IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE SIXTH 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.4744 of 2009 Between: L.Mahesh Narayana S/o.Late Galanna R/o.3198, Gowrishanker colony Jadcherla, Mahabubnagar district ..... PETITIONER AND The State Bank of India., rep.by its Branch Manager Mahabubnagar Branch, Mahabubnagar .....RESPONDENT 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 an appropriate writ order or direction more particularly in thenature of writ of mandamus declaring the action of the Respondent in issuing the auction notice dated 6.2.2009 published in Eenadu Daily News paper fixing the reserve pirce as Rs.23 lakhs without regard to the prevailing market value and also market value as assessed by the Sub.Registrar, Registration and Stamps, jadcherla as illegal, arbitrary,and violative of principles of natural justice and consequently direct the respondent abnk to consider the reserve price as assessed by the Sub-Registrar, Registration and Stamps Department, Jedcherla, and also the prevailing market value and pass Counsel for the Petitioner:MR.C.B.RAM MOHAN REDDY Counsel for the Respondent No.: MR.AMBADIPUDI SATYANARAYANA The Court made the following : THE HON'BLE MR JUSTICE V.ESWARAIAH and THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT PETITION No.4744 of 2009 ORDER: (per the Hon’ble Sri Justice V.Eshwaraiah) The petitioner, who borrowed amount from the respondent bank, questions the notice, dated 06-02-2009, issued by the respondent, fixing the reserve price as Rs.23,00,000/- on the ground that the prevailing market value of the property in question as per the basic value register of the Registration Department is about Rs.35,00,000/- and the debt due to the respondent Bank is Rs.23,00,000/- and, therefore, fixing of reserve price as Rs.23,00,000/- is illegal and unsustainable. It is stated that for non-payment of the borrowed amount, the Bank invoked proceedings under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short “SARFAESI Act”) and accordingly a notice, dated 10-02- 2007, under Section 13(2) of the SARFAESI Act was issued calling upon the petitioner to pay a sum of Rs.20,15,803/- along with interest within 60 days from the date of receipt of the said notice. Even after receipt of the said notice, the secured debt was not repaid and, therefore, after taking possession of the property in question under Section 13(4) of the SARFAESI Act, the impugned sale notice, dated 06-02-2009 was issued for sale of the property in question on 11-03-2009, fixing the reserve price at Rs.23,00,000/-. Learned counsel for the petitioner submits that fixation of reserve price at Rs.23,00,000/- is illegal and arbitrary. Insofar as the movable property is concerned, as per Rule 5 of the Security Interest Enforcement Rules 2002, (for short “the Rules”) the Authorized Officer shall obtain the estimated value of the movable secured assets and thereafter, if necessary, fix the reserve price in consultation with the secured creditor. Similarly, insofar as the immovable property is concerned, as per Rule 8(5) of the Rules before effecting sale of the immovable property, the Authorised Officer shall obtain valuation of the property from an approved valuer and in consultation with the secured creditor, fix the reserve price of the property. Learned counsel for the respondent submits that in the instant case, the Bank’s valuer has fixed the reserve price of the property in question as Rs.23,00,000/-. The reserve price of Rs.23,00,000/- is only minimum amount and below the said price, the property cannot be sold. There is no outer limit for offering the price for sale by the intending bidders. If the petitioner is interested, he can as well get the competitive bidders. However, if there is any illegality in the procedure, he can as well file an appeal under Section 17 of the SARFAESI Act before the Debt Recovery Tribunal. In fact, learned counsel for the respondent submits that the petitioner approached the Debt Recovery Tribunal and filed S.A.I.R.No.162 of 2008 and the Debt Recovery Tribunal granted interim stay on 19-05-2008 in I.A.No.551 of 2008 on condition of the petitioner depositing a sum of Rs.5,00,000/-, and as the said conditional order has not been complied with, the said I.A. was vacated. As there is no representation on behalf of the petitioner on 01-08-2008, the S.A.I.R. was dismissed on the very same day. Aggrieved thereby, the petitioner filed M.A.No.144 of 2008 and the same was adjourned to 30-03- 2009. Having regard to the facts and circumstances of the case and in view of the petitioner suppressing filing of S.A.I.R.No.162 of 2008, I.A.No.551 of 2008 in S.A.I.R.No.162 of 2008 and M.A.No.144 of 2008, we are of the opinion that the petitioner is not entitled for any relief. Accordingly, the writ petition is dismissed. There shall be no order as to costs. ________________ V.ESWARAIAH, J ________________________ VILAS V. AFZULPURKAR, J Dated: 06-03-2009 Prv ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1) 2 CD copies Form-NIC-OGS/WP{TRK}