IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE EIGHTEENTH DAY OF JUNE TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE GHULAM MOHAMMED and THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT PETITION NO : 27912 of 2007 Between: V. Srikantha Rao S/o v.v. Narsimha Rao R/o H. No. 2-9-93, Mukarampura, Karimnagar-505 001. ..... PETITIONER AND 1 State Bank of Hyderabad, rep by its Dy. General Manager, Regional Office, Karimnagar District. 2 The Chief General Manager-cum-Authorized Office, State Bank of Hyderabad, Regional Office-IV, Karimngar District. 3 State Bank of Hyderabad repby Branch Manager, Court Complex, Branch, Karimnagar 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 any Writ, order or direction more particularly one in the nature of writ of Mandamus declaring the demand notice dated 18-10- 2007 under section 13 (2) of Security Interest Act, 2002 as arbitrary, illegal, void and consequently set a side the same and pass such other relief or reliefs as this Honourable Court may deem fit and proper inthe circumstances of the case. Counsel for the Petitioner:DR.P.B.VIJAY KUMAR Counsel for the Respondent No.: MR.CH.SIVA REDDY The Court made the following : ORDER: (Per Sri Justice GHULAM MOHAMMED) This Writ Petition has been filed seeking Writ of Mandamus declaring the action of the respondents in issuing demand notice dated 18.10.2007 under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (for short ‘SRFAESI Act’) as illegal and arbitrary and consequently to set aside the same. The petitioner availed credit facility for a sum of Rs. 2,00,000/- on 31.10.2005 from the State Bank of Hyderabad –third respondent herein by mortgaging the house property bearing H.No. 2-9- 43, Mukarampura, Karimnagar District. As the petitioner could not repay the loan amount and fell in arrears, the first respondent-Bank issued demand notice dated 18.10.2007 under Section 13(2) of SARFAESI Act demanding for repayment of outstanding loan amount within sixty days from the date of receipt of said notice. In pursuance thereof, the petitioner filed a representation dated 1.11.2007 requesting the respondents to grant some time and also to reschedule the instalment period enabling him to pay the entire amount. It is stated that on receipt of his representation the second respondent advised him vide letter dated 10.11.2007 to pay the amount of Rs. 1,00,077/- on 31.10.2007. On such letter the petitioner again made a representation dated 18.12.2007 to grant 60 days time for payment of Rs. 1,00,077/- due as on 31.10.2007 and also to permit him to pay remaining amount in monthly instalments. The petitioner states that if the respondent is not restrained by this Court further steps will be taken under provisions of SRFAESI Act and hence the above Writ Petition is filed. In the counter affidavit filed by the respondents, it is stated that the respondent-Bank has sanctioned mortgage loan facility to the tune of Rs. 2,00,000/- on 31.10.2005 to the petitioner. As the petitioner failed to repay the amount due to the Bank, the account of the petitioner was classified as non-performing asset and the Bank proceeded under the SARFAESI Act (Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the Act’) by issuing notice under Section 13(2) of the Act demanding the amount of Rs. 2,22,107/- due as on 30.11.2006 within 60 days from the date of receipt of the said notice. As he failed to repay the amount and has also not regularized the account by paying out of order amount of Rs. 1,00,077/- for considering his case for payment of the amount in monthly instalments, the Bank issued possession notice dated 18.10.2007 under the said Act. As the petitioner failed to pay the amount due, the respondent-Bank issued demand notice dated 18.10.2007. Aggrieved by the same, the petitioner filed the Writ Petition challenging the demand notice dated 18.10.2007. This Court, while ordering notice before admission on 27.12.2007 granted interim stay of all further proceedings subsequent to the issuance of demand notice dated 18.10.2007 on condition of the petitioner depositing Rs. 25,000/-, within six weeks. It is stated that the petitioner has complied with the said conditional order. Be that as it may, the petitioner has not responded to the reply given by the respondents under Section 13 (3A) of the Act to regularize the Account by paying out of order amount of Rs. 1,00,077/- and apart from that the petitioner has an effective alternative remedy of appeal under Section 17 of the Act. Hence, we do not see any reason to interfere with the order impugned in this Writ Petition under Article 226 of the Constitution of India. Accordingly, the Writ Petition is dismissed. However, in the circumstances of the case and also in view of long lapse of time, we also direct the petitioner to make a representation to the respondent-Bank within two weeks from today and on such representation, the respondent- Bank shall consider and dispose of the representation made by the petitioner before taking any final decision. There shall be no order as to costs. _____________________________ GHULAM MOHAMMED, J ______________________________ VILAS V. AFZULPURKAR,J Dt. 18.06.2009 KA ..... 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