IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE THIRTEENTH DAY OF MARCH TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH and THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT PETITION No.24773 of 2007 Between: Bismillah Tobaccos, Rep. by its Proprietor Shaik Abdul Salam, S/o. Shaik Mahaboob Ali, Aged 38 years, Occ: Business, R/o. H.No. 16-8- 486, Balajinagar, 6th Lane, Guntur. ..... PETITIONER AND 1 State Bank of India, Rep. by its Branch Manager, Bazar Branch, Guntur. 2 The Assistant General Manager, State Bank of India, Suryaraopet, Vijaywada. 3 Authorized Officer, State Bank of India, Bazar Branch, Guntur. .....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 to issue a Writ or any appropriate Writ or Writs or directions more particularly onein the nature of Writ of Mandamus declaring the notices dt. 6- 2-2007 and 27-10-2007 issued by the 1st respondent as illegal, arbitrary and unconstitutional and consequently direct the respodents to consider the request of the Petitioner for one time settlement scheme or under any of the concessions under the RBI relief package and be pleased to pass such other order as this Hon'ble Court may deem fit and proper in the circumstances of the case. Counsel for the Petitioner:MR.B.VIJAYSEN REDDY Counsel for the Respondent No.: MR.DEEPAK BHATTACHARJEE The Court made the following : THE HON'BLE MR JUSTICE V.ESWARAIAH and THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT PETITION No.24773 of 2007 ORDER: (per the Hon’ble Sri Justice Vilas V.Afzulpurkar) The petitioner seeks a Writ of Mandamus declaring the notices, dated 06-02-2007 and 27-10-2007 issued by the Bank seeking possession under Section 13(2) read with Rule 3 of the Security Interest (Enforcement) Rules, 2002 as illegal and arbitrary. The petitioner admits that he has obtained loan to a tune of Rs.8,00,000/- for Tobacco business in the year 1998 and he also admits that he mortgaged the property bearing No.8-2-11/1 with Asst.No.17381 in D.No.444 of Guntur District, Guntur City, for obtaining the said loan. He also admits that he committed default from the year 2001 onwards on account of unavoidable circumstances, as all Tobacco merchants suffered huge losses. He claims that he is entitled to rehabilitation package and applied to the Bank for granting any concession for repayment of the loan. At that stage, the petitioner received impugned notice, dated 06-02-2007 from the Bank for taking possession of the mortgaged property under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short “the SARFAESI Act”). The petitioner states that he has made an application, dated 08-03-2007, offering to settle the loan amount and the said application remained undisposed by the Bank. Based on the above averments, the present writ petition is filed challenging the notices as referred to above. The respondent bank filed a counter pointing out that the Bank had filed a suit O.S.No.4 of 2001 on the file of the Senior Civil Judge, Guntur and by an order in I.A.No.37 of 2001, a receiver was appointed to take possession of the hypothecated assets. While the said order was in force, the petitioner remained ex-parte in the suit and when the matter came up for plaintiff’s evidence, the Bank had filed an application to redirect the receiver to confirm the stocks lying in the godown. When the bank officials went for inspection of the godown, after filing the aforesaid application, they found that the petitioner broke open the locks of the godown by removing the locks placed by the receiver and shifted the stocks and other items to some other place and let out the godown to third parties and that the petitioner is earning rental income out of the same. It is also averred that the lessee of the godown is now running a factory and manufacturing plastic granules. Bank also stated that it had issued notice under Section 13(2) of the SARFAESI Act on 06-11-2006 and denied that the petitioner submitted any application for one time settlement and the application for giving any offer as alleged. As no reply had received nor payment was received from the petitioner, the Bank issued further notice under Section 13(4) the SARFAESI Act on 06-02-2007 and obtained constructive possession of the property and that the property was sold by public auction. It is only thereafter when the petitioner was requested to handover possession, he has filed a letter for one time settlement, which was not acceptable to the Bank, as the said offer was not in terms of the norms set by the Reserve Bank of India. We have heard both sides. From the averments of the petitioner and the respondent, as mentioned above, it is evident that the petitioner has questioned only consequential proceedings, after the bank followed the provisions of Section 13(2) of the SARFAESI Act on 13-04-2007. Further, admittedly, the petitioner has not given any reply or filed objections to the notice issued under Section 13(2) of the SARFAESI Act. The petitioner also does not dispute the loan as well as mortgage of the property. The averments in the counter affidavit particularly showing that the petitioner has broken the locks put by the receiver and let out the schedule property contrary to the same being in custody of the receiver are not controverted by the petitioner by filing any reply affidavit. This court, while issuing notice before admission on 22-11- 2007, had granted interim stay subject to the condition of depositing a sum of Rs.9,00,000/- within four weeks. The said order has also not been complied with. In view of the aforesaid conduct on the part of the petitioner and the fact that no ground is made out pointing out any infirmity in the impugned notices, the writ petition clearly lacks any merit and on the contrary is liable to be dismissed with costs. The writ petition is accordingly dismissed with costs quantified at Rs.10,000/-. ________________ V.ESWARAIAH, J ________________________ VILAS V. AFZULPURKAR, J Dated: 13-03-2009 Prv ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1) 2 CD copies Form-NIC-OGS/WP{SPJS}