THE HONOURABLE SRI JUSTICE P.S.NARAYANA WRIT PETITION No.22553 of 2007 Between: T.V.Sesha Ratnam. .. PETITIONER and Bank of India and others. .. RESPONDENTS l THE HONOURABLE SRI JUSTICE P.S.NARAYANA WRIT PETITION No.22553 of 2007 ORDER: 1. Heard Sri Ravi Shanker, counsel representing the writ petitioner and Sri K.Phani Kumar, counsel representing the respondents. 2. This writ petition is filed praying for a Writ of Mandamus declaring the action of the respondents in threatening to take over possession of the property bearing vacant house site admeasuring 373.6 sq. yards in Plot No.10 situated in Ward No.2, old Block No.3, new Block No.70, in S.No.212- 1/C/1 part, in Godari Gunta, H/o.Suryaraopet of Kakinada Municipality, without following procedure laid down under Sections 13(3)(a) and 13(4) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short “the Act”), as illegal, arbitrary and violative of Article 14 of the Constitution of India and consequently set aside the Notice, dated 06-10-2007, published in the Andhra Jyothi Daily News Paper (East Godavari Edition) and pass such other suitable orders. 3. It is stated by the writ petitioner in the affidavit filed in support of the writ petition that she is a propritrix of M/s.T.V.S.Digital Printers and she belongs to down trodden society i.e., Scheduled Caste and herself and her husband started small business with their hard work and developed the same. The respondent bank also extended some credit facilities to cope up with the working capital etc. Her husband is also engaged in other business and not only in business, he is also a front line leader in Telugu Desam Party and he is a President of Telugu Yuvatha. Further, he is also Secretary of Telugunadu Trade Union Council at Kakinada and he is also associated with other social service organization. In recognition of his services, the Collector, East Godavari District, had also given him appreciation Certificate during Independence Day celebration. He also started Spruha Voluntary Organisation to enlighten the poor people and also given them necessary upliftment in the Society. 4. It is further stated that while matter stood thus, the petitioner’s small printing business had been expanded and she had purchased the latest Digital Technology Machine, which can print big posters in seconds and the unit cost itself is more than Rs.25,00,000/-. Throughout, their bankers are Bank of India and they raised several loans, like Car Loan and Personal Loans and cleared the same, which are running into lakhs of rupees. Basing on their back ground and credibility, the Bank had come forward to give cash credit of Rs.2,00,000/- and further Rs.6,00,000/- under Small Scale Industries Term Loan Account. She used to utilize the said credit limits and paying regularly the instalments, as directed by the Bank. 5. It is further stated that while matter stood thus, a new Chief Manager, by name one Y.B.T. Sunder Rao had taken charge in the month of June, 2007. Later, he visited their house and at that time, the first floor of their house was vacant and he requested to let out the same for his use but they declined to give the same at the rate quoted by him. 6. It is further stated that a notice was issued on 08-08-2007 under Section 13(2) of the Act demanding to pay an amount of Rs.6,92,369/- towards Term Loan and Rs.1,87,274/- towards cash credit account and further taken possession of property, which is mortgaged to the Bank. It is stated that the said action of the respondents is highly arbitrary, irregular and without verifying even the statement of the bank, the action is initiated, since as on the date of issuance of notice, she is liable to pay only Rs.1,14,000/- in cash credit and about Rs.5,81,000/- in Term Loan Account. Soon after issuance of notice, the petitioner and her husband requested the 1st respondent to withdraw the notice, as they are regular in payment and the same was given only to malign the reputation of the husband of the petitioner, who is a Front Line Leader of Telugu Desam Party and also due to personal grudge. 7. It is further stated that the respondents are well aware of the fact that the Machinery worth about Rs.25,00,000/-, which is in working condition and without attaching the same going against the property of Guarantor and issuing notice and also publishing in News Paper under Section 13(2) of the Act is highly arbitrary and irregular. Even, the notice published in News Paper i.e., Andhra Jyothi on 07-10-2007 shows that the respondents had arbitrarily and irregularly, even without application of mind, published the notice, when she was due Rs.1,14,000/- as on 17-08-2007, it was stated that as if she was due to the extent of Rs.1,87,274/-. 8. It is further stated that even when negotiations were going on, she is regular in payment and having accepted the payments of Rs.50,000/- in one account and Rs.35,000/- in another account during the months of August and September respectively, publishing Notice under Section 13(2) of the Act, is highly arbitrary and illegal. The said action is initiated by Y.B.T.Sunder Rao as they refused to give portion of their house on rent to him and further he was hand-in-glove with persons of political party in power and in order to malign the reputation of the family of the petitioner the present Notice was published for paltry amount of Rs.1,87,000/- and odd. In fact, as stated supra, the machinery itself is cost about Rs.25,00,000/-. 9. It is further stated that it is pertinent to mention that when such a huge and costly machinery was available without taking recourse of attaching the machinery, straightaway publishing notice in News Paper under Section 13(2) of the Act is highly arbitrary and irregular. 10. It is further stated that after publication of the notice, they lost reputation in the Society since it shows as if they are defaulters and they had also lost number of their elite clients, who always give them orders and the petitioner reserves her right to take appropriate legal action against the respondents personally in an appropriate legal forum. 11. It is further stated that after publication of the notice, the petitioner requested the respondents to allow her to pay remaining amount in instalments, as she is running firm and the turnover will be in lakhs and mostly their business was on credit basis. Inspite of her request and submitting representations, the respondents are threatening her to pay entire loan amount or else they will take possession of the property, which belongs to her mother and the bank officials also sending their agents and threatening that they will take possession of the property by force. When the property given as Security was not registered with the Central Registrar, according to Section 20 of the Act, the Bank cannot take over the property under the Act. Viewing from any angle, the action of the respondents in publishing notice and intend to take possession of the property is highly arbitrary, illegal and is made only on personal grudge and also due to political affiliations. In such circumstances, the writ petitioner approached this court praying for appropriate relief. 12. It is brought to the notice of the court that even subsequent to the compliance of the conditional order made by this court, certain amounts had been paid. However, it is stated in the counter affidavit that the averments made in para 3 are false and the facts are as under :- “The total unit cost is Rs.22,50,000/- as on 26-03-2005 and total Term Loan sanctioned is Rs.8,00,000/- but not Rs.6,00,000/- and the cash credit limit is Rs.2,00,000/-. 13. It is further stated that the averments made in para 4 are false and the name of the Manager is Mr.C.Srinivasa Rao and Mr.Y.B.T.Sundara Rao is a Chief Manager and Authorised Officer at Zonal Office, Visakhapatnam. It is false to say that Mr.Sundara Rao requested for house at Kakinada for his stay. Neither Mr.Y.B.T.Sundara Rao nor the then Manager Mr.C.Srinivasa Rao stayed with family at Kakinada. 14. It is further stated that the averments made in para 5 are totally false and the respondents issued demand notice under Section 13(2) of the Act on 23-05-2007. Failing to pay after demand notice, the respondents issued Possession Notice on 08-08-2007 and affixed the same under Section 13(4) of the Act. The account position is as follows:- Cash Credit Term Loan As on date of demand notice 23-05-2007 1,84,670/- 6,80,718/- As on date of possession 08-08-2007 1,64,670/- 6,31,718/- Balance as date i.e. 22-11-2007 92,441/- 5,89,126/- 15. It is further stated that uncharged interest from 26-03-2007 and other charges i.e. valuation and publication, which are already incurred to be debited to the account, is taken into consideration. Further, the averments made in paras 6 and 7 had been denied. 16. It is further stated that the averments made in paras 8, 9 and 10 had also been denied. It is stated that there is no need to register the Security with the Central Registrar at this stage under Section 20 of the Act. Further, the Central Registrar is yet to be appointed by the Government of India. After the account became NPA, unless the petitioner pays the entire dues of the bank, it is not possible to upgrade the account under the Act. The petitioner never made any representation under Section 13(3A) of the Act requesting the bank to consider for payment of instalments due to the bank. Further, the averments made in para 11 had been denied. With regard to the averments made in para 12, it is averred that after issuing possession notice the appeal shall lie with Debt Recover Tribunal, Visakhapatnam only under Section 17 of the Act. 17. In the light of the respective stands taken by the parties, since the petitioner is having alternative remedy, the writ petition, as such, is not maintainable. However, inasmuch as it is stated that certain amounts had already been paid, let the petitioner make appropriate representation to the banking institution and let the banking institution consider the same in accordance with law. Except making this observation, no positive direction as such can be given in the present writ petition. Further, liberty is given to the petitioner to pursue other legal remedies available to her, if she is so advised. 18. Accordingly, with the above observation, the writ petition is disposed of. No costs. ___________ -01-2008 Prv