IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE THIRD DAY OF JULY TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE B.SESHASAYANA REDDY WRIT PETITION NO : 23229 of 2007 Between: Indla Subbarayudu, S/o Chinnaiah, Swamy Ayyappa Fruit Company, R/o 2/68-5, N.T.R.Nagar, Aravapalli, Nandalur Town and Mandal, Kadapa District. ..... PETITIONER AND 1 Andhra Pragathi Grameena Bank, represented byits Regional Manager, Kadapa Regional Office, Kadapa, Kadapa District. 2 The Branch Manager, Andhra Pragathi Grameena Bank, Nandalur Branch, Nandalur, Kadapa 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 particularly one in the nature of writ of mandamus declaring the action of the respondents particularly the 2nd respondent in imposing the condition of regularization of the liability under loan MPML No.1/2004 on the petitioner being a surety in his Ref.No.80/ODH3-05/NDL/07 dated 15-06-2007 for availing the sanctioned ODH Limit of Rs.4,00,000/- in the petitioner A/c.No.0DH3/05 as illegal, unjust, arbitrary, extraneous, unilateral, without basis or reason and against banking policy and regulations and consequently direct the 2nd respondent to delete the condition of regularizing the liability under loan No.MPML 1/4 on the petitioner being the surety in his Ref.No.80/ODH3-05/07 dated 15-06-2007 for availing the sanctioned ODH Limit upto Rs.4,00,000/- by the petitioner and pass such other order or orders as this Hon'ble Court may deem fit and proper in the circumstances of the case. Counsel for the Petitioner: MR.L.J.VEERA REDDY Counsel for the Respondent : MR.K.SRINIVASA MURTHY FOR RVAK-2 The Court made the following : O R D E R : 1. This writ petition has been filed by Indla Subbarayudu with a prayer to issue a Writ of Mandamus declaring the action of respondents in imposing a condition of regularization of liability under loan No.MPML No.1/2004 for availing sanction of ODH limit of Rs.4.00 lakhs as illegal and arbitrary. 2. The petitioner is a customer of Andhra Pragathi Grameena Bank, Nandalur Branch, Nandalur, Kadapa (2nd respondent). He has ODH limit of Rs.2.00 lakhs since 2005. He requested the Regional manager of Andhra Pragathi Grameena Bank-1st respondent for enhancement of ODH limit to Rs.4.00 lakhs. He mortgaged his house property worth Rs.20,00,000/- as a security for the overdraft facility. While so, the Branch Manager, Andhra Pragathi Grameena Bank, Nandalur Branch (2nd respondent) has put a condition of regularization of the account of M.Ramalakhsumma for whose liability he stood as a surety for availment of enhanced limit of ODH facility. Assailing the said condition, the petitioner chose to approach this court invoking the jurisdiction under Article 226 of the Constitution of India. 3. Rule nisi came to be ordered on 13.11.2007. Subsequently on 27.11.2007 interim direction as prayed for, subject to further orders, came to be issued in WPMP.NO.30267 of 2007. 4. Respondents entered appearance and filed vacate stay petition being WVMP.No.643 of 2008 to vacate the interim order granted on 27.11.2007. 5. When the vacate stay petition came up for consideration with the consent of counsel appearing for the parties, the writ petition itself is being taken up for final disposal. 6. Counter of respondents in brief is that the petitioner stood as a surety for MPML Loan No.1/2004 availed by his mother in law. The loan amount was Rs.1,30,000/-. His mother in law (M.Ramalakshumma) committed default in making payments of the said loan amount. An amount of Rs.46,261/- became overdue in the account of M.Ramalakshumma. The 2nd respondent demanded the petitioner and his mother in law- M.Ramalakshumma to regularize MPML Loan No.1/2004 by paying the overdue amount. The petitioner requested for enhancement of his ODH limit of Rs.2.00 lakhs to Rs.4.00 lakhs and promised to regularize the MPML Loan No.1/2004 of his mother-in-law- M.Ramalakshumma. Believing the promise of the petitioner 2nd respondent instructed the petitioner to regularize MPML Loan No.1/2004 availed by M.Ramalakshumma. Since M.Ramalakshumma committed default the petitioner being the surety is liable to make good the amount. The 2nd respondent issued notice to the petitioner on 25.1.2007 demanding to pay the overdue amount. Para 5 of the counter needs to be noted and it is thus: “ 5. The allegations in para 4 that the 2nd respondent Bank even without the sanction of the first respondent bank cannot impose such a harsh and irrational apart from illegal and coercive condition are all untenable. It is humbly submitted that the 2nd respondent bank made a sincere effort to get the loan account of Smt.Rama Lakshumma regularized by demanding payment of amount from out of the enhanced loan limit of the petitioner being duty bound to do so. As a branch Manager, it is the responsibility of the 2nd respondent to demand the surety as well as the borrower to regularize the over due amount and there is nothing irrational or illegal or coercive in making such demand. The other allegations that the demand by the 2nd respondent made to the petitioner to regularize the over due amount is untenable condition for extraneous reasons, is liable to be rejected out right in as much as there is nothing extraneous in making such demand and the 2nd respondent made the demand only to protect the interests of the bank.” 7. Heard learned counsel appearing for the petitioner and learned Standing Counsel appearing for the respondents. 8. Learned counsel appearing for the petitioner submits that putting the condition of clearance of the loan availed by M.Ramalakshumma while enhancing the ODH limit from Rs.2.00 lakhs to Rs.4.00 lakhs to the petitioner is wholly arbitrary. He further submits that there is no obligation on the part of the petitioner to regularize the account of his mother-in-law- M.Ramalakshumma before availing enhanced ODH limit of Rs.4.00 lakhs. 9. Learned Standing Counsel appearing for the respondents submits that the petitioner stood as a surety for the loan availed by M.Ramalakshumma who is no other than his mother-in-law and since the account of M.Ramalakshumma became overdue, a condition has been put to regularize the account of M.Ramalakshumma for allowing the petitioner to enhance his ODH facility to Rs.4.00 lakhs. For better appreciation I may refer the relevant portion of the letter addressed to the petitioner by 2nd respondent, which reads as under: “ As per your request letter dated 20.4.2007 along with application for enhancement of your existing (ODH 3/2005) ODH limit of Rs.2,00,000.00 to Rs.4,00,000.00, our Regional Office has sanctioned the said loan to you against the existing mortgage of house property standing in the name of Smt.I.Rukmini Devi and Sri.C.Lakshmi Narasaiah. You have promised to regularize your liability as a surety for the loan of your mother in law by name Smt. M.Ramalakshumma (MPML 1/2004) before availing the proposed loan. We have already informed you to regularize the said MPML 1/2004 and to avail the above sanctioned loan. Inspite of several intimations to you to avail the above sanctioned loan by regularizing the MPML 1/2004 you have not availed the said sanctioned loan. In this regard we inform you to avail the sanctioned loan by fulfilling all the terms and conditions of the Bank with regard to the above sanctioned loan immediately. In case you are not interested to avail the above said sanctioned loan, you are advised to close your existing ODH 3/2005 and also to regularize your liability as surety to MPML 1/2004 of Smt. M.Ramalakshumma immediately. Further you are advised to pay Rs.4,500.00 towards the service charges of sanctioned loan. Please treat the matter as urgent.” 10. Indisputably the petitioner stood as a surety to the loan availed by his mother-in-law( Smt. M.Ramalakshumma) and her loan account became overdue. Such is the situation, the condition imposed by 2nd respondent on the petitioner to regularize the account for which the petitioner stood as a surety as a condition precedent for availing enhanced ODH limit cannot be said to be illegal and arbitrary. 11. A Writ of Mandamus is a pre-emptory order of the Court commanding somebody to do that which he is under a clear legal duty to do. In order to obtain a writ or order in the nature of ‘mandamus’, the applicant must satisfy the following conditions: (1) The applicant must show that he has a legal right to the performance of a legal duty by the party against whom the Mandamus is sought and such right must be subsisting on the date of petition. (2) The duty that may be enjoined by Mandamus may be one imposed by the Constitution, a statute, common law or by rules or orders having the force of law. 12. The condition on the petitioner to clear the overdue in the account to which he stood as a surety before availment of enhanced ODH limit, in the given facts and circumstances, cannot be stated as arbitrary. There is no infraction of legal right of the petitioner. Therefore, this writ petition is devoid of merits and it is hereby dismissed. No costs. 3rd July 2008. (B.Seshasayana Reddy,J) tnb ASSISTANT REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies Form-NIC-OGS/WP{RS} THE HONOURABLE SRI JUSTICE B.SESHASYANA REDDY WRIT PETITION NO.23229 OF 2007 3RD JULY 2008.