@#@#@#@#@#@#@ HONOURABLE SRI JUSTICE P.S.NARAYANA WRIT PETITION NO:23843 of 2007 DATED:06-02-2008 Between: Katta Venkata Mallikarjuna Raju ..... PETITIONER AND 1. Authorized Officer, Canara Bank, Bhimavaram Branch, Bhimavaram W.G.District and another. .....RESPONDENTS @#@#@#@#@#@#@ ORDER: This Court ordered notice before admission on 13-11-2007 and granted conditional order of interim stay. It is stated that the conditional order had not been complied with. 2 . Heard Sri Satyanarayana Nimmagadda, learned counsel representing the writ petitioner and Sri Deepak Bhattacharjee, learned counsel representing the respondents. 3. The writ petition is filed for a writ of mandamus declaring the action of the respondents in insisting the petitioner to vacate from his residential flat property bearing flat No.202 situated in 2nd floor, Rajyuvaraj towers, 3rd ward, Bhimavaram town, West Godavari District pursuant to possession notification dated 31-10-2007 published in West Godavari Edition of Eenadu Telugu Daily Newspaper as illegal, irregular, arbitrary, without jurisdiction and violative of the provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for brevity ‘the Act’) and rules framed thereunder and offends Articles 14, 21 and 300-A of Constitution of India and consequently direct the respondents not to dispossess the petitioner from his said flat property. 4 . The petitioner is the absolute owner, possessor and enjoyer of residential flat property bearing flat No.202 situated in 2nd floor, Rajyuvaraj towers, 3rd ward, Bhimavaram town, West Godavari District. He availed loan of Rs.10,00,281/- on 01-09-2005 for construction and purchase of the said flat property from the second respondent. The second respondent informed him at the time of granting loan to the effect that he should repay loan in monthly instalments at the rate of Rs.10,000/- per month for 15 years. The second respondent did not furnish him any copies of loan agreement or connected papers. 5 . Further it is stated that due to unfavourable conditions prevailed in business, the petitioner could not pay the instalments. The first respondent issued a possession notification dated 31-10-2007 published in West Godavari District Edition of Eenadu Telugu Daily Newspaper. It was alleged in the said possession notification to the effect that the petitioner had failed to repay the liability of Rs.10,00,281/- with contractual rate of interest at the rate of 12.25% from 01-09-2005 onwards. It was further alleged that the notional possession of the property was taken on 22-10-2007. Immediately after looking into the said notification, he rushed to first respondent with a request to drop any action in respect of said property, as the respondents did not issue any notice to him before the said notification. The first respondent orally gave ultimatum to the effect that the petitioner should vacate from his property immediately, failing which he would initiate coercive steps for petitioner’s eviction therefrom. 6 . It is also stated that the respondents did not issue any notice as contemplated under Section 13 (2) of the Act. Further, the respondents did not issue possession notice as contemplated under Section 13 (4) of the Act. The respondents only notified the possession notification in the newspaper as aforesaid. The allegation of taking notional possession is false. The flat is still in petitioner’s exclusive possession and enjoyment. 7 . It is also stated that the respondents have no power, authority or jurisdiction to vacate the petitioner from the possession of the said property. The respondents cannot claim for realization of entire loan since he would have further 13 years period for repayment. The respondents could claim only such amount as was defaulted instalments but nothing more. But the respondents notified the total liability repayable in 15 years. Thus, the action of the respondents in insisting the petitioner to vacate from his residential flat property bearing flat No.202 situated in 2nd floor, Rajyuvaraj towers, 3rd ward, Bhimavaram town, West Godavari District pursuant to possession notification dated 31-10-2007 published in West Godavari District Edition of Eenadu Telugu Daily Newspaper is illegal, irregular, arbitrary, without jurisdiction and violative of the provisions of the Act and rules framed thereunder and offends Articles 14, 21 and 300-A of the Constitution of India. In such circumstances it is stated that the petitioner constrained to file this writ petition for appropriate reliefs. 8. A counter-affidavit is filed by respondents 1 and 2. Several of the allegations had been specifically denied. It is averred that the petitioner had availed housing loan of Rs.10.00 lakhs on 17-08- 2005. Unfortunately, the loan was not repaid in terms of the loan agreement committing clear breach of contract and the account became non-performing asset. The loan was recalled and a demand notice was issued under Section 13 (2) of the Act on 26-06-2007. The said notice was acknowledged by the petitioner on 03-08-2007. From the date of service of the said notice though 60 days time was given to liquidate the liability, the petitioner did not choose to liquidate the liability. The petitioner also did not make any representation within the said period of 60 days for disposing the same in terms of Section 13 (3A) of the Act. In view of the above circumstances, the notice under Section 13 (4) of the Act was issued and pasted on the Board of the flat on 22-10-2007. But only constructive and symbolic possession was taken. The factum of taking possession in terms of Section 13 (4) of the Act was also published by way of publication in widely circulated dailies i.e., Eenadu and Hindu on 31-10-2007. There was sufficient compliance of Rule-8 and 9 of the Act. 9. It is also stated that the total outstanding liability as on 26- 06-2007 was Rs.10,00,281/- plus further interest as per contractual rate from 17-08-2005 till the date of full and final realization. The procedure laid down under the Act is followed in its perspective and there was no violation at any point of time. 10. Further, it is stated that against the proceedings under Section 13 (4) of the Act, the petitioner is having alternative remedy of appeal under Section 17 of the Act before Debts Recovery Tribunal. Further, the decision of the Supreme Court in Punjab National Bank v. O.C.Krishnan and others[1] had been referred to. 11. It is also further stated that once symbolic possession is taken by the respondents in terms of Section 13 (4) of the Act, the petitioners are under obligation to hand over the physical possession and in the alternative the respondents bank is at liberty to seek assistance of Chief Metropolitan Magistrate or Executive Magistrate under Section 14 of the Act. In the alternative, the respondents are also entitled to sell the mortgage security on as is where is basis. As there is no arbitrariness in proceedings against the security by the secured creditor, the petitioner is not entitled to seek judicial review in the present proceedings. 12. In the light of the specific stand taken in para 4 of the counter-affidavit in particular and also further in the light of the fact that the petitioner is having an alternative remedy of appeal under Section 17 of the Act aforesaid and in the light of the factual controversies involved in the present writ petition, liberty is given to the writ petitioner to agitate his rights, if any, and pursue the other legal remedies available to him in law. Except making this observation no further positive relief can be granted in the present writ petition. 1 3 . With the above observation, the writ petition is dismissed. No order as to costs. ------------------------ 06th February, 2008 SKM 06-02-2008: After the order is pronounced, the learned counsel representing the writ petitioner had brought it to the notice of the Court that the conditional order had been complied with and Rs.2,00,000/- (Rupees two lakhs only) had been deposited. It is needless to say that this ground also can be agitated by invoking appropriate remedy. ------------------------ 06th February, 2008 SSR [1] (2002) 6 SCC 569