IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE TWENTY FIRST DAY OF OCTOBER TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE B.SESHASAYANA REDDY WRIT PETITION NO : 22348 of 2008 Between: B.Yugandhar S/o.B.Nagabhushan Rao R/o.Quarter No.28, 1 Graham Road,Kamarhathy Kolkata- 700058 ..... PETITIONER AND 1 Bank of India., rep.by its Chairmen, star House C-5, "G" Block, Bandra Kurla Complex, Bandra East Mumbai-400051 2 The Chief General Manager,Bank of India., Visakhapatnam, SMG Branch, 2nd floor, Founta Plaza Dabagardens, Visakhapatnam 3 The Authorized officer, Visakhapatnam Zonal office Kishan bhavan, 10-50-51,Ramnagar, Waltair Main Road Visakhapatnam-530002 4 Mr.Chintala Lakshmi Narayana Murthy S/o.Ch.Appala Naidu R/o.Flat No.103,Swagurha Rose Apartment Narasimha Nagar, Visakhapatnam 5 Mr.Konathala Venkataramana S/o.Late Konathala Mahalaxmi 14-28-1,Neelakantavari STreet Gavarapalem, Anakapalli- 531002 .....RESPONDENTS 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 issue any appropriate writ order or direction more in the nature of a writ of Certiorari quashing the notice dated 2.2.2008 under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act of 2002 and consequential declaration of taking possession of the properties of the petitioner and the respondents 4 and 5 dated 28.5.2008 issued by the 3rd respondent published in "Eenadu" daily on 1.6.2008 as arbitrary, illegal, and violative of principles of natural justice and consequently direct the 3rd respondent to release the property i.e. shed E-26 AIE Peddagantyada which was taken possession by the 3rd respondent vide notiﬁcation dated 28.5.2008 or else the petitioner will suffer irreparably. Counsel for the Petitioner: SMT.M.BHASKARA LAKSHMI Counsel for the Respondents.: . The Court made the following : ORDER: This writ petition has been ﬁled by B.Yugandhar assailing the notices issued under Section 13(2) and 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, ‘the Act’) issued by the 3rd respondent. 2. The petitioner claims that he is the owner of the shed E- 26 AIE, which is constructed on the land admeasuring 1490.31 sq. yards comprising Survey Nos.156 P and 158 P of AIE, Gajuwaka, Peddagantyada village, Visakhapatnam District, having purchased the same under a registered sale deed dated 11.10.2000 from the A.P. Infrastructural Corporation Limited. He claims to have leased out the premises to Mr.Chintala Lakshmi Narayana Murthy-4th respondent under a registered lease deed dated 12.09.2006 for the purpose manufacturing of bulk drugs in the name and style of M/s.Eswari Sri Organics for the period from 12.09.2006 to 11.09.2013. An agreement came to be entered into on 14.11.2006 with regard to leasing of the premises to the 4th respondent. According to the petitioner, he never stood as a guarantor for the loan availed by M/s.Eswari Sri Organics. But, he gave an undertaking that he will not sell the property for a period of ﬁve years. It is stated in the writ aﬃdavit that the 4 th respondent mislead him and made him to sign on certain printed documents in the Bank. 1st respondent Bank initiated proceedings under the provisions of the Act for recovery of the amounts due from M/s.Eswari Sri Organics. Initially notice under Section 13(2) of the Act was issued calling upon the principal borrower as well as the guarantors including the petitioner, and thereafter notice under Section 13(4) of the Act came to be issued. Possession notice as contemplated under Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 came to be published in EENADU daily newspapers dated 01.06.2008. Hence, the writ petition. For better understanding of the grievance of the petitioner, I deem it appropriate to refer paras.4 and 5 of the aﬃdavit ﬁled in support of the writ petition, which read as hereunder: “4. It is further submitted that, while so, a notice dated 05.12.2007 was sent by the 2nd respondent addressed to 4th and 5th respondents, a copy of which was marked to me. The said notice states that a term loan has been sanctioned to M/s.Eshwari Sri Organics on 31.10.2006 to establish a bulk drug manufacturing unit at shed E-26 AIE Peddagantyada and that bills and receipts were submitted by 4th and 5th respondent to the 2nd respondent bank conﬁrming receipt of machinery at their end and that on inspection of the factory premises, the 2nd respondent did not ﬁnd any machinery in the factory premises and that they failed to install the machinery even after a lapse of 1 year and that in spite of several requests there was no response and that this act of theirs amounts to misappropriation of Government / Public funds which attract the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. By the said notice the 2nd respondent requested both 4th and 5th respondents to close the account immediately or else suitable action will be initiated and I was asked to ensure that the entire loan amount with interest is paid immediately failing which, I will also be responsible and that appropriate action would be initiated against all, including guarantors. I was surprised to receive the said notice as I was in no way connected with the said loan sanctioned to 4th and 5th respondents. There after, I received a copy of another notice dated 11.01.2008, issued by the 2nd respondent, which was addressed to the 4th and 5th respondents and a copy of which was marked to me. As per the said notice certain facilities were sanctioned to the account of M/s.Eshwari Sri Organics and the outstanding amount is Rs.45,63, 182/-. The said notice reiterated what ever was stated in the earlier notice. By the said notice 2nd respondent asked the 4th and 5th respondents to furnish an explanation within 15 days, failing which appropriate action will be taken to protect bank interest. The said notice stated, that I am one of the guarantors in the captioned account and I will be equally responsible for repayment of the above amount. 5. It is submitted that, later I received a notice dated 22.02.2008 from the 2nd respondent Bank under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 calling upon me to discharge my full liabilities as a guarantor towards the bank regarding loan given to M/s.Eswari Sir Oranics, by paying an amount of Rs.46,36,733/- with interest at the rate of 14.25% p.a., within a period of 60 days from the date of receipt of notice, failing which I would have to face the consequences accordingly. On receiving the same I approached the 2nd respondent requesting to furnish a copy of the documents based on which such a notice was given. But I was not given any information. I submit that, subsequently there was a paper publication dt.28.05.2008 given by the 3rd respondent in the “Eenadu” paper dated 01.06.2008 that under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act of 2002, my above said property was taken possession by him. The said notiﬁcation also mentions that two properties belonging to the 4th and 5th respondents were also taken possession of by the Authorised Oﬃcer i.e., the 3rd respondent. The property of the 4th respondent is a residential house bearing Door No.13-7-11/2 Maharani Peta, Visakhapatnam which is 150 sq. yards and the property of the 5th respondent is 0.92 cents of land in Sy.No.1398/1 in Anakapalli. After receipt of the same, a notice was sent by my counsel to the respondent bank on 01.06.2008, stating that Sri Chintala Lakshmi Narayan Murthy and the then Branch Manager have created documents as if I were the guarantor and that in view of the same, copies regarding the above seized property and any other document may be sent to the counsel or to me, after the examination of which I shall come forward to settle the matter with the respondent bank. But there was no communication from the respondent bank for this notice. Subsequently, on 08.08.08 I sent another reminder to the respondent bank stating that so far I have not received any information which I have sought from them as speciﬁed in the notice and requesting them to furnish the necessary information to me at the earliest and settle the matter amicably.” 3. Heard learned counsel appearing for the petitioner and perused the material brought on record. 4. Learned counsel appearing for the petitioner submits that the petitioner was mislead by the 4th respondent and thereby certain signatures of the petitioner were obtained by him which were made use as if the petitioner gave his properties as security for the loan availed by M/s.Eswari Sri Organics. Various other contentions have been advanced to convince that the petitioner never stood as a surety for the loan availed by M/s.Eswari Sri Organics. 5. A fact remains that the respondents 1 to 3-Bank initiated proceedings under the provisions of the Act and issued a notice under Section 13(2) of the Act and thereafter a final notice under Section 13(4) of the Act came to be issued. Under Section 17 of the Act, a remedy is available to the petitioner by way of an appeal to question the notices issued under Section 13(4) of the Act. A Division Bench of this Court in K.Bala Krishna v. Debts Recovery Tribunal [1] held that a writ is not maintainable in view of the statutory alternative remedy of appeal. 6. In that view of the matter, the writ petition is dismissed at the admission stage reserving liberty to the petitioner to avail the statutory remedy of appeal under Section 17 of the Act. No costs. ________________________ B.SESHASAYANA REDDY, J. Date:21st October, 2008. cs ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies Form-NIC-OGS/WP{RLD} [1] 2006 (6) ALT 695 (D.B.)