IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE SECOND DAY OF MARCH TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH and THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT PETITION NO : 18529 of 2008 Between: M/s.Sree Tejasree Jewellers, rep.by its Partner N.Mallikarjuna, S/o.N.V.Ramanaih Flat No.107, Sovereign Shelter, MCH.No.11-4-650, Lakadikapool,Hyderabad-500004 ..... PETITIONER AND 1 Punjab National Bank, 7 Bhikaiji Camp Place, New Delhi-110066, rep.by its Chairman and Managing Director 2 Punjab National Bank, Circle Office, rep.by its circle head 6-1-73 ,2nd floor Sayeed Plaza, Saifabad, Hyderabad-4 3 Punjab National Bank, R.P.Road, Secunderabad rep.by its Chief Manager .....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 to issue a writ order or direction more particualrly one in the nature of writ of mandamus declaring the action of the 3rd respondent in freezing the account of the petitioner by his letter dated 12.2.2008 and consequential notices dated 15.4.2008 in REF.CC(HYP)87-309 dated 25.7.2008 in REF.CC(HYP)87-309 as arbitrary, illegal, improper violative of principles of natural justice and unconstitutional and set aside the same and consequently direct the respondents to permit the petitioner to operate the account and pass Counsel for the Petitioner:MR.S.KHADER MOHIDDIN Counsel for the Respondent No.: . The Court made the following : Form-NIC-OGS/WP{TRK} IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE SECOND DAY OF MARCH TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH and THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT PETITION NO : 26201 of 2008 Between: M/s. Sree Rejasree Jewellers Rep. by its Partner, N.Mallikarjuna S/o. N.V. Ramanaiah Flat No. 107, Soverign Shelter, MCH No.11-4-650, Lakdikapul, Hyderabad - 500 004. ..... PETITIONER AND 1 Punjab National Bank, 7, Bhikaiji Cama Place, New Delhi - 110066. Rep. by its Chairman and Managing Director. 2 Punjab National Bank, Circle Officer, Rep. by its Circle head, 6-1-73, 2nd Floor Sayeed Plaza, Saifabad, Hyderabad-4. 3 Punjab National Bank, R.P. Road, Secunderabad, Rep. by its Chief Manager. .....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 to issue a writ order or direction more particularly one in the nature of Writ of Mandamus declaring the notices dated 03.11.2008 and 15.11.2008 of the 3rd respondent herein U/s. 13 (2) of The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 to the petitioner herein as arbitrary, illegal, improper and contrary to the guidelines and instructions of the Reserve Bank of India and set aside the same and consequently direct the respondents to permit the petitioner to operate the account and pass such other order or orders. Counsel for the Petitioner:MR.VL.N.G.KMURTHY Counsel for the Respondent : MR.AMBADIPUDI SATYANARAYANA FOR R1TO3 The Court made the following : Form-NIC-OGS/WP{KURR} HONOURABLE SRI JUSTICE V.ESWARAIAH AND HONOURABLE SRI JUSTICE VILAS V. AFZULPURKAR W.P.Nos.18529 & 26201 of 2008 COMMON ORDER: (Per Hon’ble Sri Justice Vilas V. Afzulpurkar) Both the writ petitions are filed by the borrower, who is the petitioner herein. While the prayer in W.P.No.18529 of 2008 is seeking to declare the action of the 3rd respondent-bank in freezing the account of the petitioner by his letter dated 12-02-2006 and consequential notices as arbitrary and illegal, the relief prayed in W.P.No.26201 of 2008 is questioning the notices issued by the 3rd respondent dated 03-11-2008 and 15-11-2008 under Section 13 (2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for brevity ‘the Act’). 2. During hearing of these writ petitions, on earlier occasions, this Court had passed an order dated 30-09-2008 in W.P.No.18529 of 2008, regarding consensus on repayment schedule reached between the parties and accordingly granted time for payment. However, it appears that the said consensus did not materialize on account of various reasons including that the respondents-bank insisted upon the consensus being signed by the guarantors also and accordingly, the guarantors could not come forward as insisted upon by the bank. Ultimately, the bank issued notices under Section 13 (2) of the Act. Questioning the same, these writ petitions came to be filed. 3. This Court, by order dated 24-12-2008 in W.P.No.26201 of 2008, while ordering notice before admission, the petitioner was directed to deposit a sum of Rs.45.00 lakhs on or before 31-12-2008 and subject to that condition, the stay of proceedings were granted. 4. It is represented by both sides that the said order was complied with. 5. Thereafter, both these writ petitions were coming up for hearing and we have heard the same on various dates from 11-02- 2009 to today. On the earlier occasion, keeping in view the earlier payment schedule, as referred to above, we had granted time to both the parties to arrive at a consensus afresh. But it is being reported today that no consensus as such is reached between the parties. In view of the same, both the writ petitions are being disposed of by this common order. 6. The writ petitions primarily question the action of the bank in resorting to Section 13 (2) of the Act and at the stage of notices under Section 13 (2) of the Act, the writ petitions came to be filed. The petitioner has already filed his objections/reply to the said notices and according to the bank, they have replied to the same. If the petitioner is so desirous, it is open for the petitioner to file additional objection/reply, within a period of one week from today and the 3rd respondent shall consider and dispose of the same in accordance with law including any further directions or orders, if required under Section 13 (4) of the Act. 7. It is needless to point out that in the event of any such order under Section 13 (4) of the Act is passed, the petitioner shall be at liberty to question the same in accordance with law as contemplated under Section 17 of the Act. 8. With the above directions, both the writ petitions are disposed of. No costs. _________________________ JUSTICE V.ESWARAIAH _____________________________ JUSTICE VILAS V. AFZULPURKAR 2nd March 2009 Kvr