IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE TWENTY SECOND DAY OF JUNE TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE GHULAM MOHAMMED and THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT PETITION NO : 4850 of 2007 Between: 1 V. Ramana S/o. V. Nanjappa, aged 51 yrs Occ: Proprietor of Navaratna Jewellers, 288/C, Bangalore and Tirumala Jewellers, At # 17,80 Ft. Road, BSK I Stage, Srinivasanagar, Bangalore, And Permanent Resident of D.No. 7-5-29, Brahmin Street, Chittoor, Chittoor District. 2 V. Eswaramma W/o. V. Ramana R/o. D.No. 7-5-29, Brahmin Street, Chittoor, Chittoor District. 3 V.R. Suresh S/o. V. Ramana R/o. D.No. 7-5-29, Brahmin Street, Chittoor, Chittoor District. 4 V.R. Nirmala W/o. C.R. Ravi R/o. D.No. 12/117, Brahmin Street, Chittoor, Chittoor District. 5 C.R. Ravi S/o. C. Ramaiah Chetty, R/o. D.No. 12/117, Brahmin Street, Chittoor, Chittoor District. 6 K. Ramesh Babu S/o. Venkatamuni Naidu R/o. D.No. 7/208, Brahmin Street, Chittoor, Chittoor District. ..... PETITIONER(S) AND 1 The Authorised Officer, Andhra Bank Under Act 54 of 2002 Zonal Office, D.No. 4/1, Anjaneya Swamy Temple Road, 2 The Branch Manager, Andhra Bank, Jayanagar Branch , D.No. 273 R. Mariappa Road, First Block, Near Ashoka Pillar, Jayanagar, Bangalore. .....RESPONDENT(S) 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 issue an appropriate writ or order or direction more particularly one in the nature of writ of Mandamus declaring the action of the 1st Respondent in issuing notice dt. 27-12-2006 under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (Act 54/2002) for Enforcement of Security Interest and reply notice dt. 22-2-2007 refusing to consider the representation submitted by the petitioners dt. 15-2-2007 is illegal, arbitrary, against the Principles of natural justice and the is contravention of Sec.13(3A) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (Act 54/2002) for Enforcement of security Interest and violative of Article 21 and 300-A of the Constitution of India and pass such other order or orders as this Hon'ble Court may deem fit and proper in the circumstances of the case. Counsel for the Petitioner:MR.S.S.BHATT Counsel for the Respondent : SMT.V.DYUMANI FOR R11.11.08,VAK- 1&2 The Court made the following : ORDER: (Per Hon’ble Sri Justice Ghulam Mohammed) This writ petition is assailing the legality and validity of the notice dated 27-12-2006 challenging under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (For short “the Act”) to review and consider the representation submitted by the petitioner on 15-02-2007 as being illegal under Section 13(2) of the Act. 2. There are altogether six petitioners and six properties have been mortgaged. This writ petition is filed by one V.Ramana and filed affidavit stating that he is the sole proprietor of Navarathna Jewellers situated opposite to Appollo convent, Kathriguppa, Bangalore, and also Tirumala Jewellers, Srinivasanagar, Bangalore, and he submitted that he availed open cash credit facility of Rs.25,00,000/- (Rupees twenty five lakhs only) from the 2nd respondent Branch to run Navaratna Jewellers and Rs.19,50,000/- to run Tirumala Jewellers in 2003 and 2004 respectively and the 1st petitioner herein also made bank guarantee of Rs.30,00,000/- (Rupees thirty lakhs only) and created primary security by hypothecation of raw materials of gold bar procured under B.G./L.S. gold and silver ornaments in trade/receivables thereon. The 1st petitioner along with other petitioners also created equitable mortgage of the house property at D.No.7-17/4, Rangachary Street, Chittoor, belonging to the 2nd petitioner, House property at D.No.7-17/2, Rangachary street, Chittoor belonging to 4th petitioner, house property at D.No.7-173/Rangachary street, Chittoor belonging to 3rd petitioner, house property at D.No.7/208, Brahmin street, Chittoor belonging to the 1st petitioner and house property at D.No.7/16, Rangachary Street, Chittoor belonging to first petitioner as collateral security for the credit facilities availed by the 1st petitioner in favour of the 2nd respondent Bank. The 1st petitioner submitted that due to unforeseen fluctuations in gold prices, he sustained heavy loss in his business and requested the 2nd respondent to reschedule or restructure the loan to enable him to run his business. While the matter stood thus, the 1st respondent issued notice dated 27-12-2006 under Section 13(2) of the Act for enforcement of the security interest calling upon the petitioners to pay Rs.54,63,408.89 (Rupees fifty four lakhs sixty three thousand four hundred eight rupees eighty nine paise only) with interest within 60 days from the date of notice otherwise the bank will take any one or more of the measures contemplated under Section 13(4) of the Act by stating that the loan has been classified as non-performing asset. 3. After receipt of the notice, the 1st petitioner submitted a representation raising several objections as to treat the loan as non- performing asset and requested the bank authorities to restructure or reschedule the loan. After that, the bank has issued a reply notice dated 22-02-2007 rejecting the request for restructuring or rescheduling the loan. Hence, this writ petition. 4. The 2nd respondent filed a detailed counter giving all the loan details. The 2nd respondent submitted that they have issued notice dated 27-12-2006 demanding the petitioners to pay a sum of Rs.54,63,408.89 (Rupees fifty four lakhs sixty three thousand four hundred eight rupees eighty nine paise only). Thereafter the respondent bank filed an application under Section 14 of the Act seeking assistance of the learned District Judge, Chittoor and the learned District Judge, Chittoor vide order dated 05-03-2008 directed the Tahsildar, Chittoor to give necessary assistance or take possession of the schedule property and handover the same to the authorized officer, and thereafter, the petitioner requested for compromise and accordingly the loan was approved for Rs.50,00,000/- (Rupees fifty lakhs only) subject to the adjustment of Rs.7,00,000/- (Rupees seven lakhs only) which was kept in ‘No lien” account and payment of Rs.5,50,000/- (Rupees five lakhs fifty thousand only) on or before 31-03-2008 and Rs.37,50,000/- (Rupees thirty seven lakhs fifty thousand only) on or before 30-06-2008. It was stated that the petitioner also failed to comply with the approved compromise amount. 5. Having regard to the facts and circumstances of the case, the point now for consideration is; Whether this court can entertain the writ petition filed against the notice under Section 13(2) of the Act? 6. It is to be noticed that as on today, there is no order passed under Section 13(4) of the Act and there is no cause of action for filing this writ petition. The notice issued under Section 13(2) of the Act is challenged to which, it is stated, that the petitioner has already given representations for restructuring and rescheduling the loan for which the bank has rejected. It is further stated that there are subsequent developments and the petitioner has deposited Rs.20,50,000/- (Rupees twenty lakhs fifty thousand only) and compromised proposals are still in progress. But, the learned counsel for the respondent bank contended that the time fixed by the Bank, for depositing of Rs.37,50,000/- (Rupees thirty seven lakhs fifty thousand only) as on 30-06-2008 has not been complied with, within the time fixed and therefore, compromise proposals stands cancelled. 7. However, having regard to the facts and circumstances of the case, we direct the petitioner to file a fresh representation within a period of two weeks from the date of receipt of a copy of this order, giving all the details and the respondent-bank shall consider the same and pass a reasoned order after giving an opportunity to the petitioner till such time Status-quo as on today shall be maintained. 8. With the above directions, the writ petition is disposed of. No costs. _____________________ GHULAM MOHAMMED, J June 22, 2009. _____________________ VILAS.V.AFZUL PURKAR, J DS Note: Issue C.C. In 2 days.