IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY SEVENTH DAY OF MARCH, TWO THOUSAND EIGHT ONLY PRESENT: THE HON’BLE MR. JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION No.2828 of 2008 Between: Sri Mallikarjuna Rice & Oil Mill, Ramagunda Village & Mandal, Godavarikhani, Karimnagar Dist. & another. … Petitioners AND A.P. State Financial Corporation, Rep., by its Managing Director, Chirag Ali Lane, Hyderabad & others. … Respondents Counsel for the petitioners : Sri P. Kamalakar Counsel for the respondents : Sri T. Durga Reddy This Court made the following: THE HON’BLE SRI JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION No.2828 of 2008 ORDER:- This writ petition is filed for a writ of mandamus to declare the inaction of the respondents in considering the representations of the petitioners for settlement of account under One Time Settlement (OTS) Scheme and issuing sale notice dated 24.01.2008 published in Eenadu Telugu daily dated 25.01.2008 in respect of item Nos.3 to 10 notified therein, as illegal and arbitrary. A sum of Rs.15 lakhs was sanctioned as loan to the petitioners by respondent No.1 – Corporation, out of which a sum of Rs.14,19,842/- was released to them. Since the petitioners admittedly committed default in repaying the substantial part of the loan amount, the respondents brought the mortgaged property, namely, the rice mill for sale in the year 2005. On 28.11.2005, the petitioners approached the respondents with certain proposals and considering the said representation, the seizure of the property was lifted by the respondents on 05.12.2005 and the petitioners were allowed to run the rice mill. As the petitioners failed to stand on the commitments made by them in the repayment of the rescheduled loan amount, the property was again seized and put to sale vide the impugned sale advertisement. The petitioners’ application for settling the loan amount under OTS scheme has not been considered on the ground that the value of the primary and collateral securities is Rs.49.35 lakhs as against the outstanding loan amount of Rs.25.70 lakhs as on 30.04.2007 and that therefore according to the OTS norms, they are not entitled for settlement of the account under the OTS scheme. At the hearing, Sri P. Kamalakar, learned counsel for the petitioners submitted that since there are three different collateral securities, the respondents may consider releasing some securities to enable the petitioners to sell them and repay the said amount. Learned counsel, however, failed to show any basis for this submission and he candidly conceded that the petitioners have no enforceable legal right for taking return of the securities, before the settlement of the loan account. Inasmuch as the petitioners admittedly failed to repay the outstanding loan amount and they are not eligible for being considered under OTS scheme, I do not find any reason to restrain the respondents from enforcing their statutory right of sale of the property covered by the primary security under the provisions of Section 29 of the State Financial Corporations Act, 1951. For the abovementioned reasons, the writ petition is dismissed. As a sequel to dismissal of the writ petition, WPMP.No.3646 of 2008 filed by the petitioners for interim relief is also dismissed. ____________________________ C.V.NAGARJUNA REDDY, J Date: 27.03.2008 ES