IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE TWENTY FOURTH DAY OF MARCH TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE GODA RAGHURAM WRIT PETITION NO : 20077 of 2005 Between: G. Srinivas, S/o. G. Kasanna, R/o. H.no.6-1-51, Shivarampally, Rajendernagar Municipality, R.R.District. ..... PETITIONER AND 1 The Senior Branch Manager, A.P. State Financial Corporation, Warangal. 2 Dr. K. Ramya, W/o. Dr. K. Anil Kumar, R/o. 5-11-578, Vidyaranyapuri, Hanakonda, Warangal District, (Respondent No.2 is not necessary party) .....RESPONDENTS 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 or writs or order/s more particularly in the nature of the Writ of Mandamus declaring the action of the 1st respondent in initiating auction proceedings in respect of property bearing H.No.6-6-46/2, situated at Babulreddy nagar, Katedan, Rajender Nagar Municipality, R.R.District as illegal, arbitrary and unconstitutional; and consequently set aside the same and be pleased to pass such other order/s as this Hon'ble court may deem fit and proper in the circumstances of the case. Counsel for the Petitioner: MR.B.VIJAYSEN REDDY Counsel for the Respondent No.: MR.DURGA REDDY THIMMAYYAGIRI The Court made the following: ORAL ORDER: The petitioner is aggrieved by the conduct of the first respondent in issuing an auction notification proposing sale of property bearing H.No.6-6-46/2, Babulreddy Nagar, Katedan, Rajender Nagar Municipality, Ranga Reddy district. The paper notification was published on 27-08-2005 in a Telugu daily proposing sale of the said property. Admittedly, the second respondent herein availed loan in 2003 from the first respondent Corporation for establishing a Nursing Home. The second respondent defaulted on the repayments of the installments of the loan. The petitioner stood as guarantor and mortgaged his property aforementioned towards security to the loan obtained by the second respondent. In the circumstances above, the first respondent Corporation in exercise of the powers and authority under the provisions of Section 29 of the State Financial Corporation Act, 1951 (for short ‘the Act’) attached and seized the property of the petitioner provided as collateral security for the loan obtained by the second respondent and by the impugned notice notified it for sale. The singular grievance of the petitioner is that the impugned notification for sale has been issued without notice or opportunity to the petitioner. Had such a notice been issued to him, he would have compelled the second respondent to pay the amount due. It is additionally pleaded by the petitioner that the action of the first respondent is arbitrary viz., in proceeding against the petitioner’s property instead of proceeding against the property of the second respondent, who is the principal debtor. This latter contention of the petitioner is devoid of merit or force. It is an established position that the liability of guarantor is same as that of the principal debtor. There can therefore be no infirmity in the first respondent-Corporation proceeding against the petitioner’s property for realization of the amount due from the second respondent. Insofar as the petitioner’s grievance that no notice has been issued to him, the first respondent has filed a counter wherein it is pleaded that the Corporation had issued a letter dated 05-04-2004 to the petitioner advising him to follow up with the second respondent to clear the arrears mentioned in the notice viz., failing which the Corporation would be constrained to take action for sale of the securities under Section 29 of the Act. As there was no response to this notice, the impugned notification has been issued, is the contention on behalf of the first respondent. Sri Durga Reddy Thimmayyagiri, the learned standing counsel appearing for the first respondent states that the notice dated 05-04-2004 was addressed to the petitioner by registered post acknowledgement due and that the receipt evidencing the sending of the registration communication is also available, but the postal acknowledgement has not been received by the first respondent. On behalf of the first respondent, from the papers annexed to the counter affidavit, it is also brought to the notice of this Court that on 08-01-2008 the petitioner had addressed a letter to the first respondent requesting to furnish details of the loan outstanding in the account of the second respondent so as to enable the petitioner to arrange for closure of the loan. In response thereto, the Corporation had addressed a letter on the same day i.e., 08-01-2008 intimating that the total outstanding loan as on 31-01-2008 by the second respondent to which the petitioner is a guarantor, is Rs.13,22,816-00. In the considered view of this Court, the letter of the petitioner dated 08-01-2008 and the response of the first respondent dated 08-01-2008 constitutes sufficient sensitization to the petitioner of the extent of liability of the petitioner qua the loan outstandings of the second respondent. In the circumstances, the underlying ritual of notice need not be pursued. Since the first respondent-Corporation does not wish to proceed on the earlier sale notification, but would like to issue a fresh sale notification for sale of the property under Section 29 of the Act, there need be no determination of the validity of the impugned sale notification dated 27-08-2005. Accordingly, the writ petition is disposed of on a presumption that no determination or the validity of the sale notification issued by the first respondent dated 27-08-2005 is required and recording the undertaking of the first respondent that it would take steps to issue a fresh notification and would not proceed on the earlier notification dated 27-08-2005. The first respondent however is at liberty to issue a fresh publication for sale of the property under Section 29 of the Act. Nothing in this order shall be construed as an impediment to the petitioner negotiating with the first respondent. No costs. ____________________ GODA RAGHURAM, J Dated: 24-03-2008 Pvks/*