THE HON’BLE SRI JUSTICE P.S. NARAYANA WRIT PETITION No.10595 of 2007 Dated: 12.02.2008 Between K.V.V.L.Satyanarayana …Petitioner And Punjab National Bank, Rep. by its Authorised Officer, Zonal Office, at 6-1-73, Saeed Plaza, Lakdikapul, Hyderabad …Respondent THE HON’BLE SRI JUSTICE P.S. NARAYANA WRIT PETITION No.10595 of 2007 ORDER: Heard Sri B.Chandrasekhar, learned counsel representing the writ petitioner and Sri Ambadipudi Satyanarayana, learned counsel representing the respondent bank. 2. This Court ordered notice before admission on 16.05.2007 and granted stay of further proceedings pursuant to the impugned order subject to condition of the writ petitioner depositing Rs.60,000/- within six weeks. 3. It is stated that the said conditional order had been complied with. 4 . The writ petition is filed for issuance of writ of mandamus declaring the impugned proclamation of sale notice issued vide Lr.Ref:ZOH:SAMD:Sec-302, dated 20.04.2007, proposing to conduct auction of the house plots bearing Nos.23 and 24 admeasuring 267 square yards each situated in Survey No.194 of Hayathnagar Village and Mandal, Ranga Reddy District, on 28.05.2007, as illegal and arbitrary, and consequently to set aside the same and to pass such other suitable orders. 5. It is stated that the respondent bank sanctioned a term loan of Rs.60,000/- in favour of M/s.Bharathi Computer Services, Gaddiannaram, Dilsukhnagar, Hyderabad, during the year 1986 and the petitioner stood as guarantor to the said loan and deposited the title deeds pertaining to his house plots bearing Nos.23 and 24 admeasuring 267 square yards each situated in Survey No.194, Hayathnagar Village and Mandal, Ranga Reddy District, as collateral security and the respondent bank had created equitable mortgage of the above said plots. 6. It is also stated that thereafter the petitioner was informed by the principal borrower i.e., K.Shivaji Ganesh, Proprietor of M/s.Bharathi Computer Services that he has been paying the loan amount regularly and the petitioner was under the bona fide impression that the entire loan has been cleared off. While the matter stood thus, to his utter surprise and dismay, the respondent bank got issued a notice on 30.10.2006 stating that the principal borrower committed default in paying the loan amount and demanded him to pay an amount of Rs.3,80,520.41 ps. within 60 days of receipt of the said notice, otherwise his house plots will be put to auction to recover the outstanding loan amount. Soon after receipt of the said notice, the petitioner approached the respondent bank and brought to their notice that the principal borrower informed him that he has been paying the loan amount and he was under the impression that the principal borrower might have cleared the entire loan amount. If at all the principal borrower had committed any default, the respondent bank ought to have issued a notice to him informing about the default committed by the principal borrower immediately, but no notice whatsoever had been issued to him at any point of time. But after a lapse of more than 20 years, the respondent got issued the above said notice bringing to his notice that the principal borrower had committed default and an amount of Rs.3,80,520.41 ps. is due to be paid by him as on 30.10.2006. The authorities of the respondent bank had kept quite for a period of more than 20 years without making any effort to recover the outstanding loan amount from the principal borrower, and now issued the notice demanding him to pay the outstanding loan amount, which is wholly illegal and contrary to law. He further requested the respondent bank to recover the outstanding loan amount from the principal borrower. 7. It is further stated that the respondent bank, which is well aware of the whereabouts of the principal borrower, with a mala fide intention to knock away the house plots of the petitioner at a very meager amount, got issued the sale notice on 20.04.2007 vide Ref:ZOH:SAMD:Sec-302 duly enclosing a copy of proclamation of sale proposing to conduct the auction of house plots on 28.05.2007 at 11.00 a.m. A perusal of the proclamation of sale clearly shows the mala fide intention of the respondent bank, as the respondent bank had mentioned the outstanding amount in the sale notice as Rs.3,80,520.51 ps in respect of each plot, the total of which comes to around Rs.7,60,000/-, but in the notice dated 30.10.2006 it was clearly admitted by the respondent bank that an amount of Rs.3,80,520.51 ps. is outstanding as on 30.09.2006. In such circumstances, the writ petitioner approached this Court. 8. W.V.M.P.No.1704 of 2007 is filed to vacate the interim order, dated 16.05.2007. 9. In the counter-affidavit filed on behalf of the respondent bank several allegations made in the affidavit field in support of the writ petition had been denied. 10. In paragraph No.5 of the counter-affidavit, it is averred that it is false to contend that the petitioner is not aware of any of the subsequent developments from the date of sanction of the loan and no notice whatsoever had been issued to him at any point of time. It is stated that the respondent bank had filed a suit in O.S.No.730 of 1992 on the file of the II Additional Subordinate Judge’s Court, Ranga Reddy District against the principal borrower and also the writ petitioner. The petitioner remained ex parte to the said suit along with other defendants and that a preliminary decree was passed in favour of the bank on 29.08.1996 and a final decree was passed on 12.06.2000. In both the proceedings, the petitioner remained ex parte. Thereafter, the respondent bank filed E.P.No.18 of 2003 and the same is pending. While the matter stood thus, the respondent bank had invoked the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the Act’) and issued Demand Notice under Section 13(2) of the Act. As such, there is no irregularity or illegality committed by the bank. On the other hand, the petitioner is guilty of suppression of all these proceedings and made false allegations. All the allegations contra are denied as they are invented by the petitioner for the purpose of the writ petition. 11. It is also stated that the said property was brought for sale as per the provisions of the Act, as it is a security to the debt. As such it is not a bar to the secured creditor to proceed against the secured asset without proceeding against the principal borrower. The petitioner was served with 13(2) Demand Notice dated 30.10.2006. The petitioner having received the said notice remained silent. Thereafter, the respondent bank had issued Rule 9 Possession Notice dated 11.04.2007 and got the same published in two newspapers namely Financial Express & Praja Shakthi on 15.04.2007. Even after publication of the said notices, there was no response from the petitioner, and therefore, the respondent bank had proceeded with proclamation of sale on issuing a sale notice to the petitioner on 20.04.2007. As such, the proceedings of the respondent bank are strictly as per the procedure prescribed under the Act and that the petitioner has no right to question the same as no irregularities were committed. 12. It is further stated that the petitioner had deposited Rs.60,000/- as directed by this Court. 13. These are the respective stands taken by the parties. 14. In the present writ petition, no further positive directions, as such, can be granted. But, however, since it is stated that the amount of Rs.60,000/-, as directed by this Court, already had been deposited, let the petitioner make a representation to the respondent bank to consider his case, and let the respondent bank consider the same in accordance with law. The petitioner is also given liberty to invoke the other legal remedies available to him in accordance with law. 15. Subject to the above observations, the writ petition is dismissed. There shall be no order as to costs. _________________ P.S.Narayana, J Date: 12.02.2008 va