IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY FIFTH 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 : 27047 of 2008 Between: 1 N.J.V. Subrahmanyeswara Rao, S/o. Veerabhadra Rao, Hindu, R/o. 2-8-3/1, Venkat nagar, Kakinada, East Godavari District. 2 Smt. Rachakonda Subhadra, W/o. Ganapathi, Hindu, D.No. 5-10-1, Bank Colony Street, Opp: Thakur Convent Eng. Medium School, Tuni, East Godavari District. ..... PETITIONER(S) AND 1 The Bank of India, Rep. by its Authorised Officer, Rajahmundry, East Godavari District. 2 The Bank of India, Rep. by its Branch Manager, Kakinada, East Godavari District. 3 The Bank of India, Rep. by its Branch Manager, Tuni, East Godavari 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 Writ of Mandamus or any appropriate Writ, Order or direction declaring the proposed action of the respondents in conducting public auction scheduled to be held on 18-12-2008 and 19-12-2008 so far the item Nos. 1 and 2 of Auctin Notification are concerned as published in Sakshi Telugu daily news paper dt. 19-11-2008, as illegal, arbitrary and violative of principles of natural justice and for a consequential order directing the not to put the properties shown in item No. 1 and 2 of the Auction Notification, dt. 19-11-2007 belonging to the petitioners herein, for sale, in public auction scheduled to be held on 18-12-2008 and 19-12- 2008, pending disposal of the Writ Petitioner and to pass Counsel for the Petitioner: MR.CH.DHANAMJAYA Counsel for the Respondents.: MR.K.PHANI KUMAR The Court made the following : THE HON’BLE SRI JUSTICE GHULAM MOHAMMED AND THE HON’BLE SRI JUSTICE VILAS V. AFZULPURKAR W.P.No. 27047 of 2008 ORDER: (Hon’ble Sri Justice Ghulam Mohammed) 1. This writ petition is filed challenging the proposed auction scheduled to be held on 18.12.2008 and 19.12.2008 in so far as it relates to the properties of the petitioners, published in Sakshi Telugu daily news paper, dated 19.11.2008 as illegal, arbitrary and violative of principles of natural justice. 2. According to the petitioners, the 1st petitioner is a borrower and the 2nd petitioner is a guarantor. The 1st petitioner borrowed a sum of Rs.18,40,000/- and Rs.9,00,000/- on 1.6.2007 with an interest @ 13.25% per annum from the respondent bank by mortgaging a house site measuring 503.10 sq. yards in S.No. 3/5 of Cheddiga at Kakinada Municipality. The 2nd petitioner who was the guarantor of the said loan offered her land measuring Ac.1- 03 situated in R.S.No. 301/2 situated at S. Annavaram of Tuni Municipality limits. Since the 1st petitioner committed defaults in payment of monthly instalments of the loan, he offered for one time settlement and intended to pay Rs.25,00,000/- as against Rs.31,00,000/-, but the respondent –bank refused to take that offer. Meanwhile, the mortgaged properties were proposed to be sold in public auction on 18.12.2008 and 19.12.2008. It is submitted that no notice has been served on any of the petitioners to enable them to put forth their objections to the proposed auction. It is also submitted the mortgaged property of the 2nd petitioner is agricultural property and it cannot be subjected to auction under Section 31 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short “the Act”). 1st respondent-bank has filed a counter-affidavit contending that the 1st petitioner is a borrower and the 2nd petitioner is a co-borrower. The mortgaged property belonging to the 2nd petitioner was sold to third parties after creating charge with he respondent-bank and the said property was also mortgaged with State Bank of India, Peddpuram Branch, East Godavari District. It is submitted that notices under Sections 13 (2) and (4) of the Act were issued and served on the petitioners on 14.6.2007 and the petitioners also acknowledged the receipt of the said notices. They have not submitted any replies to the said notices. The petitioners committed defaults in payment of monthly instalments and have not discharged the loan in spite of notices. Hence the mortgaged properties were proposed to be sold in public auction. This Court, on 11.12.2008, while issuing notice before admission to the respondents, granted interim stay of the public auction on condition that the petitioners deposit a sum of Rs.10,00,000/- within a period of four weeks. It is submitted by the learned Standing Counsel for the respondent-bank that the said conditional order was not complied with by the petitioners and they have not deposited the said amount even after six months have passed from the date of the said order. The petitioners approached this Court when the respondent-bank issued an auction notice on the ground that no notice was issued to them before the publication of the auction notice. But it is submitted by the learned Standing Counsel for the respondent bank that notices under Sections 13 (2) and (4) of the Act have been issued and served on the petitioners, and therefore the plea of the petitioners cannot be sustained. However, the petitioners can work out their remedies, if any, available to them in law. In view of these circumstances, we do not find any merit to entertain this writ petition and accordingly we dismiss the writ petition. No order as to costs. _____________________________ JUSTICE GHULAM MOHAMMED ________________________________ JUSTICE VILAS V. AFZULPURKAR Dt. 25.6.2009 KR ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1) 2 CD copies Form-NIC-OGS/WP{SPJS}