THE HON'BLE SRI JUSTICE GHULAM MOHAMMED and THE HON’BLE SRI JUSTICE N. RAVI SHANKAR WRIT PETITION No.30684 of 2010 ORDER: (per HON'BLE SRI JUSTICE GHULAM MOHAMMED) Petitioners who are five in number have filed this writ petition for a writ of certiorari or any other appropriate writ or order to call for the records relating to the order dated 19.01.2010 passed in Crl.M.P.No.296 of 2010 on the file of the Chief Metropolitan Magistrate, Vijayawada, Krishna, whereby and whereunder the said learned Magistrate appointed an Advocate- Commissioner under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Sercurity Interest Act, 2002 (SARFESI Act). 2. The fifth petitioner Smt G.Dhanalakshmi filed affidavit in support of this writ petition and by way of interim relief claimed in WPMP No.39052 of 2010 she prayed for delivery of possession of the property belonging to her on the ground that it was forcefully taken possession from her on 22.11.2010 by the Advocate- commissioner. This fifth petitioner either in the writ petition or in the WPMP No.39052 of 2010 did not describe as to which property is owned by her that was forcefully taken possession from her and of which she is now claiming possession. 3. It may however be noted that in the order passed in the above mentioned Crl.M.P.No.296 of 2010 by the CMM, Vijayawada, five items of properties described in A schedule to F schedule appended to the said order are given. It is seen that the property described in E schedule is stated as belonging to Smt Guttikonda Dhanalakshmi w/o Dandamudi Srinivasa Rao who is the fifth petitioner herein. No interim relief is claimed with regard to the properties of the other four petitioners. 4. The brief facts of the case are that all the petitioners in this writ petition including the fifth petitioner herein stood as guarantors/ mortgagors for the loan advanced by the first respondent Bank to one M/s.Mahayogini Tyres represented by its proprietor Y.Jogeswara Rao, Vijayawada. As the borrower could not repay the loans as agreed, the first respondent-Bank issued notice dated 03.09.2009 under Section 13(2) of the SARFESI Act and ultimately put up the properties of the borrower and the guarantors to be sold in auction to be held on 11.02.2010. Aggrieved by the same, the petitioners earlier filed W.P.No.398 of 2010 and this Court in that Writ Petition gave a direction to the petitioners to pay an amount of Rs.25,00,000/- and also directed the respondents to proceed with the sale but not to confirm it till 20.02.2010. The borrower M/s.Mahayogini Tyres also filed W.P.No.3567 of 2010 against the proceedings taken by the Bank under Section 13(4) of the SARFESI Act and this Court granted stay on 18.02.2010 but subsequently dismissed the said writ petition on 19.03.2010 since the borrower approached the Debt Recovery Tribunal, Visakhapatnam (DRT), and obtained the stay there for the sale of properties in I.A.No.105 of 2010 before the DRT and as that stay was in force. 5. At this juncture it must be mentioned here that the first respondent Bank has also filed counter giving certain details. In the counter it is stated that the borrower has filed appeal under Section 17 of the SARFESI Act i.e. S.A.No.44 of 2010 and filed the above mentioned I.A.No.105 of 2010 in it for stay and the DRT granted stay only in respect of the borrower’s properties. According to the Bank, the above W.P.No.3567 of 2010 was filed by the borrower during the pendency of the above stay granted by the DRT and that writ petition was dismissed as stated supra. The contention of the fifth petitioner is that the stay granted by the DRT in I.A.No.105 of 2010 in S.A.No.44 of 2010 was in respect of all the properties including the fifth petitioner’s property. On the other hand, the contention of the Bank is that the stay was restricted only to A & B schedule properties mentioned in the order dated 19.01.2010 in Crl.M.P.No.296 of 2010 by the CMM, Vijayawada. 6. It is then stated in the counter that the first respondent Bank preferred a first appeal before the Debt Recovery Appellate Tribunal, Chennai, in M.A.(SA)No.264 of 2010 and that the said appeal is still pending. The version of the Bank is that the stay was granted by the DRT, Visakhapatnam, only in respect of A & B schedule properties shown in Crl.M.P.No.296 of 2010 by the CMM, Vijayawada, whereas the contention of the petitioners is that the stay was in respect of all the properties shown as C to G schedules in the Crl.M.P.No.296 of 2010. The version of the Bank is that as there was no stay in respect of the above mentioned C to G schedule properties and the borrower’s appeal i.e. S.A.No.44 of 2010 related only to the properties mentioned in A & B schedules of the demand notice and also Crl.M.P.No.296 of 2010 it proceeded with the sale of properties covered by C to G schedules and sold the properties shown in C, E to G schedules and also confirmed the sale in favour of the purchasers by issuing sale confirmation letters on 23.02.2010 and also credited the sale proceeds to the loan account. 7. It is then stated by the Bank that after the above sale, the borrower filed I.A.No.260 of 2010 in S.A.No.44 of 2010 seeking stay of further proceedings in relation to C to G schedule properties also. The DRT, Visakhapatnam, did not take up that I.A. for hearing and held that the main appeal filed by the borrower itself would be taken up for disposal on 15.04.2010 and directed the Bank to maintain status quo in respect of confirmation/ execution of sale certificates i.e. in respect of C to G schedule properties also. The further version of the Bank is that as the S.A. of the borrower could not be taken up for hearing, it pursued its second appeal before the Debt Recovery Appellate Tribunal, Chennai, which is filed against the stay order passed in I.A.No.105 of 2010. Thereafter, in that appeal, the Appellate Tribunal at Chennai made it clear that the earlier interim stay granted by the DRT in respect of borrower’s properties shall continue and directed the DRT to dispose of the borrower’s appeal. It is then stated by the Bank that thereafter a clarification was sought in I.A.No.260 of 2010 by the borrower regarding the properties in respect of which stay granted by it operated. It is stated by the Bank that the DRT, Visakhapatnam, by its docket order dated 15.09.2010 clarifying that the stay is restricted only to A & B schedules and that there is no stay or status quo for the remaining property. The Bank’s counsel says that the A & B schedule referred to in the above clarification order pertain to A & B schedule properties shown in the sale notification and also in the schedules appended to Crl.M.P.No.296 of 2010 on the file of the CMM, Vijayawada. 8. The contention of the petitioners is that the first respondent Bank misled the DRT, Visakhapatnam, in getting the above clarificatory order but the contention of the Bank is otherwise. The petitioners say that subsequently the DRT, Visakhapatnam, passed another docket order on 20.09.2010 keeping its order dated 15.09.2010 in abeyance and then posted the matter to 30.10.2010 The Bank’s contention however is that ultimately the DRT, Visakhapatnam, passed an order on 12.11.2010 clarifying that S.A.No.44 of 2010 of the borrower was filed only in respect of A & B schedule properties shown in the sale notification and mentioned in the Crl.M.P.No.296 of 2010. A copy of this order is filed by the Bank’s counsel in the material papers filed along with its counter and it is at page 77 of the said material papers. 9. The petitioners’ contention that the stay granted by the DRT, Visakhapatnam, in the borrower’s appeal i.e. S.A.No.44 of 2010 operated for A to G schedule properties cannot be accepted in the face of the order dated 12.11.2010 of DRT, Visakhapatnam, a copy of which is filed by the Bank’s counsel and which is not disputed. The petitioners counsel in the course of arguments relying upon the pleadings in the petition stated that the proceedings before the DRT, Visakhapatnam, and the Appellate Tribunal are not to the knowledge of the petitioners and therefore they are not binding on them. There is no force in this contention for the simple reason that the fifth petitioner or the other petitioners did not file any appeal before the DRT, Visakhapatnan, and the DRT’s order dated 12.11.2010 finally show that the stay operated only for A & B schedule properties which are shown as belonging to Smt Yarlagadda Sridevi who is the wife of Yarlagadda Yogeswara Rao, who is the borrower. 10. The learned counsel for the petitioner then argued again basing on the pleadings that the CMM, Vijayawada, in his order passed earlier on 29.06.2010 directed the advocate-commissioner to take possession of the properties i.e. A to G schedule mentioned in the said order and made the warrant returnable by 25.02.2010 and went on extending the date for execution of the warrant up to 28.10.2010 and this is not permissible. It is also pointed out that there is no procedure to appoint an advocate- Commissioner to take possession of the properties. There is no force in either of the above contentions. It may be noted that a perusal of Section 14 of the SARFESI Act shows that the CMM is given the power to take possession of the properties on the application of the secured creditor and hand them over to him and for that purpose the CMM himself cannot be expected to go to the property and take possession of it. Section 14(2) of the SARFESI Act says that for securing compliance with Section 14(1) the CMM may take such steps as are necessary and those steps include the appointment of an advocate-commissioner to take possession of the property on his behalf and thus an advocate-commissioner must be held to be an arm to the CMM in that behalf and therefore there is nothing wrong CMM appointing advocate-commissioner to take possession of the properties. Then coming to the other contention that the time cannot be extended for execution of the warrant, it may be noted that when there is a stay by a competent authority prohibiting the doing of the thing sought to be done by the warrant, the warrant has to be kept in abeyance and the matter can be adjourned waiting for the revocation of the stay. In this case, it is clear that the final clarification was given by the DRT, Visakhapatnam, by its order dated 12.11.2010 but even prior to that the record shows that the stay granted by the said Tribunal in the appeal of the borrower operated only for A & B schedule properties. The case of the Bank is that even earlier it sold C, E to G schedule properties and confirmed the sales in favour of the auction purchasers on 23.02.2010 and what was subsequently done was only clarificatory in nature and showed that there was no obstruction for the sale of C, E to G schedule properties. The fifth petitioner’s property is shown as E schedule property in the sale notification and as well as in the schedules appended to the CMM’s order in Crl.M.P.No.296 of 2010. 11. The learned counsel for the petitioner relied upon a judgment of the Madras High Court given in V. NOBLE KUMAR vs. THE AUTHORISED OFFICER, STANDARD CHARTERED BANK[1]. The proposition laid down in the said decision is for invoking the power of the Chief Metropolitan Magistrate under Section 14 of the SARFESI Act, the secured creditor should follow the procedure prescribed for under Section 13(4) of the SARFESI Act and that Section 14 of the said Act cannot be invoked indiscriminately without following the procedure under Section 13. This has no relevance to the case on hand. 12. It may be noted that in the petition filed before the CMM under Section 14 of the SARFESI Act, the first respondent Bank mentioned about the notice given under Section 13(2) of the said Act and as there was no response from the borrower and the other respondents i.e. guarantors it has got a right to proceed under Section 13(4) of the SARFESI Act to take possession of the properties. It is then stated in para-5 of the writ petition that the Bank anticipates a strong resistance from the respondents and therefore it sought the aid of the CMM under Section 14 of the SARFESI Act. It should be noted that the record shows that as the borrower did not repay the loan the first respondent issued a notice under Section 13(2) of the Act on 03.09.2009 and thereafter issued a notice under Section 13(4) of the said Act to take possession of the properties and initiated steps. 13. It is on record that the borrower in S.A.No.44 of 2010 before the DRT, Visakhapatnam, and first obtained an order of stay in respect of A & B schedule properties and the Bank also filed an appeal before the Debt Recovery Appellate Tribunal against that order. Subsequently, there was some confusion regarding the scope of the stay granted by the said Tribunal and ultimately on 12.11.2010 in S.A.No.44 of 2010 the Tribunal clarified that the stay operated only in respect of A & B schedule properties which belong to the wife of the borrower and not in respect of C to G schedule properties. In the meanwhile itself, as already mentioned supra, as the original stay granted by the DRT, Visakhapatnam, did not cover C to G schedule properties in the appeal preferred by the borrower the first respondent Bank sold away C and E to G properties and confirmed the sales also. These aspects were already mentioned supra. What should be noted is that the act of the first respondent Bank in selling C and E to G schedule properties is finally held to be valid because of the clarificatory order of the DRT, Visakhapatnam, passed on 12.11.2010. Thus, the warrant was kept pending execution because of the above proceedings and therefore the petitioners contention in this behalf cannot be accepted. The fifth petitioner’s property is shown as E schedule property and for the aforesaid reasons the sale of her property cannot be said to be invalid. 14. Accordingly, for the aforesaid reasons we find no merits in this writ petition and hence it is dismissed. No costs. ___________________________ GHULAM MOHAMMED, J. _______________________ N. RAVI SHANKAR, J. 15th December 2010 KA/CVRK [1] WP No.4600 of 2010 dated 27.07.2010 (http://www.indiankanoon.org/doc/444012)