HON'BLE MR JUSTICE GHULAM MOHAMMED AND HON'BLE MR JUSTICE G. CHANDRAIAH WRIT PETITION NO. 17234 OF 2010 Between: P. Raghu Varma ..... PETITIONER AND 1. State Bank of India .....RESPONDENT ORDER: (Per Hon'ble Sri Justice Ghulam Mohammed) This Writ Petition has been filed declaring the action of the respondent-Bank in not considering the representation of the petitioner dated 14.7.2010 for sale of his property i.e. Flat No. 101 on Plot No. 78, Sharada Nagar Colony, Mehdipatnam, Hyderabad to petitioner’s brother Mr. P. Kasiviswanadha Raju at the reserve price of Rs. 14.00 lakhs which is fixed by the respondent bank in the auction notice dated 18.6.2010 as illegal and arbitrary. Brief facts of the case are that the petitioner herein mortgaged his Flat No. 101, Plot No. 78 Sharadanagar Colony, Mehdipatnam, Hyderabad, as a collateral security in the loan account of M/s Dhanamjaya Impex Private Limited to the respondent Bank. It is stated that due to various reasons beyond the control of the borrower company, the accounts became irregular and the company ceased its business activity. It is stated that the Authorized Officer of the respondent-Bank has not followed the procedure laid down under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short “the SRFAESI Act”) while enforcing the right over the secured asset i.e. Flat No. 101, on Plot No. 78, Saradanagar Colony, Mehdipatnam, Hyderabad. It is also stated that after receiving the auction notice dated 29.6.2010, the petitioner approached the respondent-Bank with a request to sell the property which is brought for sale to his younger brother Mr. P. Kasi Vishwanadha Raju for the reserve price fixed by the Bank and to that effect his brother has given his offer in writing to the Bank in the representation dated 14.7.2010. But the respondent-Bank has not taken any steps so far on the representation made by the petitioner. Aggrieved by the same, the present Writ Petition has been filed. Respondent-Bank filed its counter stating that the borrower company and its guarantors have committed default in repaying the loan therefore, the Bank has filed O.A No. 72 of 2009 on 26.3.2009 before the Debts Recovery Tribunal, Hyderabad. As the account of the borrower company became non-performing asset, the respondent-Bank also initiated recovery proceedings under the provisions of SRFAESI Act by issuing demand notice dated 12.8.2009 to the borrower company. As the loan amount was not paid even after expiry of the stipulated period under the demand notice, the Bank proceeded further and issued possession notice dated 28.1.2010 taking symbolic possession of the secured assets. It is stated that the Bank obtained order under Section 14 of the SRFAESI Act in Crl. M.P.No. 81 of 2010 on the file of Chief Metropolitan Magistrate, Nampally, Hyderabad for delivery of physical possession of flat bearing No. 101 admeasuring 890 sq.fts situated at Sarada Nagar, Gudimalkapur, Hyderabad. It is also stated that the respondent-bank also appointed the approved valuer Sri K. Dhanapathi Rao and Associates on 18.5.2010 to value the said flat. The said valuer suggested the fair market value of the property as 16.52 lakhs and realizable value as Rs. 13.20 lakhs. Considering the said valuation report, the SRESI Valuation Committee- Mid-Corporate Region of Hyderabad approved the valuation for fixing the upset price of Rs. 14 lakhs for sale. Therefore, the respondent-Bank after following the due procedures prescribed proceeded further and got published a sale notice in the daily news papers. The learned counsel appearing for the petitioner contended that after the expiry of his father, his mother is staying in the said flat and got attachment towards property and his brother intends to purchase the property by paying an amount of Rs. 16 lakhs, as against Rs. 16.52 lakhs fixed by the approved valuer. We have heard the learned counsel appearing for both sides and also perused the entire material made available on record. As seen from the record, it is no doubt true that the petitioner mortgaged his property bearing Flat no. 101, Pot No. 78 sharadanagar Colony, Mehdipatnam, as a collateral security in the loan account of M/s Dhanamjaya Impex Private Limited to the respondent Bank. It is also no doubt true that the Bank has filed O.A.No. 72 of 2009 before the Debts Recovery Tribunal when the Borrower Company and its guarantors committed default in repaying the loan amount to the Bank. The respondent-Bank obtained orders under Section 14 of the SRFAESI Act and filed Criminal M.P.No. 81 of 2010 for delivery of physical possession of Flat bearing No. 101, admeasuring 890 sq. fts situated at Sharada Nagar. The respondent Bank also got obtained fair value of the property by appointing Sri K. Dhanapathi Rao and Associates, approved valuer, and the said valuer suggested the fair market value of the property as 16.52 lakhs and realizable value as 13.20 lakhs and considering the said valuation report, the Valuation Committee-Mid-Corporate Region of Hyderabad approved the valuation for fixing the upset price of Rs. 14 lakhs for sale. As the brother of the petitioner is willing to purchase the said property by paying an amount of Rs. 16 lakhs as against Rs. 16.52 as fixed by the approved valuer, we deem it appropriate to direct the petitioner herein to deposit an amount of Rs. 16 lakhs (Rupees Sixteen Lakhs Only) within a period of two weeks from today. On such deposit, the respondent-Bank is directed not to put the property bearing Flat No. 101, Pot No. 78 Sharadanagar Colony, Mehdipatnam, Hyderabad, in auction. The petitioner shall give an undertaking by tomorrow to the effect that he will pay the amount of Rs. 16 lakhs within a period of two weeks from today, so as to prevent the respondent-Bank for not proceeding further. With the above observation, the Writ Petition is disposed of. There shall be no order as to costs. _______________________ GHULAM MOHAMMED,J _________________________ G. CHANDRAIAH ,J DATE: 20.07.2010 KA ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1. 2 CD copies.