IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE THIRTIETH DAY OF MARCH TWO THOUSAND AND FIVE PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH WRIT PETITION NO : 21839 of 2003 Between: Mrs. Vidyullatha W/o.Mr.M. Shankar Rao R/o.# 321, Sri Saikrupa, 8th main HAL 3rd stage, Bangalore-560075 rep., by her Husband and the Power of Attorney Holder Mr.M. Shankar Rao ..... PETITIONER AND 1 Andhra Pradesh State Financial Corporation (Incorporated under State Financial Corporation's Act LXIII of 1951), Ranga Reddy (West) Branch D.No.5-9-194, II Floor, Chirag Ali Lane, Hyderabad-500001, rep., by its Assistant General Manager. 2 The General Secretary Gautami Society Regd.No.1833/99 Flat No.201, Sri Raghav Aparments, S.D.Road, Secunderabad-500003 .....RESPONDENTS 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 direct the Respondent No.1 Corporation herein to hand over the original Sale Deed dated August 26, 2003 registered as Document No.7696 of 1993 in the office of the District Registrar, Ranga Reddy District, belonging to the Petitioner while declaring that the notice dated May, 02, 2003 of the Respondent No.1 is null and void as being vitiated by fraud by the issuance of a Writ, more particularly in the nature of a Writ of Mandamus or any other appropriate wit, order or direction. Counsel for the Petitioner: MR.C.R.SRIDHARAN Counsel for the Respondent: MR.Y.N.LOHITA The Court made the following: ORDER: The petitioner purchased Plot No.63 in Survey Nos.190/P, 197, 198/P admeasuring 1066.66 sq.yards equivalent to 897.86 square meters situated at Kondapur Village, Seri Lingampally Mandal, Ranga Reddy District, vide sale deed dated 26.2.2003 from Gautami Society, the 2nd respondent herein. It is stated that the petitioner has not collected the original sale deed from the 2nd respondent and it appears that there was some mix-up at the office of the 2nd respondent society and it was said to have been misplaced and the petitioner was handed over a xerox copy thereof. Though the 2nd respondent promised to hand over the original sale deed, it has not handed over the same to the petitioner. While the matters stood thus, the petitioner wanted to sell the said property and issued public notice in newspapers on 30.1.2003 and, accordingly, sold the property in favour of one U.N.Prasad vide sale deed dated 26.2.2003. After selling the said property on 26.2.2003, the Andhra Pradesh State Financial Corporation, the first respondent herein, issued a letter dated 2.5.2003 to the petitioner stating that the first respondent Corporation has sanctioned term loan of Rs.14.60 lakhs and seed capital assistance of Rs.5.60 lakhs on 12.9.2001 to one B.Srinivasa Rao, promoter of M/s.Net Technologies & Solutions, Kukatpally, Hyderabad, for setting up unit for providing internet and other Computer Solutions Services at leasehold premises bearing Door No.6 & 12, Sai Krupa Complex, Bhagyanagar Colony, Kukatpally, and while disbursing the aforesaid term loan and seed capital collateral security had been created by depositing the original sale deed. On the said letter, the husband of the petitioner informed the Assistant General Manager of the respondent Corporation that there is no link whatsoever between the transactions referred to by the first respondent in the impugned letter dated 2.5.2003 and they were not at all in Hyderabad and, therefore, the question of depositing sale deed or giving collateral security in favour of B.Srinivasa Rao does not arise. It is stated that the alleged depositing of title deeds on 9.10.2001 is not at all correct as the petitioner left the country on 2.7.2001 and returned on 21.5.2002. It is further stated that the first respondent Corporation gave a reply to the petitioner by letter dated 28.5.2003 denying the statement of facts made by the petitioner. It is the case of the petitioner that the petitioner being resident of Bangalore never gave the address mentioned in the memorandum of title deed and there is fraud played on the petitioner by the said Srinivasa Rao and some mischief has taken place in the office of the 2nd respondent and, therefore, the property of the petitioner cannot be stated as collateral security said to have been given by the petitioner and the first respondent cannot proceed against the said property. Accordingly, the petitioner submits that he is entitled for return of the original document dated 26.8.2003 registered as Document No.7696 of 1993 in the office of the District Registrar, Ranga Reddy District. The first respondent Corporation has filed counter affidavit stating that it has sanctioned a term loan of Rs.14.60 lakhs and a further sum of Rs.5.60 lakhs as soft loan in favour of B.Srinivasa Rao to enable him to set up a unit for providing Internet Service under the name and style of M/s.Net Technologies and Solutions on 12.9.2001 at Kukatpally. The said loans sanctioned by the respondent Corporation were duly secured by hypothecation of the machinery acquired and by provision of a collateral security of urban immoveable property in a sum of Rs.14.90 lakhs and the petitioner has given the plot bearing No.63 covered by the said sale deed dated 26.8.1993 as collateral security. Therefore, the petitioner had duly deposited the sale deed and further executed the loan security documents duly securing the loan sanctioned and disbursed by the respondent Corporation. The petitioner has thus created an equitable mortgage and further executed the title deeds with the Corporation on 9.10.2001 and the loanee B.Srinivasa Rao had also executed hypothecation deed hypothecating the equipment acquired with the funds provided by it and completed the legal formalities. The respondent Corporation has released a sum of Rs.19,64,925/- in respect of term loan and soft loan sanctioned by it. It is stated that when an inspection was made by the first respondent Corporation, it was noticed that the machinery and other equipments acquired by the loanee were found to be missing and upon noticing the same, the Corporation immediately addressed a letter to the loanee and the said loanee had failed to respond to the same. Therefore, the respondent Corporation lodged a criminal complaint before the police and it is pending investigation. The respondent Corporation has addressed a letter dated 2.5.2003 calling upon the petitioner to clear the outstanding dues as per the terms and conditions of the loan agreement as the original loanee committed default in payment of amounts. Pursuant to the letter the husband of the petitioner made a representation stating that the petitioner did not deposit any title deeds with the Corporation and the petitioner is nothing to do with the loan transactions obtained by the said Srinivasa Rao and further stated that the petitioner after giving paper notification sold the said property on 26.2.2003 in favour of U.N.Prasad and, therefore, the petitioner is entitled to get back the original sale deed which is in the hands of the first respondent Corporation. The learned counsel appearing for the petitioner has cited several judgments of this Court as well as the Apex Court. I am unable to accept the contentions of the learned counsel as the allegations made by the petitioner have not been accepted by the first respondent Corporation. The respondent Corporation has clearly disputed and denied the averments in the affidavit as regards the contention that the petitioner has not made any deposit of title deeds or execution of memorandum of title deeds. It is the specific case of the first respondent Corporation that the petitioner has created an equitable mortgage and executed the memorandum of deposit of title deeds on 9.10.2001. Therefore, the respondent Corporation has clearly disputed the contentions of the petitioner. The petitioner has not made the original loanee B.Srinivasa Rao as a party to this writ petition. In the absence of any regular trial, it cannot be said that the said Srinivasa Rao has played fraud on the petitioner and whether the 2nd respondent society has not handed over the original title deeds to the petitioner and how the original title deeds were placed in the hands of Srinivasa Rao. If really any fraud has been played, it is for the petitioner to plead and prove that the signature of the petitioner on the papers executed by her in the memorandum of title deeds while giving collateral security and other relevant documents said to have been offered by the petitioner in favour of the first respondent Corporation. It is difficult to believe the version of the petitioner and, therefore, I am of the view that disputed questions of fact cannot be decided in this writ petition filed under Article 226 of the Constitution of India. The only remedy available to the petitioner is to file a Civil Suit and for the action taken under Section 29 of the State Financial Corporation Act, no writ can be issued against the said Corporation unless there is statutory violation or fraudulent action on the part of the State Financial Corporation. Therefore, I am of the opinion that the petitioner is not entitled for any relief in the writ petition. The writ petition is, accordingly, dismissed giving liberty to the petitioner to approach the Civil Court to establish the alleged fraud said to have been played against her. No order as to costs. _________________ (V.ESWARAIAH, J.) 30.3.2005 kpr To 1 The Assistant General Manager, Andhra Pradesh State Financial Corporation, Ranga Reddy (West) Branch, D.No.5-9-194, II Floor, Chirag Ali Lane, Hyderabad-500001 2. 2 copies to Mr.Y.N.Lohita, S.C. for A.P.S.Financial Corporation. 3. 2 C.D. copies