IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD PRESENT : : THE HON’BLE SRI JUSTICE N.V.RAMANA AND THE HON’BLE SRI JUSTICE P. DURGA PRASAD W.P.No.27162 of 2011 Dated:13-10-2011 Between: Shaik John Saheb ….Petitioner. And The Branch Manager, Deutsche Post Bank, Lakdikapool, Hyderabad. ….Respondent. The Court made the following: THE HON’BLE SRI JUSTICE N.V.RAMANA AND THE HON’BLE SRI JUSTICE P. DURGA PRASAD W.P.No.27162 of 2011 ORDER: (per the Hon’ble Sri Justice P.Durga Prasad) This Writ Petition is filed for issuance of writ of Mandamus declaring the action of the respondent is highly arbitrary, illegal, unjust and against the principles of natural justice and Articles 14 and 21 of the Constitution of India and consequently restraining the respondent to dispossess the petitioner from the house bearing Flat No.102, 1st floor, Gayathri Vihar, H.No.8-20/2 in Sy.No.263 and 264 situated at Gowtham Nagar Colony, Gaddiannaram village, Saroornagar Mandal, Hyderabad, Ranga Reddy District, as per the proceedings issued under Section 14 (1 & 2) of the SARFAESI Act in Crl.M.P.No.913 of 2011 on the file of Chief Metropolitan Magistrate, Cyderabad, Ranga Reddy District. According to the writ petitioner, he has taken a housing loan of Rs.27,00,000/- from the respondent bank in the year 2010 January for the purchase of a Flat No.102, 1st Floor, Gayathri Vihar, H.No.8-20/2 in Sy.No.263 and 264 situated at Gowtham Nagar Colony, Gaddiannaram Village, Saroornagar Mandal, Hyderabad, Ranga Reddy District. As per the sanction Order, the said amount has to be repaid in equal monthly installments of Rs.32,000/- per month. The writ petitioner paid 3 to 4 installments and thereafter committed default in paying monthly installments. According to the petitioner, due to children’s education, old age parents medical expenses and maintenance of family, the petitioner could not pay the installments regularly and committed default. After sometime, the petitioner went to respondent bank and requested them to regularize the House Loan Account, but the respondent bank refused the request of the petitioner and informed that they are proceeding under SARFAESI Act. He further pleaded that the respondent bank declared the housing loan of the petitioner as NPA by violating the RBI guidelines. According to the petitioner, the respondent bank has not followed the procedure prescribed under SARFAESI Act and the respondent bank instead of realizing the defaulted installments from the petitioner, trying to sell away the property of the petitioner by ignoring the principles of natural justice and RBI guidelines. He further pleaded that the respondent bank has filed a petition in Crl.M.P.No.913 of 2011 on the file of Chief Metropolitan Magistrate, Cyderabad, Ranga Reddy District to dispossess the petitioner from the house to take physical possession of the same and conduct auction of the property and the Chief Metropolitan Magistrate, has appointed the Advocate-commissioner and posted the matter to 29.11.2011 for execution of warrant and its report. The respondent bank after taking the said Order is trying to dispossess the petitioner from the house. He further pleaded that the action of the respondent bank is illegal, arbitrary and in violation of Principles of natural justice. Hence, the writ petition. Heard, the learned counsel for the writ petitioner. The writ petitioner’s counsel has pleaded that the declaring of the account of the petitioner as NPA is against the RBI guidelines. He further pleaded that the respondent bank has not followed the procedure prescribed under the SARFAESI Act for taking possession of the said property and thereby the said Order for taking possession of the property is liable to be set aside. The writ petitioner admitted about the taking of housing loan from the respondent bank and also committing default of payment of installments after making payment of 3 to 4 installments only. Admittedly, the respondent bank has initiated proceedings under SARFAESI Act and also filed a petition under Section 14 (1 & 2) of the said Act for taking possession of the property before the Chief Metropolitan Magistrate, Cyderabad in Crl.M.P.No.913 of 2011 and the same was ordered and the Advocate-commissioner was appointed to take possession of the property. In the affidavit filed in support of the writ petition, the petitioner has narrated the procedure to be followed by the respondent bank under SARFAESI Act and also the remedies available to him for violation of the provisions by the respondent bank. As per the averments made in the affidavit of the writ petition after declaring the account as NPA, the bank will issue notice under Section 13 (2) of the Act. According to him, normally borrowers may choose to remain silent after receiving a demand notice under Section 13 (2), though, they can send their objections to the bank. But, he has not specified whether he has received any notice under Section 13 (2) of the Act or whether he has sent any objections to the said notice. He also pleaded that the borrower has got a right to file an appeal under Section 17 of the Act for violation of the provisions of Section 13 of the Act. The writ petitioner’s counsel could not point out which of the guidelines of RBI, were violated by the respondent bank in declaring the loan account of the petitioner as NPA, when admittedly the petitioner has committed default in making the payments of installments. The petitioner’s counsel also could not point out the violation of provisions of Section 13 of the Act. It is the case of the petitioner that the bank can proceed to take physical possession of the property under Section 14 of the Act through District Magistrate or Chief Metropolitan Magistrate. Before the Magistrate under Section 14 of the Act, there will not be any kind of adjudication and notice need not be given to the borrower at this stage. The Magistrate is required to look at the statutory compliance of Section 13 of the Act and if he is satisfied, he will assist the bank in taking physical possession of the property. Therefore, according to the petitioner, after satisfying with the statutory compliance of Section 13, the Magistrate issue Orders for taking possession of the property. In the present case, admittedly the respondent bank has filed a petition in Crl.M.P.No.913 of 2011 for delivery of possession of the property, which is a secured asset. The writ petitioner has pleaded in the affidavit filed in support of the petition that alternative remedies are provided under Section 17 of the Act for violation of the provisions of Sections 13 and 14 of the Act and now he is questioning the proceedings initiated under Section 14 of the Act in Crl.M.P.No.913 of 2011. The Supreme Court in “UNITED BANK OF INDIA V. SATYAWATI TONDON AND OTHERS[1]” has observed that for any tangible grievance against the notice under Section 13 (4) or taking action under Section 14, the aggrieved person has got a remedy under Section 17 (1) of the Act and both the Tribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matter within a fixed time schedule and the remedies available to an aggrieved person under the Act are both expeditious and effective. The Apex Court further observed that the High Court must keep in mind that the legislations enacted by the Parliament and State Legislatures for recovery of such dues are code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. Therefore, the writ petitioner has got effective and alternative remedy under Section 17 of the Act. Therefore, we are not inclined to interfere with the impugned Order passed under Section 14 of the Act. As per the averments made in the writ petition, the petitioner wants for regularization of his loan account and to permit him to pay the future installments. For such relief the petitioner has to approach the Bank by way of representation and the same cannot be granted by this Court in the present proceedings. The petitioner having obtained loan and committed default in paying monthly installments, the respondent bank is at liberty to proceed against the secured asset of the petitioner for realization of the loan amount and in the absence of violation of any statutory provisions by the respondent bank, the petitioner is not entitled for any relief as prayed for. In the result, the writ petition is dismissed at the admission stage. However, the writ petitioner is permitted to make a representation to the bank for regularization of his loan account immediately and if the writ petitioner makes any such representation, the respondent bank is directed to dispose of the same before proceeding against the secured asset of the petitioner. There shall be no Order as to costs. _______________________ JUSTICE N.V.RAMANA. _____________________________ JUSTICE P. DURGA PRASAD Dated:13-10-2011 Ksp [1] AIR 2010 Supreme Court 3413