IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY NINTH DAY OF OCTOBER TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE A.GOPAL REDDY and THE HON'BLE MR JUSTICE K.C.BHANU WRIT PETITION NO : 16797 of 2009 Between: Mallapu Nirmala Devi ..... PETITIONER AND The Chief Manager, State Bank of India, Vedayapalem Branch, Nellore, G.T. Road, Nellore & 2 Others. .....RESPONDENT The Court made the following : HON’BLE SRI JUSTICE A. GOPAL REDDY AND HON'BLE SRI JUSTICE K.C.BHANU WRIT PETITION No. 16797 OF 2009 ORDER: (Per Hon’ble Sri Justice A. Gopal Reddy) The petitioner obtained housing loan of Rs.15 lakhs from the respondent-Bank for construction of building which is repayable with interest at the rate of 1.5% below the State Bank Medium Term Loan rate subject to minimum of 11.5% per annum of floating rate of interest which would vary from time to time as per the Reserve Bank of India guidelines. The said loan is repayable in 144 equal monthly installments of Rs.12,000/- starting from June, 2003. However, as the petitioner committed default in payment of monthly installments, the respondent-Bank issued demand notice as contemplated under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘Act’) on 26.11.2007 calling upon the petitioner to repay a sum of Rs.18,79,200/- with further interest, expenses and costs. In spite of the said notice, the petitioner did not choose to pay the said amount, but filed the present writ petition contending that no such notice as contemplated under Section 13(2) of the Act was issued. Further it is the case of the petitioner that her unmarried daughter-Aruna was having mining lease hold rights with effect from 1999 in Silica Mines at Yerur Village in Chillakur Mandal, Nellore District, but in view of establishment of krishnapatnam Port, the Government cancelled the said lease hold rights in 2006, due to which, her family sustained loss of Rs.6 lakhs being the investment made in mines besides loss of Rs.5 lakhs every year towards the income expected from the mines. Further her husband was engaged in providing computer services in the name of M/s.Globe Data Management Pvt. Ltd. to the first respondent-Bank local head office at Hyderabad and used to get income ranging from Rs.10 to 12 lakhs per annum but in view of introduction of Core Banking Solutions in the respondent-Bank, the Bank dispensed the services of M/s.Globe Data Management Pvt. Ltd. and thus, due to the loss of income from the mines and income from M/s.Globe Data Management Pvt. Ltd., the petitioner’s family is in financial crisis. She also pleaded that she is aged 56 years and her husband is aged 64 years and that the house which is mortgaged to the respondent-Bank is the only residential house to the family of the petitioner. While so, she was informed by the officials of respondent- Bank that the first respondent is trying to take possession of the property and trying to sell the same for realization of the deus under the Act. Thereafter, she requested the respondent-Bank to convert the housing loan into Reverse Mortgage loan or alternatively, reschedule the liability in the account or to treat the overdue installments as a separate term loan repayable in 10 years. Since the request of the petitioner has not been considered by the respondent-Bank, she filed the present writ petition for issuance of a writ of mandamus declaring the action of the respondents in proceeding to take physical possession of the house property of the petitioner as arbitrary, illegal, violative of provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and against the principles of natural justice, and consequently direct the respondent to consider the representation of the petitioner, dated 6.8.2009 to convert the existing liability of housing loan account as Reverse Mortgage loan or in the alternatively to reschedule the outstanding liability in the loan accounts as a term loan that would be repayable in installments within 10 years. Admittedly, the relief claimed by the petitioner cannot be granted by this Court in exercise of jurisdiction under Article 226 of Constitution of India since it is the prerogative and business of the respondent-Bank to convert housing loan into Reverse Mortgage loan if the applicant is eligible for such conversion under the guidelines issued, if any. The respondent-Bank in its counter affidavit specifically denied the factum of non-issuance of demand notice under Section 13(2) of the Act and asserted that the said notice has been issued to the petitioner on 26.11.2007 demanding the payment of outstanding dues within 60 days, pursuant to which, the petitioner and her husband wrote letters to the Bank promising to repay the loan amount but failed to do so, and therefore, the Bank was constrained to take further steps to realize the outstanding dues under the Act. The letter addressed by the petitioner to the Chief Manager of State Bank of India, dated 4.2.2009 discloses that there were meetings between the petitioner and the officials of the Bank wherein the petitioner assured that she would make some positive arrangements to close the accounts very soon and when she expressed that the interest component of the loan is alarmingly high, the Bank officials assured her that they would look into the same and advised her to be prepared to settle the accounts based on the variable interest operating at that time. Thereafter, the petitioner addressed another letter to the Bank on 25.10.2008 stating that in the statement of account sent to her, she noticed that amounts paid to the Bank with specific advice to appreciate to the principal account were adjusted to the interest account. In that letter she also stated that the moratorium period of one year committed to her would come into operation from the date of last disbursement made to her, but no such moratorium was taken into account. The respondent-Bank in its reply letter, dated 29.10.2008 informed the petitioner that the moratorium period and the interest is charged as per terms and conditions agreed by the petitioner at the time of sanction of loan. Further in its letter, dated 27.4.2009 the respondent-Bank informed the petitioner that the interest rates are charged as per terms and conditions agreed by her at the time of sanction of loan i.e. floating rate of interest linked to SBAR only and that the sale proceeds of property mortgaged to the Bank is under process. For the said letter, the petitioner addressed another letter to the Bank on 9.4.2009 requesting the Bank to look into the matter, and that she would have no objection to accept the figure for final settlement if it is as per the information furnished to her by one Esrawrayya. The factum of service of demand notice on the petitioner as contemplated under Section 13(2) of the Act has not been denied by filing any reply to the counter affidavit. Further the correspondence between the petitioner and the Bank officials as referred to above, also discloses that negotiations were held by the petitioner with the Bank officials on receipt of demand notice. But the petitioner suppressed the said fact and invoked the jurisdiction of this Court with bald allegation that the demand notice was never issued by the Bank. The party seeking relief by invoking the extra ordinary jurisdiction of this Court under Article 226 of Constitution of India, should come forth stating the true facts and suppression of the facts or concealing of the material facts are sufficient to dismiss the writ petition without considering any of the contentions raised by the petitioner (see Nara Goud v. Industrial Tribunal-Cum-Labour Court, Warangal[1] and State of Punjab v. Sarav Preet [2]). Recently, the Apex Court also held that for suppression of material facts the petitioner is not entitled to any equitable relief (See K.D.Sharma v. Steel Authority of India Ltd.[3]) Under those circumstances, we are not inclined to consider any of the contentions advanced by the petitioner. However, if the petitioner is aggrieved by the action taken by the respondent-Bank under Section 13(4) of the Act, it is always open for her to move the appellate Court by way of an appeal wherein the appellate Court can go into the disputed questions of acts. Accordingly, the writ petition is dismissed. Petitioner is at liberty to approach the respondent-Bank for granting time to discharge the loan amount and it is for the Bank to consider her request. No order as to costs. _________________ (A. GOPAL REDDY, J.) ______________ (K.C.BHANU, J.) OCTOBER 29, 2009 TSR [1] 1996 (3) ALD 53 (D.B.) [2] AIR 2002 SC 2391 [3] 2008 AIRSCW 6654