THE HON’BLE SRI JUSTICE NOUSHAD ALI WRIT PETITION No.21954 of 2007 BETWEEN: 1. Royes Industries Ltd., rep. by Managing Director B.K. Gurbani, and others. PETITIONERS And 1. Indian Overseas Bank Chandralok Complex, M.G. Road, Secunderabad – 500 003, rep. by its Assistant General Manager, and another. RESPONDENTS Counsel for the petitioners: Sri Addepalli Suryanarayana Counsel for the respondents: Sri A. Krishnam Raju The Court made the following: ORDER: The 1st petitioner, a registered company, has filed this writ petition seeking a direction to the 1st respondent Bank to handover the title documents deposited by it in respect of the residential building bearing premises Nos.156 to 159 (2-11-30) situated at Sardar Patel Road, Secunderabad, by receiving an amount of Rs.120.20 lakhs towards settlement of its dues and not to take any action pursuant to the letter of the petitioner dated 6.09.2007. The petitioner-company was sanctioned loan/credit facility, the outstanding of which was Rs.483.92 lakhs as on 29.01.2001. The amounts availed were secured by hypothecation of raw-materials, work in progress, finished goods and machinery, second charge on block assets of the Company, and equitable mortgage of the aforesaid premises. It is stated that the company could not flourish in its business for the reasons beyond its control and could not repay the amounts availed. Therefore, the account was classified as Non-Performing Asset (NPA) as on 31.03.2002. According to the Bank, the total dues as on 30.04.2005 aggregated to Rs.689.56 lakhs including the interest at contractual rate. The bank, therefore, initiated proceedings by issuing a notice on 6.05.2005 under Section 13 (2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (for short ‘SARFAESI Act’). In the meanwhile, it appears that the petitioner-company, in order to avail the scheme for One Time Settlement (OTS), approached the bank. Thereupon an agreement was reached for repayment of an amount of Rs.219 lakhs as against the book outstandings of Rs.338.97 lakhs as on the date of OTS proposal. The said OTS provided for payment of 20% of the amount within 10 days and the balance in 12 equal monthly installments payable on or before 31.08.2007. It is stated that on the default of the petitioner-company to remit the entire amount as agreed, symbolic possession of the house property was taken. It also appears that notwithstanding the aforesaid lapses, the petitioner-company came forward with a revised OTS proposal and the same was also accepted for a sum of Rs.200 lakhs. The said offer was accepted by the Bank subject to the condition of remitting the said amount on or before 15.10.2007. However, the petitioner-company again defaulted in honouring the said agreement. The petitioner-company would contend that it had made certain payments and the said payments were not given credit while fixing the dues at Rs.200 lakhs. It is on this premise that it is not liable to pay Rs.200 lakhs, the petitioner-company has filed this writ petition for the aforesaid relief, substantively disputing the correctness of accounts and the quantum of dues repayable. Heard Sri Addepalli Suryanarayana, learned counsel for the petitioners and Sri A. Krishnam Raju, learned counsel for the respondents, and with the consent of both the counsel, this writ petition is disposed of at this stage. The issues raised in the writ petition – whether the parties are bound by the OTS entered into between them and to what quantum of amount the petitioners are liable and due – are all the questions which need not be gone into in this writ petition in view of the submissions made by both the counsel during the course of arguments. Both the counsel would submit that the bank has already instituted proceedings in O.A. on 20.09.2009 before the Debt Recovery Tribunal for recovery of an amount of Rs.10 crores and 18 lakhs. It is also stated that proceedings have also been taken under the SARFAESI Act, which are presently at Section 13(4) stage. Therefore, the nature of controversy pleaded in the writ petition, which requires consideration of disputed questions of fact relating to accounts, cannot be gone into in the writ petition. Rather the petitioner-company can as well take all the defences either before the Debt Recovery Tribunal or by taking such steps as are available to it against the proceedings under Section 13(4) of the SARFAESI Act. The learned counsel for the petitioner-company at this stage would also agree that the proper course available to the petitioner- company is to pursue the said remedies. He would also submit that the petitioner-company would take steps by approaching either the Debt Recovery Tribunal or challenge the proceedings under the SARFAESI Act in an appropriate proceeding. He would apprehend that if physical possession of the house property is taken in the meanwhile, the remedies available to it would be futile. He would therefore seek to safeguard the interests of the petitioner-company until such time by directing to maintain status quo. The learned counsel would, however, submit that amounts shown as due have been boosted by the local branch officials. He would submit that several amounts paid were not given credit in an attempt to harm the interest of the petitioner. He would therefore, submit that these facts would come out only if the Head Office undertakes an enquiry into the accounts. Having regard to the aforesaid facts and circumstances, without expressing any opinion on the merits of the case, and in view of the fact that the 1st respondent-bank has already initiated proceedings, I am of the opinion that the relief sought for in this writ petition cannot be granted. However, considering the grievances expressed as above, I deem it appropriate to pass the following order. 1. The petitioner-company is at liberty to make a representation of its grievances to the Head Office of the 1st respondent-Bank with details of repayments and seek appropriate accounting of its dues. On such representation, the head office is at liberty to consider the same and take appropriate decision. 2. The petitioner-company is also at liberty either to approach the Debt Recovery Tribunal or challenge the proceedings initiated against it in an appropriate forum and canvas all its defences therein. 3. Both the parties shall maintain status quo in respect of the property bearing Nos.156 to 159 (2-11-30) situated at Sardarpatel Road Secunderabad, for a period of two months from today. Subject to the above, the writ petition is dismissed. There shall be no order as to costs. __________________ NOUSHAD ALI, J. 28th March, 2011 Js. Note: C.C. in one week.