THE HOB’BLE SRI JUSTICE P.S.NARAYANA W.P.NO.19693 OF 2007 Dated: 01.2008 Between: G. Devanand. ..Petitioner. and The State Bank of India, rep. By its chief General Manager, Hyderabad, A.P. and others. ..Respondents. THE HON’BLE SRI JUSTICE P.S.NARAYANA W.P.NO.19693 OF 2007 ORDER: Heard Sri M. Prasad Rao, learned counsel for the petitioner and Sri M. Narender Reddy, learned counsel for the respondents. 2. This writ petition is filed praying for a writ of mandamus declaring the possession notice, dated 14.01.2007, of the 2nd respondent and proceedings in Rc.No.MC1/1472/2007 dated 08.05.2007 of the 3rd respondent and Rc.No.324/2007 B dated 11.09.2007 of the 4th respondent, asking the petitioner to hand over the possession of the property belongs to him viz., residential house bearing Sy.No.660/3 to an extent of 1100 sq. feet, house bearing door No.1-1-25/A, measuring 960 sq. feet and building bearing door No.1-1155-A/1, situated in Kadiri, Anantapur District, as illegal and arbitrary. 3. It is averred that the petitioner is a businessman and also a contractor in civil works particularly, railway work and also belongs to deprived class. It is stated that the Indian Oil Corporation notified to establish a petrol pump in Palamaner, Chittoor District in the year 2003. The petitioner made his application to the said Corporation and after following the entire procedure as contemplated under the relevant provisions, the Corporation entered into an agreement with the petitioner on 05.03.2003 to establish a petrol pump under the name and style of M/s. Anusha Sai Agencies at Palamaner, Chttoor District. After that the petitioner secured valid licenses and running the same without there being any violation of conditions of agreement. 4. It is stated that while establishing the said petrol pump, the petitioner approached the 2nd respondent herein for financial assistance and the 2nd respondent Bank arranged the over draft facility to the petitioner to a tune of Rs.16,35,000/- by deposit of title deeds of the properties, situated in Kadiri Town, Anantapur District belonging to the petitioner, as security. Right from the advancement of the said facility from the year 2003 to 2006 the monthly instalments are directly deducted by the Bank from the petitioner’s bank account towards the said loan facility. In the month of January, 2006 one more petrol pump is established within a distance of 50 yards from the petitioner petrol pump. Due to heavy competition the sales in the petrol pump of the petitioner are reduced by maximum extent. To compete in the business, the petitioner had taken all the precautions and also obtained an oil supplying tanker by investing huge money and also obtained license to supply the petrol. 5. It is stated that certain persons, who are inimically disposed towards the petitioner in the business made enormous petitions to the Indian Oil corporation stating that the petitioner is not maintaining proper stocks as per the agreement and also indulging in adulteration of petrol. Without verifying the truth or otherwise of the said allegations, the Indian Oil Corporation stopped supply of petrol to the petitioner petrol pump in the month of April, 2006, vide its letter, dated 13.04.2006. The proceedings are still pending for consideration before the competent authorities i.e., Indian Oil Corporation. The Indian Oil Corporation addressed a letter dated 13.06.2007 expressing their willingness and to give training to the petitioner to revive his business and he had also expressed his readiness to re-open the said petrol pump after rectifying the technical defects in his petrol pump due to closure of the said petrol pump since February, 2006. It is stated that this clearly establishes that his business will be regained at any point of time within 3 or 4 months and he was also sincerely trying to rectify his technical defects and involve in active business and clear the above said loan to the 2nd respondent Bank on priority basis. This fact is clearly established from the notice issued by the 2nd respondent Bank dated 01.02.2006, wherein the irregularity of payment of instalments is mentioned as Rs.67,016/-(over due amount on the said Over Draft Facility). In spite of all these facts mentioned above are within the knowledge of respondents 1 and 2 herein, the Bank authorities initiated proceedings under Section 13(3A) of the Act 54 of 2002 and issued a demand notice on 05.07.2006 calling upon him to clear the loan amount of Rs.17,18,028-75ps within 60 days from the date of the said notice, otherwise they will take over the possession of the properties which kept as security. Thereafter, the petitioner approached the respondents 1 and 2 and requested for certain time. In spite of the same, the respondents-Bank issued a notice under Section 13(4) of the Act 54 of 2002 on 04.01.2007 mentioning the schedules of the petitioner’s property at item Nos. 1 to 3 and the same was published in newspaper by taking over the possession of the properties on paper. 6. It is further stated that in response to the said notice, the petitioner made a representation before the 2nd respondent on 18.01.2007 asking him for settlement of entire debt on one time settlement after giving credit to the amount already paid by the petitioner by accepting Rs.16,00,000/- and to withdraw the said proceedings. When the 2nd respondent had refused for the said request of the petitioner vide his letter dated 06.03.2007, the petitioner made a representation before the 1st respondent on 09.03.2007 explaining him in detail the amount due to the bank and his financial position and expressed his willingness to clear the loan amount within six months while requesting him to withdraw further proceedings. In fact, the petitioner also sent a reminder on 12.03.2007 expressing his willingness for one time settlement on payment of Rs.16,35,000/-. The petitioner credited Rs.1,50,000/- to the loan account on 25.03.2007 by cash clearly mentioning the account number to establish his bonafides. In spite of the same without passing any orders, the 2nd respondent addressed a letter to the 3rd respondent. In response to the said letter, the 3rd respondent issued proceedings in Rc.No.MC1/1472/2007, dated 08.05.2007 while exercising the powers under Section 14 of Act 54 of 2002 directed the 4th respondent herein to take over possession of his properties which are kept as security towards the said loan facility and hand over it to the 2nd respondent herein. In response to the above proceedings, the 4th respondent issued a notice vide Rc.No.324/2007(B) dated 11.09.2007 asking the petitioner to be present on 26.09.2007 without fail and requested to hand over the vacant possession of the petitioner’s properties to hand over the same to the 2nd respondent. 7. It is further stated that if the respondents are allowed to take over possession of the petitioner’s properties, the petitioner will be deprived of his right to live with human dignity as guaranteed under Article 21 of the Constitution of India. It is not the case of the respondents 1 and 2 that the entire loan period for the said loan amount had come to an end to clear the entire debt and the petitioner intentionally and deliberately avoiding the payments. From time to time the petitioner placed his financial position before the 2nd respondent while expressing his intention to clear the instalments immediately on revival of his business or to provide repayment by extending the benefit of one time settlement by providing reasonable time. The respondents 1 and 2 if really intended to recover the loan amount, they ought not to have proceeded further in the matter. But, instead, the 2nd respondent is bent upon to take over the possession of the petitioner’s property to put in public auction only to defame him in the society. It is stated that the petitioner is also undertaking South Western Railway Works and the concerned authorities also issued letter, dated 04.09.2007 directing the petitioner to complete the work on 27.01.2008. The petitioner is also trying to complete the said works and if that work is completed, the said authorities are also due of certain amount to the petitioner. If the said bills are paid by the railway authorities, he will credit the same to the respondent bank. Viewed from any angle the petitioner is very much eager to clear the said loan amount. In case, the respondents are allowed to take over the possession of the said valuable properties of the petitioner even before the completion of the agreement period, which is up to 2010, the petitioner will be put to irreparable loss and injury. Hence, he filed this writ petition. 8. W.V.M.P.No.3559 of 2007 was filed along with the counter- affidavit. This Court issued rule nisi on 17.09.2007 and in W.P.M.P.No.25385 of 2007 granted interim stay on condition of the petitioner depositing total amount within a period of six weeks from the date of receipt of a copy of the order, failing which, the interim stay shall stand vacated automatically. Further, it is stated that it is needless to say that if any amount already had been deposited, the same shall be given credit to. It is stated that the conditional order had not been complied with. 9. In the counter-affidavit filed by respondents 1 & 2, it is stated that writ petition is not maintainable since the petitioner is having an alternative remedy of filing an appeal or application before the Debts Recovery Tribunal as provided under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the Act’ for the purpose of convenience). A reliance was also placed on K. BLALKRISHNA v DEBTS RECOVERY TRIBUNAL, HYDERABAD[1] and V.K.SHEKHAR v. INDIAN BANK[2] wherein it was held that the writ petition is not maintainable as effective alternative remedy is provided under Section 17 of the Act. Therefore, the writ petition is liable to be dismissed. 10. It is stated that the petitioner, who is the sole proprietor of M/s. Anusha Sai Agencies, had availed the cash credit loan facility of Rs.16,35,000/- from the 2nd respondent bank after executing security documents on 17.12.2004 and also creating equitable mortgage over the immovable properties of the petitioner and his wife. 11. It is further stated that the petitioner had committed irregularities in operating the loan account when the 2nd respondent bank demanded the petitioner to regularize the loan account within the period of 20 days. The business activity of the petitioner was suspended during the month of April, 2006 by the Indian Oil Corporation in view of the alleged malpractices in operating the retail business of Indian Oil Corporation. The petitioner failed to restore the licence from Indian Oil Corporation and also failed to repay the entire loan amount to the Bank. Therefore, the 2nd respondent bank issued demand notices dated 05.07.2006 calling upon him and his wife to repay the entire loan amount together with interest. The petitioner sent a reply dated 23.08.2006 to the said demand notice, requesting six months time to repay the loan amount together with interest to the 2nd respondent bank. 12. It is also stated that the petitioner through the letter, dated 29.03.2007, promised to repay the loan amount together with interest, but again committed default. Therefore, the proceedings initiated by the 2nd respondent bank for recovery of the debt under the provisions of the Act. 13. Further facts had been narrated and it is stated that the petitioner had not complied with the conditional order made by this Court. These are the respective stands taken by the parties. 14. In the light of the facts and circumstances averred in the affidavit filed in support of the writ petition and also the stand taken in the counter-affidavit, the petitioner is having a remedy under the Act aforesaid. Hence, liberty is given to the petitioner to avail the said remedy or pursue the other remedies available to him in law. Except making this observation, no further positive direction can be given in the present writ petition. 15. Subject to the above observations, the writ petition shall stand dismissed. No order as to costs. ________________ P.S.NARAYANA, J Dated: .01.2008 sj [1] 2006(6) ALT 695 [2] 2006(6) ALD 778