiated by the respondents 1 and 2 for realization of secured debt by taking recourse to the provisions of the Securitization Act, 2002. 11. Accordingly, this writ petition is dismissed. No order as to costs. The interim stay granted on 21-1-2008 is stand vacated. ______________________________ Justice B. Seshasayana Reddy 11th September, 2008. Note: C.C. in a week B/o KM THE HONOURABLE SRI JUSTICE B. SESHASAYANA REDDY WRIT PETITION NO. 734 OF 2008 11th September, 2008.