IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE TENTH DAY OF JULY TWO THOUSAND AND NINE PRESENT THE HON'BLE SRI JUSTICE GHULAM MOHAMMED and THE HON'BLE SRI JUSTICE VILAS V. AFZULPURKAR WRIT PETITION NO : 26201 of 2007 Between: K. Varamuni S/o.K. Venkata Swamy Reddy R/o. 1-5-54, G3, Uma Apartments, Balajia Colony, Tirupathi, Chittoor District. ..... PETITIONER AND 1 State Bank of India, S.V.U,. Campus, Tirupathi Branch, Rep. by its Manager, Tirupathi, Chittoor District. 2 State Bank of India, Zonal Office, Tirupathi, Rep. by its Asst. General Manager, Tirupathi, Chittoor District. 3 Nooka Lakshma Reddy S/. Nooka Sana Reddy R/o. 11-55, S.V. Nagar, Tirupathi. 4 Sri Lakshmi Venkateswara Jewelary Shop, Rep. by its Partners M. Narender Reddy & Naga Subba Reddy R/o. D.o. 208, Bazar Street, Tirupathi. .....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 to issue a writ of Mandamus, Under Section 226 of Contitution of India and declaring the action of the 1st respondent in issuing proceedings dt. 8-10-2007 in respect of a property situated bearing flat No. G3 ward No.1 Uma Apartments, Balaji Nagar, Tirupathi under Securitization Act is illegal, improper and arbitrar, consequently by directing the 1st respondent not to disposes the petitioner from the possession of the flat No.G3, Ward No. 1 Uma Apartments, Balaji Nagar, Tirupathia is illegal, improper and void and pass such other and further orders Counsel for the Petitioner:MR.MASTHAN NAIDU CHERUKURI Counsel for the Respondent No.: . The Court made the following : ORDER: (Per Sri Justice GHULAM MOHAMMED) This Writ Petition has been filed by the petitioner seeking Writ of Mandamus declaring the action of the first respondent- State Bank of India in issuing proceedings dated 8.10.2007 in respect of a property bearing Flat No. G3, Ward No. 1, Uma Apartments, Balaji Nagar, Tirupathi under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the SRFAESI Act’) as illegal and consequently direct the first respondent not to dispossess him petitioner from the flat in question. Brief facts of the case are that the petitioner entered into an agreement of sale with the third respondent on 28.11.2005 for a valid consideration of Rs. 14,00,000/-. It is stated that the petitioner initially paid a sum of Rs. 6,00,000/- and for balance amount of Rs. 8,00,000/- he availed loan from the Andhra Bank, Balaji Nagar, Tirupathi and he has been in possession along with his family members. It is submitted that the petitioner recently came to know that the flat purchased by him was mortgaged with the first respondent-Bank by the 4th respondent herein by obtaining a loan of Rs. 6,40,511.00 , 1,91,850/- and Rs. 1,78,670/- including interest thereon. It is also submitted that the first respondent-Bank issued notice dated 8.10.2007 under Section 8(1) and 13 (2) of the SRFAESI Act and also under Rule 9 of the Security Interest (Enforcement) Rules, 2002 for symbolic possession of the property in question and published in vernacular news paper and also in English daily. Feeling aggrieved by the same, the present Writ Petition has been filed. The learned counsel appearing for the petitioner submits that basing on the documents the petitioner availed the loan and he is not aware that the said flat in question, was mortgaged by the 4th respondent to the first respondent-Bank and there is no encumbrance over the property. We have heard the learned counsel appearing for the petitioner and have perused the material made available on record. As seen from the record , the petitioner purchased the property in question from the third respondent. The 4th respondent obtained loan from the first respondent-bank. There is no privity of contract between the petitioner and the first respondent-Bank . In the absence of any privity of contract, he cannot resist the proceedings taken by the Bank under the SARFAESI Act. The proceedings of the SARFAESI Act arises between the borrower and the guarantor and not against the petitioner. The petitioner is in no way connected with these proceedings. If the petitioner is so aggrieved he can take recourse to the civil remedies, which are available to him under law against 4th respondent but not against the first respondent-Bank. Hence, the Writ Petition is misconceived and the same is liable to be dismissed. Accordingly, the Writ Petition is dismissed. However, the petitioner is given three months time to vacate the premises or for payment of the amount payable to the Bank along with costs and incidental charges. There shall be no order as to costs. _____________________________ GHULAM MOHAMMED, J ______________________________ VILAS V. AFZULPURKAR, J Dt. 10.07.2009 KA ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1. 2 CD copies