*THE HON'BLE SRI JUSTICE P.S. NARAYANA +W.P.Nos.15574, 15575, 15576, 15577, 16364, 16365, 16366, 16419, 16420, 16421, 17105, 17136, 17137 and 17427 OF 2007 % 05-12-2007 # W.P.No.15574 of 2007: N. Venkatesh, S/o. N. Kistaiah, …Petitioner and $ 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another …Respondents W.P.No.15575 of 2007: Pittla Ram Dass, S/o. P. Sivaiah …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.15576 of 2007: M. Thimothy, S/o. M. Subba Rao …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.15577 of 2007: N. Narsing Rao, S/o. N. Pochaiah …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.16364 of 2007: Smt. Gulla Lalitha, W/o. Gulla Suresh …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.16365 of 2007: Smt. Gulla Lalitha, W/o. Gulla Suresh and another …Petitioners and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.16366 of 2007: M/s.Sree Sai Baba Builders, rep.by its Proprietor Sri Gulla Suresh …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar, Secunderabad and another … Respondents W.P.No.16419 of 2007: Gulla Ganesh, S/o. Late Sri Kuppuswamy Naidu …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.16420 of 2007: Gulla Ganesh, S/o. Late Sri Kuppuswamy Naidu …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.16421 of 2007: Gulla Ganesh, S/o. Late Sri Kuppuswamy Naidu …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.17105 of 2007: G. Suresh, S/o. G. Kuppuswamy Naidu …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.17136 of 2007: G. Suresh, S/o. G. Kuppu Swamy Naidu …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.17137 of 2007: G. Suresh, S/o. G. Kuppu Swamy Naidu …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.17427 of 2007: Smt. G. Lalitha, W/o. G. Suresh …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents <GIST: >HEAD NOTE: ! Counsel for petitioners : Sri SRIKANTH KAVETI ^ Counsel for respondents : SMT. V. DYUMANI ?CASES REFERRED : 1 (2004)4 SCC 311 2 AIR 2007 SC 712 3 2007(1) D.R.T.C.592(Mad.) 4 2007(1) Decisions Today(SC) 419 5 AIR 2007 SC 712 6 AIR 2007 MADRAS 268 7 2007(1) D.R.T.C.592(Mad.) 8 AIR 2007 (NOC) 1634 (BOM)= 2007(3) AIR Bom.R.656(DB) THE HONOURABLE SRI JUSTICE P.S.NARAYANA WRIT PETITION NOs.15574, 15575, 15576, 15577, 16364, 16365, 16366, 16419, 16420, 16421, 17105, 17136, 17137 and 17427 OF 2007 DATED: 05-12-2007 BETWEEN: W.P.No.15574 of 2007: N. Venkatesh, S/o. N. Kistaiah, …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another …Respondents W.P.No.15575 of 2007: Pittla Ram Dass, S/o. P. Sivaiah …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.15576 of 2007: M. Thimothy, S/o. M. Subba Rao …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.15577 of 2007: N. Narsing Rao, S/o. N. Pochaiah …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.16364 of 2007: Smt. Gulla Lalitha, W/o. Gulla Suresh …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.16365 of 2007: Smt. Gulla Lalitha, W/o. Gulla Suresh and another …Petitioners and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.16366 of 2007: M/s.Sree Sai Baba Builders, rep.by its Proprietor Sri Gulla Suresh …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar, Secunderabad and another … Respondents W.P.No.16419 of 2007: Gulla Ganesh, S/o. Late Sri Kuppuswamy Naidu …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.16420 of 2007: Gulla Ganesh, S/o. Late Sri Kuppuswamy Naidu …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.16421 of 2007: Gulla Ganesh, S/o. Late Sri Kuppuswamy Naidu …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.17105 of 2007: G. Suresh, S/o. G. Kuppuswamy Naidu …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.17136 of 2007: G. Suresh, S/o. G. Kuppu Swamy Naidu …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.17137 of 2007: G. Suresh, S/o. G. Kuppu Swamy Naidu …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents W.P.No.17427 of 2007: Smt. G. Lalitha, W/o. G. Suresh …Petitioner and 1. Bank of India, rep.by its Manager, Vasavinagar Branch, Plot No.28, Shop.No.56 and 57, Laxmi Enclave, Vasavinagar, Secunderabad and another … Respondents THE HONOURABLE SRI JUSTICE P.S.NARAYANA WRIT PETITION NOs.15574, 15575, 15576, 15577, 16364, 16365, 16366, 16419, 16420, 16421, 17105, 17136, 17137 and 17427 OF 2007 COMMON ORDER: Heard Sri Srikanth Kaveti, the counsel representing the writ petitioners and Smt. V.Dyumani, the counsel representing the respondents. 2. This batch of writ petitions are being disposed of by a common order though the parties are different in view of the fact that the principal question which had been argued in elaboration being common and in view of the fact that the factual matrix also appears to be substantially similar. 3. Sri Srikanth Kaveti, learned counsel representing the writ petitioners in all these writ petitions had taken this court to the respective pleadings of the parties and would maintain that in view of the fact that straight away the proceedings had been initiated under Sec.14 of the Securitization & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the Act’ for the purpose of convenience) and would maintain that unless the procedure under Section 13(4) of the Act is followed prior to the initiation of the action under Section 14 of the Act, such proceedings are illegal and are liable to be quashed. 4. The learned counsel while making elaborate submissions had taken this Court through the different provisions of the Act and also the relevant rules governing under the Act and further would submit that substantial payments had been made though in certain of the matters, there are no interim orders and this would show the bonafides of the petitioners. 5. Per contra, Smt. Dyumani, learned counsel representing the respondents-banking institution had taken this Court through the specific stand taken in the counter affidavits and would maintain that the stand taken by the writ petitioners that an action under Sec.14 of the Act should be preceded by a notice under Section 13(4) of the Act cannot be a sustainable contention. The learned counsel had taken this Court through the relevant provisions of the Act and the rules and explained in elaboration the object of the Act and further placed strong reliance on several decisions to substantiate her contentions. W.P.No.15574 of 2007: 6. This writ petition is filed by the petitioner seeking a writ of Mandamus declaring the action of the respondents in threatening to take over the possession of the property bearing Flat No.F-1, 1st floor, bearing premises No.12-13-706 constructed on Plot No.121 in Sy.No.161 of Kimtee colony, Lalaguda, Tarnaka, Secunderabad without following the procedure laid down under Sec.13(3)(a) and Sec.13(4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 as illegal, arbitrary and consequently to set aside the notice dated 29-03-2007 published in Indian Express and for such other reliefs. 7. It is stated that the respondent-bank sanctioned housing an to the petitioner to a tune of Rs.7,00,000/- for the purpose of purchasing a residential flat bearing Flat No.F-1, 1st floor in premises bearing No. 12-13-706, Sy.No.161, Kimtee Colony, Tarnaka, Secunderabad, during the month of May, 2005. The term of the loan is 15 years payable @ Rs.7,011/- per month. It is further stated that as on the date of sanctioning the loan, the construction work of the said flat was going on and the respondents have informed to the petitioner that the payment of the loan installment will be commenced from the date of taking the possession of the residential flat and possession was delivered to him during the last week of November 2006 and from the month of December 2006, he has been regularly paying the loan installments of Rs.7,011/- per month without committing any default. Further it is stated that to the surprise and dismay of the petitioner, the first respondent got published a news item in the Indian Express on 29-03-2007 under Sec.13(2) of the SURFACI Act, 2002 demanding him to pay the entire loan amount within 60 days. Soon after coming to know of the said notice, he rushed to the first respondent branch and requested him to assign the reason for inclusion of his property in the list of defaulters. Then the first respondent informed to the petitioner that he was in due of loan installments from November 2005 to November 2006, but in fact he was informed by the very same respondent that the payment of loan installments will commence from the date of taking over the possession of the premises and from the date of delivery of possession, he has been regularly paying the loan installments without any default till date. Accordingly, the petitioner submitted his written representation to the respondent reiterating the facts and requested him to drop all further proceedings. It is further stated that unfortunately the respondents without considering the petitioner’s representation and without complying with the provisions under Sec.13(3)(a) to Sec.30 of SURFACIA Act, deputed their agents, who are coming to the petitioner’s house day-in and day-out threatening him to vacate the premises, however, no notice or papers were served on him till date. Respondents have no right to take over the possession without complying with the Section 13(4) of the SURFACIA Act read with Rule 8 of the rules made there under and the action of the first respondent is illegal, arbitrary and contrary to the provisions of the SURFACIA Act, 2002. Further it is stated that except the above said residential flat, the petitioner did not have any other property and absolutely there is no fault on his part and he has also paid the loan installment for the current month, i.e. July 2007, which is evident from the statement of account given by the first respondent branch, if at all he has due of any amount, the first respondent ought to have informed him about the same, but without any protest the first respondent has been receiving the loan installments and suddenly got issued the public notice dated 29-03-2007 stating that he was in due of the loan installments from November 2005 to November 2006. In spite of the petitioner submitted his reply to the said notice, the first respondent is sending his agents to his premises who are threatening him to pay the entire loan amount otherwise to vacate and handover the possession to them. 8. In the counter affidavit filed by the respondent-bank, it is stated that the writ petition is not maintainable. It is also further stated that the writ petitioner approached this court with tainted and unclean hands. He has suppressed the appointment of an advocate commissioner by the Chief Metroplitan Magistrate, Hyderabad under Sec.14 of the Act for taking possession of the secured asset and the said commissioner along with authorized officer of the bank visited the secured asset on 17-07-2007 for taking possession of the secured asset. The petitioner requested the advocate commissioner to grant time to vacate the premises. Suppressing the said material fact the petitioner fabricated a representation as if he has submitted to the respondent bank on 17-05-2007 in response to the demand notice published in Indian Express on 29-03-2007 under Sec.13(2) of the Act and filed the present writ petition alleging that the respondent-bank has not considered his representation dated 17-05-2007 and thereby the bank has violated the provisions of Sec.13(3)(a) of the Act. Further it is stated that the respondent has not received the alleged letter dated 17- 05-2007 referred in the writ petition. The said letter is fabricated by the petitioner, just before filing of the writ petition, with an intention to create a ground to approach the Hon’ble Court to file writ petition and to obtain exparte orders preventing the bank from proceeding further under the Act for enforcement of the secured asset. Further it is stated that at the entrance in the respondent bank a ‘cheque drop box’ is kept for the convenience of the customers, to drop their cheques meant for collection. For the purpose of crossing of cheques, a rubber stamp containing ‘the name of the bank, name of the branch with pin code and phone numbers’ is kept near the box to enable the customer to affix the said rubber stamp on the cheque. A notice is also displayed at the cheque drop box, the manner how the cheque is to be crossed and put into the cheque drop box. The customers are requested to affix the rubber stamp, in order to prevent frauds, thefts and unauthorized collection of the cheques by third parties by illegal methods. It is also stated that the petitioner taking advantage of the availability of the said rubber stamp at the entrance of the branch, had affixed the said stamp on the alleged letter dated 17-05-2007 with a malafide intention to give a colour, as if, he has submitted the letter/representation/objections to the respondent bank in response to the demand notice under Sec.13(2) of the Act published in the news paper. It is pertinent to note that the petitioner has not obtained any acknowledgment from the Manager having served the alleged letter. It is also stated that without prejudice to the rights and contentions of the respondent bank in the writ petition, in order to keep the matter beyond controversy, the respondent bank has considered the objections raised by the petitioner in his alleged letter dated 17-05-2007 and sent a reply by registered post vide its letter dated 08-08-2007. Further it is stated that the petitioner approached the respondent bank for a term loan of Rs.7.00 lakhs for the purpose of purchase of Flat No.F1, First Floor, admeasuring 1000 sq. feet together with undivided share of land admeasuring 33 sq. yards out of 205 sq. yards bearing premises No.12-13-706, on Plot No.101, at Kimtee Colony, Lallaguda Village, Tarnaka, Secunderabad(secured asset). On the basis of the loan application, the respondent-bank sanctioned the said term loan against the security of the above said flat and the petitioner executed term loan agreement dated 03-05-2005 promising to repay the term loan in 15 years including 6 months moratorium. The petitioner also agreed to pay the term loan with interest at 2.25% below BPLR minimum of 8.50% with monthly rest. The equated monthly installment is Rs.7,011/-. The due date of payment of first equated monthly installment is 30-11-2005. The due date for payment of send equated monthly installment is 31-12-2005. The due date for payment of third equated monthly installment is 31-01-2006 and so on till the loan is fully repaid. The loan is repayable in 180 equated monthly installments. It is also stated that with the loan amount, the writ petitioner purchased the property referred above and obtained a sale deed dated 03-05-2005 from his vendors and the said sale deed was registered as document No.1142 of 2005 in the Sub Registrar Office, Maredpally. The petitioner deposited the said original sale deed with the respondent bank and created mortgage over the said property as security for due repayment of the term loan liability. Further it is stated that the allegations in the writ petition that the payment of loan installment will be commenced from the date of taking the possession of the flat and the flat was delivered in the last week of November 2006 is a deliberate false and misleading statement made with a malafide intention to obtain unlawful gain. It is evident from the contents in the registered sale deed dated 03-05-2005 that the vacant and physical possession of the secured asset was delivered to the petitioner on the date of the execution of the sale deed i.e. 03-05-2005. Therefore the allegations, that the bank authorities informed that the payment of loan installments would commence from the date of taking over possession of the property is a false and base less allegation. It is also not correct to state that Builder delivered possession of the property in the last week of November 2006 and the petitioner has been paying the installments regularly. As can be seen from the statement of account, the petitioner has committed default in payment of 14 installments as on the date of demand notice published in the news paper. As the petitioner failed to pay the installments on due date, the account was classified as Non- performing Asset existing norms and the respondent was constrained to recall the entire loan. Further it is stated that the respondent bank sent the demand notice under Sec.13(2) of the Act to the address given in the loan application, but the said notices were returned unserved and as such respondent bank was constrained to publish the demand notice in the news paper. Even after expiry of 60 days from the date of publication of the demand notice, the petitioner has not chosen to pay the amount demanded in the notice. It is also stated that for taking physical possession of the secured asset, respondent bank filed Crl.M.P.No.3282 of 2007 before the Chief Metropolitan Magistrate, Hyderabad and the Chief Metropolitan Magistrate vide orders dated 13-07-2007 appointed an advocate commissioner for taking possession of the property and hand over the same to the authorized officer of the respondent bank. Further it is stated that the authorized officer and the commissioner appointed by the Chief Metropolitan Magistrate visited the secured asset on 17-07-2007 for taking possession of the same. The petitioner requested time to vacate the secured assets, but surprisingly filed the above writ petition with all false allegations. To invoke the jurisdiction of this Court, the petitioner has gone to an extent to fabricate a letter dated 17-05-2007 and filed the same along with the writ petition as if he had submitted the said letter to the respondent bank and the bank has not considered the objections raised by him in the said letter to the notice issued by the bank under Sec.13(2) of the Act. It is also stated that the petitioner came to this court with unclean hands, with fabricated documents suppressing the appointment of the advocate commissioner by the Chief Metropolitan Magistrate for taking possession of the secured assets. Further specific stand has been taken that since the representation has been considered and a reply has been given, the writ petition itself became infructuous. In the light of the same, it is prayed that the writ petition is liable to be dismissed. It is also stated that the petitioner is having an effective and alternative remedy under Sec.17 of the Act. Hence the dismissal of the writ petition had been prayed for. W.P.No.15575 of 2007: 9. This writ petition is filed by the petitioner seeking a writ of Mandamus declaring the action of the respondents in threatening to take over the possession of the property bearing Flat No.S-1, 2nd floor, bearing premises No.12-13-706 constructed on Plot No.121 in Sy.No.161 of Kimtee colony, Lalaguda, Tarnaka, Secunderabad without following the procedure laid down under Sec.13(3)(a) and Sec.13(4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 as illegal, arbitrary and consequently to set aside the notice dated 29-03-2007 published in Indian Express and for such other reliefs. 10. It is stated that the respondent-bank sanctioned housing loan to the petitioner to a tune of Rs.7,00,000/- for the purpose of purchasing a residential flat bearing Flat No.S-1, 2nd floor in premises bearing No. 12-13-706, Sy.No.161, Kimtee Colony, Tarnaka, Secunderabad, during the month of May, 2005. The term of the loan is 15 years payable @ Rs.7,011/- per month. It is further stated that as on the date of sanctioning the loan, the construction work of the said flat was going on and the respondents have informed to the petitioner that the payment of the loan installment will be commenced from the date of taking the possession of the residential flat and possession was delivered to him during the last week of November 2006 and from the month of December 2006, he has been regularly paying the loan installments of Rs.7,011/- per month without committing any default. Further it is stated that to the surprise and dismay of the petitioner, the first respondent got published a news item in the Indian Express on 29-03-2007 under Sec.13(2) of the SURFACI Act, 2002 demanding him to pay the entire loan amount within 60 days. Soon after coming to know of the said notice, he rushed to the first respondent branch and requested him to assign the reason for inclusion of his property in the list of defaulters. Then the first respondent informed to the petitioner that he was in due of loan installments from November 2005 to November 2006, but in fact he was informed by the very same respondent that the payment of loan installments will commence from the date of taking over the possession of the premises and from the date of delivery of possession, he has been regularly paying the loan installments without any default till date. Accordingly, the petitioner submitted his written representation to the respondent reiterating the facts and requested him to drop all further proceedings. It is further stated that unfortunately the respondents without considering the petitioner’s representation and without complying with the provisions under Sec.13(3)(a) to Sec.30 of SURFACIA Act, deputed their agents, who are coming to the petitioner’s house day-in and day-out threatening him to vacate the premises, however, no notice or papers were served on him till date. Respondents have no right to take over the possession without complying with the Section 13(4) of the SURFACIA Act read with Rule 8 of the rules made there under and the action of the first respondent is illegal, arbitrary and contrary to the provisions of the SURFACIA Act, 2002. Further it is stated that except the above said residential flat, the petitioner did not have any other property and absolutely there is no fault on his part and he has also paid the loan installment for the current