THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE FIFTH DAY OF FEBRUARY TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH AND THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT PETITION No: 982 of 2008 BETWEEN: 1 Badugu Rama Devi W/o. Late Ravi Kumar, R/o.Seetharmmadara Visakhapatnam. 2 Badugu Narayana Sree Harsha S/o.Late Ravi Kumar. 3 Badugu Sreekar S/o.late Ravi Kumar, being minors rep.by their mother and natural guardian 1st petitioner. 4 Nerella Suguna W/o. Appalaswamy, R/o. Narsipatnam, Visakhapatnam District. 5 Badugu Ramana Kumar S/o.Late Suryanarayana, R/o. Narsipatnam Visakhapatnam District. 6 Katta Padmavathi W/o. Siva Prasad, R/o. Bhimavaram, West Godavari District 7 Badugu Udaya Bhaskar Rao S/o. late Suryanarayana, R/o. Narsipatnam Visakhapatnam District. ... PETITIONERS AND 1 State Bank of India, rep. by its Branch Manager ADB Narsipatnam Branch, Narsipatnam, Visakhapatnam District. 2 The Authroised officer, State Bank of India, Narsipatnam Branch, Narsipatnam, Visakhapatnam District. ...RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court may be pleased to issue writ of mandamus or any appropriate writ order or direction declaring the high handed action of the respondents in putting the mortgaged property i.e. vacant site measuring 687.50 sq. yards in Sy.No.265 assessment No.3781 situated at Muchimilli Village, H/o. Ramachandrapuram now situated within the Municipal limits of Ramachandrapuram, East Godavari District without following the provisions contemplated under law as published in Andhra Jyothi Daily Telugu paper in District Edition, East Godavari dated 11.12.2008 as illegal, arbitrary, high- handed and violative of principles of natural justice and for a consequential not to confirm the auction sale of the above mortgaged property in favour of the third party by enabling the petitioners herein to pay the remaining outstanding loan amount to the respondents herein to release of the mortgaged property and to pass such other order or orders. Counsel for the Petitioners: MR.CH.DHANAMJAYA Counsel for the Respondents: MR.DEEPAK BHATTACHARJEE The Court made the following: ORDER: (per Hon’ble Sri Justice Vilas V. Afzulpurkar) Petitioners are challenging the action of the respondents in proceeding against the property, being a vacant site of 687.50 sq. yards in Sy.No.265 at Muchimilli Village H/o. Ramachandrapuram, East Godavari District. 2. Petitioners claim in the affidavit that they are the legal heirs of late Ravi Kumar, who borrowed an amount of Rs.4,37,800/- in 1997 towards term loan and credit loan for running an industry. For the purpose of the aforesaid loan, the aforesaid vacant site, which is the subject matter of the writ petition, which belonged to the mother of the borrower, was given as guarantee by mortgaging the same. The petitioners allege that the said borrower died on 22.05.2002 and thereupon as there was nobody to look after the unit, the unit had to be closed down. Thereafter, the mother of the borrower also died on 17.01.2004. The petitioners allege that they were unaware of the existing over-dues on the loan obtained by the borrower as aforesaid and when they contacted the Branch Manager of the first respondent bank, they were informed of outstanding dues of Rs.9,84,000/-. Thereafter, the petitioners have given a letter dated 05.01.2008 whereby the petitioners have deposited a sum of Rs.2,00,000/- and further offered to pay the total amount of Rs.7,50,000/- towards full and final settlement of loan account. The petitioners allege that while such was the position, the second respondent published auction notice in Andhra Jyothi Daily dated 11.12.2007 and the vacant site referred to above was brought to sale. The petitioners allege that while they were prepared to pay the entire loan amount the action of the respondent – bank in publishing the property for sale is wholly unwarranted. They have accordingly questioned the said action by way of this writ petition. 3. On 23.01.2008, while issuing notice before admission, this Court had granted interim direction not to confirm the auction with regard to the aforesaid vacant site on condition that the petitioners deposit a sum of Rs.2.80 lakhs within a period of four weeks. When the matter came up on the last occasion, We were informed that the said interim direction has been complied with and the learned counsel for the petitioners also confirmed that the petitioners are ready and wiling to pay the balance amount outstanding in the said account towards full and final settlement, as such, the auction, which has merely been held and which is not confirmed, may be cancelled. 4. Learned counsel appearing for the respondent bank also submitted that the loan account, which is outstanding against the borrower’s name is paid in part by the petitioners on the earlier occasions and if they are willing to pay the balance amount, as the auction is not confirmed, the sale of the vacant site need not be proceeded further. 5. Keeping in view the facts and circumstances of the case and the willingness expressed by the petitioners even as early as on 05.01.2008 by filing a written representation before the bank that they are willing to pay and discharge the loan amount by undertaking to pay Rs.7.50 lakhs and actual payment of Rs.2 lakhs to enable the bank to consider the representation, establishes their bonafides. The petitioners have also complied with the interim order passed by this Court and even now a statement is made before the Court that they are willing to pay the balance amount. 6. In these circumstances, We deem it appropriate to direct the respondents to inform the petitioners the balance outstanding, which is payable by them, after giving due credit to the amounts already paid by them. On such intimation, the petitioners shall arrange and pay within four (4) weeks from today the balance amount. In the event of the petitioners complying with the aforesaid direction, the respondent bank shall treat the auction as cancelled and refund the amount, if any deposited, to the auction purchaser. In the event of default on the part of the petitioners to pay the amount as aforesaid, the bank shall be free to proceed further with the auction already conducted by issuing confirmation of the said auction and receive the balance consideration from the auction purchaser. With the above directions, the writ petition is accordingly disposed of. There shall be no order as to costs. ______________ V. ESWARAIAH, J _____________________ VILAS V. AFZULPURKAR, J February 5, 2009 DSK