IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE TWENTY SECOND 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 : 27725 of 2007 Between: 1 G. Chandrasekhar Rao, S/o. Jeseph, R/o. 12-11-515, Ramireddi Thota, 3rd lane, Guntur, Guntur District. 2 N. Prasanna Kumari, W/o. G. Chandrasekhar, R/o. 12-11-515, Ramireddi Thota, 3rd lane, Guntur, Guntur District. ..... PETITIONER(S) AND The Branch Manager, H.D.F.C. Bank Ltd. Laxmipuram, Guntur, Guntur District. .....RESPONDENT 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 to issue any writ or order direction more particularly one in the nature of Writ of mandamus declaring the action of the respondent herein issuing aution notice dt. 19-11-2007 for sale of petitioners' house bearing H.No. 12-11-515 (new) D.No. 12-11-513 (old) in T.S. No. 36, Assessment No. 17170 situated at 7th Municipal Ward (new) 5th Ward (old) 3rd Lane Ramireddy Thota, Guntur admeasuring 73 1/2 sq. yds without giving notice under Sec. 8(1) of the Securitization Act as illegal, arbitrary null and void and for a consequently set aside the auction notice dt. 19-11-2007 which was scheduled to be held on 27- 12-2007 and to pass Counsel for the Petitioner:MR.K.SRINIVAS Counsel for the Respondent No.: MR.N.CHANDRADHAR RAO The Court made the following : THE HON'BLE MR JUSTICE GHULAM MOHAMMED and THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR W.P.No.27725 of 2007 ORDER: (Per Ghulam Mohammed, J) This writ petition is filed seeking a writ of Mandamus to declare the action of the respondent in issuing auction notice dated 19.11.2007 for sale of petitioners’ house property bearing No.12-11-515 (new) D.No.12-11-513 (old) in T.S.No.36, Assessment No.17170 situated at Remireddy Thota, Guntur admeasuring 73 ½ square yards without giving notice under Section 8(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ( for short ‘the Act’), as illegal and arbitrary. 2. The first petitioner has availed loan of Rs.2,00,000/- on 11-09-2003 after mortgaging the said property with the respondent and the second petitioner stood as a guarantor to the said loan. The respondent granted 180 monthly instalments to repay the said loan and the equal monthly instalment was fixed at Rs.2,089/- and granted time for 15 years to repay the loan amount. He paid 9 instalments to the credit of the loan account. The first petitioner is doing tailoring work and Television mechanism. While so, the respondent issued notice under Section 13(2) of the Act on 24.02.2007 calling him to repay Rs.2,59,911/- with contractual rate of interest due from 1.7.2006 and for taking possession of the mortgaged property. On 19.11.2007, the respondent issued a tender notification under the provisions of the Act for auction of the mortgaged property on 27.12.2007 at 11.30 a.m. The first petitioner made a representation to the respondent as well as to the District Collector, Guntur bringing the action of the respondent without giving any notice. He requested the District Collector to grant six months time to repay the amount due to the respondent. The respondent bank without passing any orders on his representation, straightaway issued auction notification dated 19.11.2007 fixing the date of sale on 27.12.2007. 3. The respondent bank filed a counter affidavit stating that the petitioners have wrongly made HDFC Bank Limited as respondent, but in fact, the Housing Development Financial Corporation Limited, Basheer Bagh, Hyderabad is the secured creditor. Apart from that, it is stated that a notice under Section 13(2) of the Act was issued on 24.2.2007 claiming an amount of Rs.2,59,911/- with interest from 1.7.2006. As the petitioners did not give any reply to the said notice, the corporation issued orders under Section 13 (4) of the Act. The petitioners without availing the alternative remedy under Section 17 of the Act by way of appeal before the Debt Recovery Tribunal against the orders under Section 13(4) of the Act, have filed this writ petition. It is also stated that since the petitioners committed default, the corporation has followed the procedure as contemplated under Section 14 of the Act to take possession of the mortgaged property. 4. The learned counsel for the petitioners contended that without following the procedure as contemplated under the provisions of the Act, the respondent corporation has directly issued the auction notification, which is not sustainable under law. 5. This court, in this writ petition, by order dated 26.12.2007 has directed the respondent corporation to hand over possession of the mortgaged property on condition of the petitioners depositing a sum of Rs.30,000/- within a period of four weeks and the same was complied with. Since the petitioners committed default in repaying the loan amount in instalments, the respondent corporation is entitled to recover the entire loan amount at once. But however, taking into facts and circumstances of the case, we deem it appropriate to permit the petitioners to make a representation to the respondent corporation so as to regularize the loan account. 6. Hence, the writ petition is disposed of. The petitioners are directed to make a representation to regularize the loan account, within a period of four weeks from the date of receipt of a copy of this order, and on such representation, the respondent corporation shall consider and pass appropriate order in accordance with law and communicate the order to the petitioners. Till such time, no coercive steps shall be taken. No costs. _____________________ GHULAM MOHAMMED,J _____________________ VILAS V. AFZULPURKAR 22-06-2009 Stp ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1) 2 CD copies Form-NIC-OGS/WP{RLD}