IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWELTH DAY OF MARCH TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH and THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT PETITION NO : 25535 of 2007 Between: 1 M/s. Orkary Tobacco Dealers, Katavaram, Seethanagaram Mandal, E.G. District, Rep. by its Proprietor Jaasti Ramakrishna 2 Jaasti Ramakrishna W/o. Late Govindam, R/o.D.No. 3/89, Katavaram (V), Seethanagaram Mandal, E.G. District, Presently R/o. at Kukatpally, Hyderabad. ..... PETITIONER(S) AND The State Bank of India, Torredu Branch, Torredu Seethanagaram Mandal, E.G. District, Rep. by its Branch Manager. .....RESPONDENT 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 issue appropriate writ or order or direction more particularly one in the nature of writ of Mandamus declaring the action of the respondent in dispossessing the 2nd petitioner from his House Property bearing D.No. 3/89 having an extent of 0.16 1/2 cents in SY.No. 57 of Katavaram Village, Seethanagaram Mandal, E.G. District without issuing any notice or passing any orders under the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act as illegal, arbitrary and in violation of the fundamental rights guaranteed under Art. 14 21 and 300A of the Constitution of India and consequently direct the respondent not to proceeed further in any manner in respect of the above mentioned house property in the interest of justice and to pass such other order or orders. Counsel for the Petitioner:MR.K.VENKATESH Counsel for the Respondent No.: MR.DEEPAK BHATTACHARJEE The Court made the following : THE HON’BLE SRI JUSTICE V.ESWARAIAH AND THE HON’BLE SRI JUSTICE VILAS V.AFZULPURKAR W.P.NO.25535 OF 2007 ORDER: (Per V.Eswaraiah, J.) Petitioners question the action of the respondent bank in dispossessing the 2nd petitioner from the house property bearing D.No.3/89 having an extent of 0.16 ½ cents in Sy.No.57 of Katavaram Village, Seethanagaram Mandal, East Godavari District, without issuing any notice or passing any orders under the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, as illegal and arbitrary. It is the case of the petitioners that the house property bearing Door No.3/89 along with land to an extent of 0.16 ½ cents in Sy.No.57 of Katavaram Village, Seethanagaram Mandal, East Godavari District, originally belongs to Chitturi Chandra Kantham, grand mother of the 2nd petitioner and the 1st petitioner obtained a loan from the respondent bank and the said Chitturi Chandra Kantham mortgaged the said property as a guarantee to the said loan. As the loan amount was not repaid by the first petitioner loanee, it is stated that the respondent bank filed civil suit in O.S.No.524 of 2006 on the file of the I Additional Senior Civil Judge, Rajahmundry for recovery of the sum of Rs.5,91,287.40 ps., together with further interest from 20.10.2006 till the date of realization. It is also stated that there was some dispute with regard to the settlement of the said property and the said dispute was settled among the 2nd petitioner and the donor of the said property Chitturi Chandra Kantham before the Lok Adalat at Rajahmundry and subsequently on 1.4.2006 the Lok Adalat passed an award recording compromise with regard to the execution of settlement deed dated 29.3.2006. It is the case of the petitioners that the 2nd petitioner acquired title to the said property and the said property is not liable for charge. It is not in dispute that the original owner of the said property mortgaged the property and the loan was availed on 24.3.1998 by executing necessary loan documents. Thus the property itself had been mortgaged and any transfer of the property will be subject to the discharge of the loan amount. Therefore, the respondent bank has got every right to proceed against the said property under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter for short referred to as ‘the Act’). As the liability was not liquidated after the institution of the said suit, the respondent bank issued notice under Section 13(2) of the Act demanding payment of Rs.5,86,183/- with further interest from 20.9.2006 till the date of payment within a period of 60 days from the date of service of notice. As the said amount was not paid within the said period, notice under Section 13(4) of the Act was issued for taking possession on 8.8.2007 and possession was also taken on 17.11.2007. The contention of the petitioners is that suit O.S.No.524 of 2006 on the file of the I Additional Senior Civil Judge, Rajahmundry, filed by the respondent bank is pending and it is not open for the respondent bank to initiate action under Section 13 of the Act. The said issue has been settled against the petitioners as per the ratio laid down by the Apex Court in Transcore v. Union of India[1]. Therefore, we are of the opinion that it is not open for the petitioners to contend that the respondent bank is not entitled to initiate action under the Act merely because it had filed a civil suit for recovery of the amount and that the suit is pending. Under the Act, it is always open for the respondent bank to proceed against the secured assets of the principal loanee and the guarantor irrespective of the pendency of any suit or decree obtained by it. If there is any non-compliance of the provisions of Section 13 of the Act, the only course open for the petitioners is to approach the Debts Recovery Tribunal under Section 17 of the Act. In view of the above, we do not see any merit in the writ petition. The writ petition is, accordingly, dismissed. No order as to costs. ________________ V.ESWARAIAH, J. ________________________ VILAS V.AFZULPURKAR, J. 12.3.2009 kpr [1] (2008) 1 SCC 125