IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY EIGHTH DAY OF FEBRUARY TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE P.S.NARAYANA WRIT PETITION NO : 24345 of 2007 Between: Munaga Raghuram S/o.Venkta Seshaiah R/o.19/468 Chinna Bazar,Nellore ..... PETITIONER AND 1. The Regional manager, State Bank of Hyderabad Tirupati 2. The manager, State Bank of Hyderabad, Srirangaraja puram Stone House pet, Nellore .....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 an appropriate writ order or direction more particularly one in the nature the auction/sale notice dated 5.8.2006 putting the sale of property H.No.16/468, Chinna Bazar, Nellore town on 17.11.2007 keeping the representation dated 5.11.2006 is pending is illegal, arbitrary, mala fide and against the principles of natural justice and to pass Counsel for the Petitioner:MR.P.BHASKAR Counsel for the Respondents: SRI CH. RAVINDRA BABU The Court made the following : ORDER: Heard the counsel. 2. This court ordered notice before admission on 19.11.2007 and granted interim stay on condition of petitioner depositing an amount of Rs.2,50,000/-. It is stated that the said amount had been deposited by sending cheques. 3. The writ petition is filed for a writ of Mandamus declaring action of the respondent No.1 in issuing the auction/sale notice dated 05.8.2007 putting the sale of property H.No.19/468, Chinna Bazar, Nellore Town, Nellore District, keeping the representation dated 27.7.2006 pending, as illegal, arbitrary, mala fide and against the principles of natural justice and pass such other suitable orders. 3. It is stated that the petitioner availed loan facility of Rs.7.00 lakhs for housing on depositing title deeds of his residential house bearing Door No.19/468, Chinna Bazar, Nellore on 20.01.2005 and the petitioner failed to pay the loan instalments as per the terms of the agreement as he incurred heavy loss in his business. But the petitioner had paid the interest regularly up to May 2005. Further it is averred that the respondent No.1 issued notice under Section 13 (2) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (hereinafter in short referred to as ‘the Act’ for the purpose of convenience), dated 05.8.2006 and the same was published in newspapers. The petitioner made a representation to the second respondent on 05.11.2006 seeking waiver of penal interest and settle the account by way of one time settlement for closing loan account, but the respondent had not passed any orders on the petitioner’s representation. Again in the month of December 2006 the petitioner approached the respondent offering Rs.2.00 lakhs on the same day as initial amount and requested two months time for the balance amount settled by the respondent after waiving the penal interest, but the respondent refused to receive the said amount and demanded to pay the entire amount. 4. It is also averred that the respondents visited the premises on 05.11.2007 and informed the petitioner that the property mortgaged would be put to auction on 17.11.2007 and directed the petitioner to vacate the premises by the morning of 17.11.2007 which is contrary to the provisions of the Act. As per the provisions of the Act, the respondent has to consider petitioner’s representation dated 05.11.2006 and the subsequent representations. It is also stated that as per Section 13 (7) of the Act the defaulting borrower has been provided with a chance to tender the dues together with costs, charges and expenses incurred by the secured creditor before fixing the date for sale or transfer of the secured asset and the secured creditor is prohibited from selling or transferring or taking further steps in such a sale of transfer the secured asset on such tender of money by the borrower. 5. In the counter-affidavit filed it is averred that at the outset the writ petition is liable to be dismissed as the petitioner challenged the auction/sale notice dated 05.8.2007, which is not in existence at all and for wrong array of parties. Firstly, the writ petitioner in stead of making the State Bank of Hyderabad, rep. by its Authorized Officer, Regional Office, Tirupathi, who in fact issued Section 13 (2) notice and who is the designated officer, had made the Regional Officer a party and secondly had mentioned the description of the second respondent as the Manager, State Bank of Hyderabad, Srirangarajapuram, Stone House Pet, Nellore instead of making State Bank of Hyderabad, Dargamitta branch, rep. by its Branch Manager, Nellore, from which branch he availed the loan facility. It is also averred that the petitioner erroneously termed the impugned notice as auction/sale notice dated 05.8.2006, whereas the said notice was a Demand Notice issued under Section 13 (2) of the Act and the respondents did not issue the impugned notice proposing to auction the secured asset. For this reason also the writ petition is liable to be dismissed. Further it is averred that it is true that the petitioner availed Rs.7.00 lakhs towards housing loan on 20.01.2005 repayable in equal monthly instalments. It is not true that the petitioner had paid interest regularly up to May 2005. The petitioner had paid only one instalment of Rs.7,000/- on 15.3.2005 and thereafter he defaulted. It is also stated that the registered notice under Section 13 (2) of the Act dated 05.8.2006 sent by the respondent bank to the petitioner’s residential address was returned with a postal endorsement “Addressee not in town return to sender”. The petitioner had not sent any representation to the respondent bank, more particularly, the one filed along with the writ petition dated 05.11.2006. It is also false that petitioner approached the respondent bank in December 2006 offering Rs.2.00 lakhs and sought for one time settlement and waiver of penal interest. It is also stated that the bank had filed a petition under Section 14 of the Act before the District Magistrate, Nellore to assist the bank in taking possession of the secured asset dated 04.1.2007 and the District Magistrate, Nellore had passed an order dated 10.01.2007 directing the M.R.O, Nellore to take possession and hand over the secured asset to the Authorized Officer of the respondent bank. In this connection the revenue officials might have demanded to vacate the premises. Several other averments had been made in the affidavit filed in support of the writ petition. 6. No doubt, a ground relating to wrong array of parties had been specifically raised. In the light of the facts and circumstances inasmuch as substantial amount already had been paid and also it is stated that certain representations already had been made, let the writ petitioner make appropriate representation to the competent authority and let the competent authority look into the grievance of the petitioner relating to the granting of reasonable time in the light of the facts and circumstances. 7. With the above observation, the writ petition is disposed of. No order as to costs. ____________________ (P.S. NARAYANA, J) Date: February 28, 2008. BSB ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies Form-NIC-OGS/WP{TRK}