THE HON’BLE SRI JUSTICE A.GOPAL REDDY AND THE HON’BLE SRI JUSTICE G.CHANDRAIAH W.P.NO.11696 OF 2007 ORDER: (Per the Hon’ble Sri Justice A.Gopal Reddy) The secured creditor–State Bank of India, filed this writ petition challenging the action of the first respondent–Tahsildar (Mandal Revenue Officer) Nizamabad, in releasing the movable property of maize and turmeric worth Rs.2,48,48,14,188/- in favour of the third respondent–M/s Mehek Feed Industries, through the impugned proceedings in A1/13171/2003 dated 1.6.2007 and 4.6.2007; and to declare the same as arbitrary and illegal. Respondents 4 to 6, who are subsequently impleaded, are the borrowers and they availed credit facility from the petitioner–Bank by mortgaging the immovable property and also stock in trade. As they failed to discharge the amounts, their loan accounts were classified as Non Performing Assets (NPAs), followed by a demand notice, dated 15.4.2005 under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the Act’), calling upon them to pay the loan amount specified in the notice and on failure to do so it was intimated that necessary action will be initiated in terms of Section 13(4) of the Act and not to transfer by sale, lease or otherwise the said secured assets detailed in Schedule-C. Schedule-C contains maize and turmeric bags whereas schedule-A and B contains immovable property. Since the respondents/borrowers have not cleared the loan, necessary notice under Section 13(4) and Rule 8 of 2002 Rules, were published in Enadu on 10.9.2006 and in Hindu on 12.9.2006, as contemplated under the Act. The third respondent, who is the lessee of the premises and dealing with maize and turmeric business, filed O.S.No.9 of 2005 before the District Judge, Nizamabad, against the borrowers, who mortgaged the properties leased out to him and the Bank, restraining them from interfering with his peaceful possession and enjoyment over the suit schedule property, premises bearing Municipal No.7-14-1309/4, Valmiki Nagar, Arsapally, Nizamabad. In the said suit he filed I.A.No.817/2005 seeking temporary injunction. The petitioner–Bank contested the matter, whereas the borrowers have not filed any counters. The second borrower – Jeevanlal Kataria, remained ex parte. The learned District Judge by order, dated 4.1.2003, dismissed the said I.A. The third respondent unsuccessfully challenged the order passed in I.A, in C.M.A.No.312/2006, which was dismissed by a learned single Judge of this court on 23.2.2007. On dismissal of the I.A., the petitioner–Bank filed an application before the District Collector on 6.3.2007 under Section 14 of the Act, seeking physical possession of the secured assets, stating that the property referred to in the notice under Section 13(2) of the Act has not yet been handed over by the borrowers. Along with the application, only immovable properties were mentioned at item Nos.1 to 5. The Collector, on filing such an application, by order dated 17.3.2007, directed the first respondent–Mandal Revenue Officer, to take possession of the mortgaged property in (1) Sy.Nos.2846 and 2842, admeasuring Ac.0-28 guntas, Ac.1-23 guntas, totaling Acs.2-11 guntas; (2), Sy.Nos.2858 and 2859, admeasuring Ac.0-15 guntas, Ac.0-07 guntas, totaling Ac.0-22 guntas; (3) Sy.Nos.2843, 2844, 2855 and 2857 admeasuring Ac.0-27, Ac.1-11 guntas, Ac.0-10 guntas, Ac.0-05 guntas, totaling Acs.2-13 guntas; (4) Sy.No.2845, admeasuring Ac.0-14 guntas; all the above said agricultural land is situate at Malapalli, Bodhan Road, Nizamabad, and (5) Plot No.17 (Agricultural Market Committee plot), municipal No.6-25-2412/17, admeasuring 400 sq.yards; and report compliance. The first respondent–Tahsildar (Mandal Revenue Officer), along with the above said immovable properties, also took into possession of stock in trade lying in the godown at item No.5 of the order of the Collector and handed over the same to the representatives of the petitioner–Bank. On seizing the goods, the third respondent made an application to the District Collector for release of stocks, which were not authorized to be seized under the orders of the Collector, dated 17.3.2003, claiming that he is the owner of the goods. On making such an application, the Collector called for remarks from the petitioner–Bank on 21.5.2007, to which the petitioner–Bank submitted remarks bringing forth the fact that the stock is also hypothecated, which is mentioned in Schedule-C to notice under Section 13 (2) of the Act, and the third respondent has nothing to do with the goods, since he failed to obtain any interim order in the civil court, which was confirmed by the High Court in the appeal. When the third respondent also made an application to the first respondent–Tahsildar, he passed an order on 1.6.2007, holding that the third respondent-tenant is the owner of the goods and accordingly requested the Bank to take steps to release the movable property. The Bank has issued reply, dated 4.6.2007 and without considering the same, the first respondent– Tahsildar passed order dated 4.6.2007 directing the petitioner–Bank to redeliver the movable property to the third respondent in the presence of the revenue and bank officials on the said date. Questioning the same, the present writ petition is filed contending that when the District Collector passed orders calling for remarks of the petitioner–Bank, release of goods by the first respondent in favour of the third respondent by breaking open the locks highhandedly, is arbitrary and illegal and the same is in disobedience to the orders passed by the District Collector. When the District Collector has no authority or jurisdiction to release the goods, the first respondent cannot assert the same and entertain the application from the third respondent and release the stocks belonging to the borrowers, which were hypothecated to the Bank, and which are taken possession under Section 14 of the Act, particularly, in view of the fact that the third respondent failed to get any order of injunction against the petitioner–Bank. This Court while admitting the writ petition on 11.6.2007 suspended the impugned order passed by the first respondent–Tahsildar. By that time as the goods worth Rs.40,000,00/- were released, the petitioner–Bank filed WPMP.No.1553/2007 for redelivery of entire stock and other movable properties to the Bank, which were delivered to the third respondent on 6.6.2007. The said WPMP was dismissed by order dated 12.2.2008 and on dismissal of the same, the petitioner–Bank filed WPMP.No.19257/2009 for directing the respondents whosoever concerned, to deposit an amount of Rs.40,00,000/- towards the value of the stock, which was illegally and high handedly delivered by the first respondent to the third respondent. The second respondent–District Collector filed counter admitting that the petitioner filed an application to secure the properties of respondents 4 to 6 in terms of the Act and accordingly the first respondent–Tahsildar has been directed to take the immovable properties under the cover of panchanama by proceedings dated 17.3.2007. Thereafter, the Tahsildar submitted a report on 19.5.2007 reporting that the property belonging to respondents 4 to 6 has been seized under the cover of panchanama on 15.5.2007 and handed over to the authorities of the petitioner–Bank. The third respondent filed a petition before him for release of stocks seized by the first respondent–Tahsildar and thereupon the Government Pleader, Nizamabad has been requested to give his opinion on the matter. On the opinion given by the Government Pleader, that the movable properties seized by the Tahsildar can be released in favour of the third respondent, the petitioner–Bank filed objection not to release the stocks stating that the third respondent is not the owner of the property and not entitled to release the stock, and the stock lying in the premises has been hypothecated to the Bank and requested to reject the petition filed by the third respondent. In the meantime before giving directions by the District Collector, the first respondent released the stock, for which disciplinary action has been initiated against him under CCA Rules. He stated that the Tahsildar is supposed to act as per the instructions of the District Collector, but he acted on his own accord and released the stock without following the procedure. On filing WPMP.No.19257/2009, the successive Collector filed a counter affidavit stating that the first respondent was only authorized to take possession of the secured assets i.e., immovable property alone, but not the movable property. The first respondent exceeded his jurisdiction in seizing the movable property beyond his authorization. The first respondent has released the same without prior permission and intimation to the Collector, and therefore, disciplinary proceedings have been initiated against the first respondent and the same is pending. Even before the interim order passed by this Court, the goods were released in favour of the third respondent. Sri S.R. Ashok, learned Senior Counsel appearing for the Bank contended that once the plea of the third respondent is negetived by the civil Court and confirmed by the High Court when the first respondent-Tahsildar, (Mandal Revenue Officer) attached the immoveable property along with the goods, which are also mortgaged with the petitioner-Bank as per schedule-C mentioned in the notice issued under Section 13(2) of the Act, releasing the same without obtaining instructions from the Collector before whom the Bank filed its objections on the claim made by the third respondent is arbitrary. When the earlier Collector filed a counter stating that the first respondent- Tahsildar ought not to have released the goods without obtaining orders from him, it is not open for the successive Collector, who filed counter in W.P.M.P.No.19257 of 2009, to take a different stand that in the order dated 17.03.2007 the Collector has not directed to take possession of the moveable property. When the goods are hypothecated with the bank which is evident from the notice under Section 13(2) of the Act, the release of goods by the first respondent without adjudicating the lean of the petitioner-Bank is arbitrary and illegal and liable to be set aside, and he sought to direct the respondents to deposit value of the goods. Learned Government Pleader appearing for respondents 1 and 2 contended that as per the requisition made under Section 14 of the Act by the petitioner-Bank only five items of immovable property were sought to be enforced for due recovery of the amount and there is no mention about the moveable properties. In view of the same, the Collector directed the first respondent-Tahsildar to take possession of the immovable property alone. In the absence of any directions to take possession of the moveable properties, seizing of both immoveable and moveable properties by the first respondent on 1.05.2007 for which there is no authorization, is not justified. When the third respondent filed a claim, the Collector called for objections from the petitioner-Bank. But without waiting for the order of the Collector, the first respondent has released the goods for which disciplinary action has been initiated against him. But there is no illegality in releasing the goods, which were not the subject matter of the proceedings under Section 14 of the Act by the District Collector. Sri B. Chandrasen Reddy, learned counsel appearing for the third respondent contended that the third respondent obtained licence from the Agricultural Market Committee in Form No.VIII, on 2.03.2005 for item No.5 of the immoveable property leased under registered lease deed dated 19.07.2000, showing the maize and turmeric purchased by them. Whereas respondents 4 to 6, surrendered their licence obtained from the Commercial Tax Department on 21.03.2005, 29.03.2005 and also intimated the ESI Corporation about the closure of M/s. Jalram Industries on 22.04.2005, which would also establish that the stock in Item 5, which were seized by the first respondent without there being any authorization from the Collector, belongs to the third respondent. Therefore the petitioner is not entitled to release of goods, which were rightly released in favour of the third respondent by the first respondent. It is not necessary for us to go into the propriety or otherwise of the first respondent in releasing the goods without there being any instructions/orders from the Collector, Nizamabad. When the claim petition filed by the third respondent before the Collector for release of stocks was pending, the Collector called for opinion from the Government Pleader. Whether the first respondent can release the goods in favour of the third respondent for which the petitioner bank filed objections, and whether the objections can be sustainable or not is a matter, which can be decided by the Collector. Suffice it to say that there is no authorization to seize the movable properties of the third respondent, lying in item 5 of the immoveable property. The certificate issued by the Collector on 17.03.2007 authorizes the first respondent-Tahsildar to take possession of five items of immovable properties and hand over the same to the representatives of the petitioner- Bank. In that view of the matter, seizing of goods stored in the premises by the first respondent is without any authority. For any action taken by the third respondent for the illegal seizure, the Department will be exposed. To avoid such unpleasing situation, the first respondent obtained opinion from the Government Pleader and released the stock. The criticism made by the learned Senior Counsel about the opinion expressed by the learned Government Pleader about the release of stocks. No exception can be taken for the honest opinion rendered by the learned Government Pleader since it is not the subject matter of attachment order passed by the Collector under Section 14 of the Act. In view of the same, the impugned order passed by the first respondent releasing the goods, does not suffer from any manifest illegality warranting interference of this Court. Accordingly the Writ Petition is dismissed. The parties are at liberty to work out their remedies before the appropriate forum. There shall be no order as to costs. ____________________ (A.GOPAL REDDY, J.) ___________________ (G. CHANDRAIAH, J.) 13th November, 2009. Js.