IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE NINETEENTH DAY OF JUNE TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE GHULAM MOHAMMED and THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT PETITION NO : 25550 of 2007 Between: Ongolu Chinnamayi W/o OngoluVenkateswarlu R/o 5-41-31, 6thLine 2nd Cross Brodipet, Guntur Guntur District. ..... PETITIONER AND 1 Bank of India Guntur brnach, vijaya Talikes Road, Guntur, Guntur District rep by its Branch Manager, 2 M/s. Satyasree Fertilizers rep byits Proprietor, Sri Pothuri Koteswara Rao 23-6-15, Patnam Bazar, Guntur. .....RESPONDENT(S) 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 any Writ or order direction more particularly one inthe nature of Writ of Mandmaus declaringthe actionof the 1st respondent herein issuing possession notice dt 20-08-2007 to the petitioner and releasingthe title deeds of the 2nd respondent herein without collecting outstanding amount from the 2nd respondnet and demandingthe petitioner to payan amount of Rs. 5, 04,042-82 Ps. as illegal, arbitrary null and void and for a consequential direction to the 1s respondnet to drop all further proceedigns relatingto the demand of payment of Rs. 5,04,042-82 ps as wellas taking possession of the property belonging to the petitioenr herein and to pass such otehrorder or orders. Counsel for the Petitioner:MR.K.SRINIVAS Counsel for the Respondent No.: MR.S.SURYA PRAKASA RAO The Court made the following : THE HON'BLE MR JUSTICE GHULAM MOHAMMED and THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR W.P.No.25550 of 2007 ORDER: (Per Ghulam Mohammed, J) This writ petition is filed seeking a writ of Mandamus to declare the action of the first respondent in issuing possession notice dated 20.08.2007 to the petitioner and releasing the title deeds of the second respondent without collecting outstanding amount from it and demanding the petitioner to pay an amount of Rs.5,04,042-82ps as illegal and arbitrary and consequently direct the first respondent to drop all further proceedings relating to the demand of payment of the said amount. 2. The case of the petitioner is that he stood as guarantor to the second respondent. The second respondent, which is the Principal Debtor, has executed a letter of guarantee, dated 25.08.2004 guarantying the due repayment of the loan amount and has availed a cash-credit loan from the first respondent bank to a tune of Rs.28,75,000/-. While so, the Principal debtor availed One Time Settlement (OTS) scheme and paid some of the amounts due to the respondent Bank. Thereafter, the Principal debtor was issued a notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the Act’). Pursuant to the notice, the second respondent paid another some amount and the respondent Bank released the second respondent’s properties, which were under mortgage, without giving notice to the petitioner who is the guarantor. 3. On the other hand, the case of the first respondent Bank is that the principal debtor had expired. Thereafter, in response to the notice dated 23.01.2006 under Section 13 (2) of the Act, the legal heirs of the second respondent requested the respondent Bank that they would raise the amount by selling the properties mortgaged by their father and a compromise was reached between the parties including the petitioner. On receipt of Rs.15 lakhs from the legal heirs of the second respondent, the respondent Bank released the properties equivalent in value for eventual sale. The amount demanded from the petitioner is the balance outstanding amount after giving credit of Rs.15 lakhs paid by the L.Rs of the second respondent. 4. This court while granting interim stay imposed a condition on the petitioner to pay Rs.1,00,000/- and later the petitioner made an incorrect statement to the court that the conditional order has been complied with. 5. A perusal of the record goes to show that the petitioner is one of the signatories to the compromise. Since the petitioner is a signatory to the compromise and being the guarantor to the loan amount, he has to repay the balance loan amount. In the circumstances, petitioner is not entitled to any relief. However, we deem it appropriate to permit the petitioner to repay the balance amount due and payable to the respondent Bank within a period of two months from the date of receipt of a copy of this order. If any amount already paid by the petitioner or the L.Rs of the second respondent, the same shall be given credit to the loan account. In default, the Bank shall be at liberty to proceed further as per law. 6. Subject to the above concession, the writ petition is dismissed. No costs. _____________________ GHULAM MOHAMMED,J _____________________ VILAS V. AFZULPURKAR 19-06-2009 Stp ` ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1) 2 CD copies Form-NIC-OGS/WP{TRT}