HON’BLE SRI JUSTICE P.S. NARAYANA WRIT PETITION No.26981 of 2006 Date:11th February, 2008 Between: 1. B.V.L. Narasimha Rao and another. … petitioners And 1. State Bank of India, Rep. by its Branch Manager, A.P. Paper Mills Branch, Rajahmundry – 533 105 and 4 others. … Respondents * * * ORDER: This Court ordered notice before admission on 12.12.2006 and granted an order of status quo for a limited period and the same is being extended from time to time. This Court issued rule nisi on 29.10.2007 and extended the interim order until further orders. 2. The writ petition is filed for a writ of certiorari and quash the proceedings L.Dis.C1(M) 950/2006, dated 22.9.2006 and 09.10.2006 issued by the respondent No.3 as the same are issued contrary to the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, and without obtaining any permission from Debt Recovery Tribunal under Sec.19(1) of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and pass such other and suitable orders. 3. Heard Sri S. Sridhar, counsel representing the writ petitioners, Sri Deepak Bhattacharjee, learned Standing Counsel representing R- 1 and R-2 and the learned Assistant Government Pleader for Revenue. 4. Sri S. Sridhar, had taken this Court through the contents of the affidavit and the counter-affidavit as well and would maintain that in the facts and circumstances of the case the writ petition to be allowed. 5. On the contrary, Sri Deepak Bhattacharjee had taken this Court through the contents of the counter-affidavit and would maintain that the writ petition itself is not maintainable and the same is liable to be dismissed. 6. The first petitioner had sworn to the affidavit filed in support of the writ petition. It is stated that the petitioners had availed loan of Rs.30,50,000/- from the first respondent bank against various assets creating security for buying BEML Model BE220 LC Hydraulic Excavator from Bharat Earth Movers Ltd., Bangalore, and purchased the said machine on 13.3.1999. Ever since the date of purchase the machine started giving functional complaints and thereby the petitioners were unable to execute the work effectively. Since they sustained irreparable loss, the petitioners decided to close the business by making repayment of the loan amount to the respondent bank under O.T.S. Scheme and to that effect first petitioner gave a representation to the bank on 23.11.2002 and the same is pending. While so, the respondent bank had initiated proceedings against the petitioners by filing O.A.No.54 of 2005 before the Debt Recovery Tribunal for recovery of the loan amount. Subsequently the said O.A. was transferred from Debt Recovery Tribunal, Visakhapatnam to Debt Recovery Tribunal, Hyderabad on administrative grounds without giving any notice to the petitioners and the said fact was known to the petitioners only when the petitioners approached the Debt Recovery Tribunal, Vizag after noticing the proceedings issued by the Collector and District Magistrate. On receipt of the proceedings issued by the third respondent, first petitioner filed I.A.No.984 of 2006 and I.A.No.985 of 2006 praying to grant injunction restraining the respondents from proceeding further under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, and also to stay all further proceedings pursuant to the proceedings issued by respondent No.3. When the said I.As came up for hearing on 11.12.2006, the Presiding Officer of the Tribunal refused to take up the matter on the ground that he was counsel for the respondent bank and directed the petitioners to approach the Debts Recovery Appellate Tribunal at Chennai seeking transfer of the said O.A to Chennai Bench. Further it is stated that the proceedings issued by the third respondent dated 22.9.2006 authorizing the 4th respondent to take possession of petitioner’s property consisting of modern house constructed in 675 square yards of site bearing D.No.86-2-3, Manthena Gardens, Jawaharlal Nehru Road, Rajahmundry, East Godavari District, at the behest of the respondent bank is illegal, arbitrary and violaltion of Section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. When the O.A., filed by the respondent, bank was pending respondents 1 and 2 had to obtain permission from the Tribunal for proceeding under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, before invoking recovery proceedings, but the respondents 1 and 2 did not obtain the said permission from the Tribunal. In such circumstances the writ petitioners approached this Court praying for the relief specified supra. 7. Respondents 1 and 2 had placed before this Court the copy of news clippings dated 27.5.2006 published in Eenadu, E.G. District and Hindu, E.G. District, on the possession notice pertaining to immovable schedule property; Copy of letters of authorized officer of SBI dated 06.3.2006 issuing possession notice over immovable property; Copy of the proceedings of the Collector and District Magistrate, E.G. District, Kakinada dated 02.11.2006 to MRO, Rajahmundry; Copy of the letters of Chief Manager, SBI, dated 04.12.2006 addressed to MRO, Rajahmundry; Copy of the letter of Chief Manager, SBI, dated 04.12.2006 addressed to M.D., Sri Balajee security and Manpower Consultants, Rajahmundry; Copy of the letter of Branch Manager, SBI, dated 25.11.2006, addressed to MRO, Rajahmundry (undertaking letter); Copy of Form – (Rule-4(2) inventory, dated 12.12.2006 signed by the Authorized Officer, SBI; Copy of Form – (Rule-4(1) Panchanama signed by the Authorized Officer, SBI; Copy of the telegram dated 13.12.2006 sent to Branch Manager, SBI; Copy of the letter dated 21.10.2005 addressed to the petitioner-2 (Notice u/s 13(2) of SARFAESI Act; Copy of news clipping dated 9.3.2003 published in Eenadu, E.G. District, on the possession notice pertain to immovable schedule property; Copy of the order in W.P.No.22321 of 2003 and WPMP No.27921 of 2003 of Hon’ble High Court of A.P., dated 21.4.2003 with its enclosures. 8. The proceeding dated 22.9.2006 reads as hereunder: “L.Dis.C1(M)950/2006, Dt.22.9.2006 Collector’s Office, Kakinada Proceedings of the Collector & Dist. Magistrate, E.G. Dt., Kakinada Present: Sri M. Subramanyam, I.A.S., Sub:- The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Act 54/2002)- State Bank of India, Rajahmundry- Secured Assets of Sri BVL Narasimharao & B. Anil Kumar, Rajahmundry- Recovery of Assets under the said Act- Authorization of Mandal Revenue Officer, Rajahmundry (U) to assist in taking possession- Request- Reg. Ref:- 1. Reqn. of the Authorized Officer, State Bank of India, Rajahmundry. 2. Sec.14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. ORDER: The Authorized Officer, State Bank of India, Rajahmundry has requested in the reference 1st cited to issue orders to take possession of the scheduled property from the defaulter and to deliver the possession to their officials by enforcing the powers conferred u/s.14 of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Under the above circumstances and in exercise of powers conferred u/s.14 of the referred Act, the Mandal Revenue Officer, Rajahmundry (Urban) is hereby authorized to take possession of the schedules property and handover it to the bank authorities. SCHEDULE OF PROPERTY All that part and parcel of the property consisting of modern house constructed in 675 sq. yds of site bearing D.No.86-2-3, Manthena Gardens, Jawaharlal Nehru Road, Rajahmundry, E.G. Dt., belonging to Sri BVL Narasimharao bounded by North : 115’-0” Layout plot No.6 site South : 110’-0” Layout plot No.14 site East : 54’-0” Land in RS No.295 West : 54’-0” Layout 30’ Road //By order// Sd/- G. Jayasree, For Collector, E.G. Dt., Kakinada. 9. The proceeding dated 09.10.2006 reads as hereunder: L.Dis.C1(M)1064/2006, Dt.09.10.2006 Collector’s Office, Kakinada Proceedings of the Collector & Dist. Magistrate (I/c), E.G. Dt., Kakinada Present: Sri C. Sudharsan Reddy, I.A.S., * * * Sub: Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Act 54/2002)- State Bank of India, AP Paper Mills Branch, Rajahmundry- Defaulted Borrowers- Enforcement under Securitization Act- Assistance Required in taking physical possession of the mortgaged assets- Orders issued. Read:1. Requisition of the Authorized Officer, State Bank of India, AP Paper Mills Branch, Rajahmundry. 2. Sec.14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. * * * ORDER: The Authorized Officer, State Bank of India, AP Paper Mills Branch, Rajahmundry informed that they have initiated action under Securitization Act, 2002 by issuing Demand/Possession Notices to the defaulted borrowers, there is no response from the borrowers for clearing off the dues in their respective accounts. The Authorized Officer, State Bank of India, AP Paper Mills Branch, Rajahmundry requested assist the bank to take physical possession of the scheduled property under the rules laid down in SARFAESI Act 2002 for conducting Panchanama of the properties on a convenient date. Under the above circumstances and in exercise of powers conferred u/s.14 of the referred Act, the Mandal Revenue Officer, Rajahmundry Urban is hereby authorized to take possession of the scheduled property and handover it to the Bank authorities. SCHEDULE OF PROPERTY Residential building constructed in a site measuring 675 Sq. yards bearing D.No.86-2-3, Plot No.7, RS.No.291 & 292, Jawaharlal Nehru Road, Rajahmundry Boundaries: East : RS No.295 West : Layout 30’ Road South : Layout Plot No.14 North : Layout Plot No.6 //By Order// Sd/- G. Jayasree, For Collector E.G.Dt., Kakinada 10. In the light of the facts and circumstances and also the averments made in the affidavit filed in support of the writ petition and also the proceedings dated 22.9.2006 and 09.10.2006 referred to supra and several of the documents placed before this Court by the respondents which had been specified above, this court is of the considered opinion that the writ petition is not maintainable. However, liberty is given to the petitioners to pursue other legal remedies available to the petitioners. Except making this observation, no positive relief can be granted. 11. With the above observations, the writ petition is hereby dismissed. No order as to costs. ____________________ (P.S. NARAYANA, J) Date: 11th February, 2008. BSB