THE HON’BLE SRI JUSTICE N.V. RAMANA AND THE HON’BLE SRI JUSTICE P. DURGA PRASAD W.P. No. 22362 of 2011 Oral order: (Per N.V. Ramana, J.) The petitioner has filed this writ petition questioning the Possession Notice dated 16.07.2011 issued by the respondents-Bank under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Act, 2002 (hereinafter referred to as ‘the SARFFAESI Act’). The petitioner stood as guarantor to the loan taken by a partnership firm by name M/s. Durga Bhavani Agro Tech Industry. Being the guarantor, he furnished agricultural land in an extent of Acs. 3.05 guntas in Sy. No. 790/A, Atmakur village, Warangal, towards security for the loan amount. As the said partnership firm did not repay the loan amount, the respondents-Bank initiated proceedings under the SARFAESI Act. And for recovery of the loan amount, the respondents-Bank issued the impugned Possession Notice, for taking possession of the property mortgaged by the petitioner as security towards the loan amount. The learned counsel for the petitioner submits that the partnership firm-loanee and the officials of the respondents-Bank coerced the petitioner to furnish the property in question, which is agricultural land, as security to the loan amount taken by the loanee, on the ground that the same is exempted from attachment and sale under the SARFAESI Act. Believing their words, the petitioner has furnished the property in question, which is sought to be taken possession of under the impugned Possession Notice, as security for the loan amount. He submits that since the petitioner is not the principal borrower and only a guarantor, and the property in question being an agricultural land, having regard to the provisions of the SARFAESI Act, cannot be taken possession of. He further submits that since the respondents-Bank sought to take possession of the property in question, without following the procedure prescribed under the SARFAESI Act, by issuing the impugned Possession Notice, the same is liable to be quashed and set aside. Heard the learned counsel for the petitioner and the learned Standing Counsel for the respondents-Bank. According to the own admission of the petitioner, he is a guarantor to the loan amount taken by the partnership firm. It is the case of the respondents-Bank, as is evident from the counter filed by them, the partnership firm had taken loan from them, and that as on 02.08.2011 the principal borrower and the guarantors, were jointly and severally liable to pay an amount of Rs.4,43,10,823/- with interest thereon at the rate of 16.50% per annum compounded monthly against OCC loan facility, Rs.37,97,811/- with interest thereon at the rate of 14.50% per annum compounded monthly against Term Loan No. 1 and a sum of Rs.27,34,604/- with interest thereon at the rate of 14.50% per annum compounded monthly against Term Loan No.2, and thus the principal borrower and the guarantors, including the petitioner are jointly and severally liable to pay an amount of Rs.5,08,43,238, as per the applicable rates of interest. It is the further case of the respondents-Bank that as the principal borrower was not paying the loan amount, the loan account was declared as non-performing asset on 04.04.2011. Thereafter notice under Section 13(2) of the SARFAESI Act was issued on 16.05.201 to the principal borrower and the guarantors, including the petitioner, calling upon them to pay the outstanding amount of Rs.4,82,87,781 with further interest with monthly rests. That a separate demand notice was sent to the petitioner calling upon him to pay a sum of Rs.4,72,14,000/- with interest thereon, within a period of sixty days of its receipt, but the petitioner neither chose to reply to the said notice nor paid the loan amount. Therefore, the respondents- Bank issued the impugned Possession Notice under Section 13(4) of the SARFAESI Act. From the above, it is clear that before issuing the impugned Possession Notice, the respondents-Bank issued notice to the principal borrower and the guarantors, including the petitioner calling upon them to pay the outstanding loan amount. As the loanee and the petitioner, who is a guarantor, neither submitted their reply to the said notice nor paid the outstanding loan amount, the respondents-Bank issued the impugned Possession Notice. Therefore, it cannot be said that the respondents-Bank have not followed the procedure contemplated under the SARFAESI Act. The petitioner having stood as guarantor to the loan amount taken by the principal borrower, and having furnished the property in question as security to the loan amount and having agreed to be liable to pay the loan amount jointly and severally, now cannot contend that he was made to play into their hands by the principal borrower and the loanee, for furnishing his landed property as security on the ground that the same is exempted from attachment under the SARFAESI Act. There is no merit in the writ petition and the same is accordingly dismissed. This order, however, will not preclude the petitioner to approach the respondents-Bank or move the Debts Recovery Tribunal for appropriate relief. No costs. ________________ N.V. RAMANA, J. _____________________ P. DURGA PRASAD, J. Dated: 29th August, 2011 KSR