THE HON'BLE SRI JUSTICE GHULAM MOHAMMED and THE HON'BLE SRI JUSTICE G. CHANDRAIAH W.P.No.20423 of 2010 ORDER: (Per Sri Justice Ghulam Mohammed, J) This writ petition is filed seeking a writ of mandamus to declare the action of the first respondent in conducting auction of open plot No.62, admeasuring 710.36 square yards or equivalent to 593.86 square meters in Sy.No.32/1, situated in Block No.1 of Silpa Garden, Madeenaguda village, Serilingampally Mandal and Municipality, Rangareddy District, on 30.07.2010 during the pendency of the claim petition filed by the petitioner before the first respondent, as illegal and arbitrary, and consequently, set aside the said auction. 2. The brief facts of the case are as follows: The petitioner, aged 19 years, is the daughter of Sri T. Krupakar Reddy and T. Vanitha Vani, the Managing Director and Director respectively, of the third respondent-M/s.VSK Projects Private Limited, Barkatpura, Hyderabad. The third respondent firm availed loan facilities from the second respondent Bank by mortgaging the residential plots bearing Nos.62 and 63. Since it failed to repay the loan amount, the second respondent Bank filed O.A.No.56 of 2008 before the Debts Recovery Tribunal, Visakhapatnam, for recovery of a sum of Rs.24,56,541/- and the same was allowed on 12.08.2009 and subsequently, it issued proclamation of sale, dated 20.05.2010, for sale of the said plots by fixing the date of auction on 13.07.2010. Thereafter, the petitioner and her sister, by name, T. Sneha, filed claim petitions under Section 28(5) of the Recovery of Debts Due To Banks and Financial Institutions Act, 1993 and Rule 11 of the Income Tax Rules before the first respondent-Recovery Officer, claiming the mortgaged properties under the gift settlement deeds, dated 08.03.2001 and 22.03.2001. Therefore, the second respondent- Bank postponed the auction from 13.07.2010 to 30.07.2010 and filed counters in the claim petitions. Thereafter, the first respondent had conducted auction of plot No.62 on 30.07.2010 while deferring the auction of plot No.63. 3. The petitioner filed the present writ petition stating that she is the absolute owner and possessor of plot No.62 by way of gift settlement deed, dated 08.03.2001. She states that she is neither the borrower nor mortgagor of the said property to the second respondent Bank. Her grievance is that the first respondent, without disposing of the claim petition, had conducted auction of plot No.62 on 30.07.2010, which is illegal and arbitrary. 4. The second respondent Bank filed counter stating that after publication of proclamation of sale, said T. Krupakar Reddy and Smt T. Vanitha Vani, through their daughters, filed claim petitions by creating the alleged gift settlement deeds. It is stated that since the said gift settlement deeds are unregistered, the petitioner has no title in respect of the property in question. It is further stated that after considering the facts and circumstances of the case with reference to the counters filed by the Bank, the first respondent conducted auction of the property in question on 30.07.2010 and that the auction purchaser also paid the entire bid amount. The total outstanding amount is Rs.45,64,183-73ps as on 13.07.2010. 5. Learned counsel for the petitioner vehemently contended that plot No.62 was gifted to the petitioner by way of gift settlement deed, dated 08.03.2001, by her father and that though the claim petition filed by the petitioner is pending, the first respondent ought not to have conducted auction of plot No.62 on 30.07.2010. 6. To rebut the said contention, learned Standing Counsel for the second respondent Bank contended that the father of the petitioner had created the alleged gift settlement deed so as to stall the recovery proceedings. He further contended that since the alleged gift settlement deed is an unregistered document, the first respondent had conducted auction on 30.07.2010. 7. The petitioner is claiming ownership of plot No.62, which was mortgaged by her parents being Managing Director and Director of the third respondent, by filing the claim petition before the first respondent stating that it was gifted by her father vide gift settlement deed, dated 08.03.2001. Admittedly, the alleged gift settlement deed is not registered. The second respondent Bank filed counter in the said claim petition. The first respondent without deciding the claim petition of the petitioner in respect of plot No.62, had conducted auction on 30.07.2010. As such, whether the claim of the petitioner is a genuine or not under the alleged gift settlement deed has to be decided by the first respondent before proceeding to conduct the auction. Therefore, we set aside the auction proceedings conducted on 30.07.2010, and the first respondent is directed to dispose of the claim petition of the petitioner within three weeks from today. Meanwhile, as the learned counsel for the petitioner seeks time for payment of the entire outstanding amount, the third respondent is directed to deposit the entire outstanding amount to the satisfaction of the second respondent Bank, in default, the Bank is at liberty to proceed in accordance with law. However, this order does not preclude the second respondent Bank from proceeding with regard to the other liabilities in accordance with law. With the above direction, the Writ Petition is disposed of. No costs. No order as to costs. ______________________ GHULAM MOHAMMED, J _________________ G. CHANDRAIAH, J Date:25.08.2010 sj