IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY THE TWENTY FIRST DAY OF NOVEMBER TWO THOUSAND AND EIGHT :PRESENT: THE HON'BLE SRI JUSTICE L.NARASIMHA REDDY WRIT PETITION NO : 18322 of 2002 Between: M/s. NAVODAYA INDUSTRIES, rep. by its Managing Partner Mr.K.Sathyanarayana S/o.Shankaraiah, R/o.11-23-2259, Ganeshnagar,Warangal ..... PETITIONER AND A.P.State Financial Corporation, Warangal Branch, Balsamudram, Hanamkonda, rep. by it’s Sr. Branch Manager. .....RESPONDENT Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court may be pleased to pass an order, direction or writ, particularly, one in the nature of the Writ of Mandamus directing the Respondent Corporation to waive the attachment and release all documents of the petitioners as the loan amount was duly repaid by 1992 itself. The petition coming on for hearing, upon perusing the petition and the affidavit filed herein and the orders of the High Court dated 27-1-2003 made in WPMP.No. 23040 of 2002, and dt: 15-3-2004 made in WVMP.No. 23040 of 2002, and dt: 10-12-2007 & 09-6-2008 made herein and upon hearing the arguments of Sri Akella Srinivas, Advocate for the Petitioner and of Sri Y.N.Lohita Advocate for the respondent, the Court made the following: ORDER: “On noticing that the advertisement threatening the defaulters of the Andhra Pradesh Financial Corporation with the inevitable consequence of being arrested and handcuffed, this Court passed an order on 19-11-2008 directing the learned counsel to furnish the particulars as to the officials who are responsible of issuance of the advertisement on 09-09-2002. Today the learned standing counsel has stated that the proposal was mooted by one Sri C.Jagannath Reddy, the then General Manager of the Corporation and it was approved by the then Managing Director, Sri J.C. Mohanty, IAS. It is stated that Sri Jagannath Reddy retired from service, whereas Sri J.C. Mohanty was transferred to another organization and is said to have taken voluntary retirement. A perusal of advertisement discloses that the Corporation conveyed a message to its entrepreneurs, who are due to pay the amounts, either to clear the arrears or to face arrest. The Senior Branch Manager addressed a letter, dated: 12-09-2002 to the petitioner with the following warning. “AVOID ARREST & IMPRISONMENT. BE RESPONSILBLE CITIZEN.” The Corporation is the creation of a statute enacted by the Parliament. The object is to provide financial assistance to the intending entrepreneurs without any profit motive and at reasonable interest. Even if it is to be treated as a financial agency simplicitor, it is expected, to act as model agency so that the others can emulate it. The threats and extortions of the nature mentioned in the advertisement do not befit the organization and in a way, run contrary to the norms stipulated by the Reserve Bank of India, and the basic tenets of human dignity protected under the Constitution of India. The Reserve Bank of India itself issued guide lines in the context of recovery of amounts in April, 2008 on noticing that certain banks are employing recovery agents who in turn are resorting to objectionable methods. In those cases at least the modus operandi occasional and concealed. In the instant case, the Corporation has openly administered threat and warning to the entrepreneurs who had obtained loan from it. The Corporation is directed to explain as to how far it can justify such a course of action and indicate as to why the necessary directions in this regard be not issued. Post after two weeks. By that time, the learned standing counsel shall furnish statement of account in relation to the account of the petitioner.” ASSISTANT REGISTRAR // TRUE COPY // for ASSISTANT REGISTRAR To 1. The Senior Branch Manager, A.P.State Financial Corporation, Warangal Branch, Balsamudram, Hanamkonda. 2. One C.C.to Sri Akella Srinivas, Advocate. (OPUC) 3. One C.C.to Sri Y.N.Lohita, Advocate. 4. One spare copy. HIGH COURT AB DRAFTED ON 24-11-2008 LNRJ DATE: 21-11-2008 NOTE: POST AFTER TWO WEEKS ORDER WP. NO. 18322 OF 2002 DIRECTION