THE HON'BLE SRI JUSTICE P.S.NARAYANA Writ Petition No.9409 of 2007 Date: 18th December, 2007 Between :- P. Anasuya .. Petitioner And The Collector and District Magistrate, Eluru, West Godavari District And 2 others .. Respondents THE HON'BLE SRI JUSTICE P.S.NARAYANA Writ Petition No.9409 of 2007 ORDER:- Heard Sri C.Ramachandra Raju, the learned Counsel representing the Writ Petitioner and Sri E.Madan Mohan Rao. 2. This Court issued rule nisi on 30-4-2007 and granted interim stay on condition of deposit of a sum of Rs.4,00,000/- within a period of four weeks from the said day. It is represented that the conditional order had been complied with. 3. The Writ Petition is filed for a Writ of Mandamus declaring the action of the 1st respondent in his proceedings Roc.No.25/2007/D7 dated 15-2-2007 is highly arbitrary, illegal and contrary to the provisions of Securitisation Act, violative of Articles 14 and 21 of the Constitution of India, null and void and pass such other suitable orders. 4. It is stated that Sri Koteswari Lace Industries, Narsapur, has availed loan for its business from the 2nd respondent Bank and the petitioner stood as guarantor for the said loan creating equitable mortgage in respect of her building. It is also stated that the principal borrower has paid a sum of Rs.23 lakhs in full settlement of the loan under O.T.S., but the 2nd respondent has issued a notice dated 5-10-2005 to the borrower demanding him to pay a sum of Rs.8,32,371-05 in addition to the amount of Rs.23 lakhs which was already paid and the said borrower is disputing with the 2nd respondent Bank with regard to alleged due amount of Rs.8 lakhs. Further it is stated that while so, the petitioner came to know on 26-4-2007 that the 1st respondent has issued a notice to the 3rd respondent at the instance of the 2nd respondent to take possession of her property under Section 14 of the Securitisation Act alleging that the outstanding amount of loan is Rs.30,70,939/- ignoring the payment of Rs.23 lakhs paid by the borrower and that the 1st respondent has not issued any notice to the petitioner and further stated that when the Mandal Revenue Officer and his staff came to the petitioner’s building on 26-4-2007 to take possession of her building highhandedly, she resisted their attempt with the help of her neighbours and that the Mandal Revenue Officer, went away, saying that he will come with police force to take possession of her building. It is also stated that even according to the 2nd respondent Bank, the alleged due is Rs.8 lakhs, but not Rs.30 lakhs as alleged by the 1st respondent in his notice. Further it is stated by the petitioner that it is mandatory to issue notice to the petitioner under Section 13(2) of the Securitisation Act before proceeding against her property and that therefore, the action of the 1st respondent under Section 14 of the Securitization Act is null and void. The petitioner also further stated that if the respondents take possession of her building without due process of law, she would be deprived of her valuable property and suffer great hardship and irreparable loss. In such circumstances, the writ petitioner approached this Court praying for appropriate reliefs. 5. In W.V.M.P.No.1968/2007, respondent No.2 – State Bank of India, Narsapur Branch, Narsapur, in the counter affidavit averred as hereunder:- “It is stated that the petitioner questioning the arbitrary and illegal action of the respondents in contemplating to take possession of the property i.e., building under Section 14 of the Securitisation Act without issuing any notice to the petitioner either under Section 13(2) and 14 of the Act aforesaid and without furnishing any statement of the account indicating the actual due amount is incorrect and the averments made by the petitioner is totally false. It is also stated that M/s.Koteswari Lace Industries, the firm represented by the husband of the petitioner, has taken loan to a tune of Rs.31.00lakhs for executing the export orders and that after receiving the loan amount, the firm has not submitted any details pertaining to export orders and has not paid the loan amount inspite of several demands made by the Bank and the loan has become NPA as on 30-9-2004 and also further stated that the said firm has filed number of Writ Petitions bearing Nos.2345/2004, 7228/2005, 16028/2006 and 19197/2007 challenging the various proceedings initiated by the Bank and further stated that in fact, the said firm tried to sell away other mortgage property and the purchaser Sri V.Satyanarayana Raju came to the Bank and after knowing the outstanding loan, paid Rs.18,00,000/- and the property purchased by him has been released. Further it is stated that it is true that the petitioner stood as a guarantor for the loan provided to M/s.Koteswari Lace Industries by creating equitable mortgage in respect of the buildings owned by her and the said firm is represented by the petitioner husband. It is also stated that the allegation that the principal borrower has paid a sum of Rs.23 lakhs in full settlement of the loan under OTS is incorrect. Further it is stated that it is true that the 1st respondent has issued proceedings in Roc.No.25/2007/D7 dated 15-2- 2007 to take possession of the property. The allegation that the outstanding amount is mentioned as Rs.30 lakhs ignoring the payment of Rs.23 lakhs paid by the borrower is misconceived. The firm paid only Rs.23 lakhs including the payment made by third party purchaser. It is stated that Rs.30 lakhs mentioned in the subsequent notices as book balance as originally mentioned in Section 13(2) of the notice without applying interest and other charges payable by the borrower. Further it is stated that the petitioner paid Rs.4 lakhs as per the direction of this Court in June, 2007 and after adjustment of all the amounts, the borrower has to pay Rs.9,88,602-05 as on 30-6-2007 with interest. It is also stated that no notice was issued under Section 13(2) of the Act before proceeding against the property is incorrect and further it is stated that the notice under Section 13(2) dt.4-1-2005 was issued to the petitioner and the same was also acknowledged by the petitioner on 5-1-2005 and possession notice under Section 13(4) of the Act was also issued on 21-3-2005. It is also further stated that the petitioner had not availed any remedy under Section 13(3) of the Act, therefore the notice dt.21-3-2005 was issued and thereafter auction notice was issued on 1-9-2005, which was acknowledged by the petitioner on 6-9-2005. The auction notice dated 28-3-2006 was also sent to the petitioner and all the notices have been published in the newspapers as per the provisions of the Act. Therefore, the allegation that the action of the respondent has vitiated without giving notice under Section 13(2) of the Act and the Bank has violated the provisions of the Act is incorrect. Further it is stated that the proceedings dated 15-2-2007 is only consequential proceedings and that in fact, the petitioner and borrower always refused the letter sent by the Bank and further it is stated that the petitioner has not challenged the proceedings under Section 13(4) of the Act and as such the petitioner cannot challenge the proceedings dated 15-2-2007 and no legal infirmity has been pointed in issuing the proceedings dated 15-2- 2007 by the respondent and that the Writ Petition is devoid of merits and hence liable to be dismissed with costs.” 6. In the light of the respective stands taken by the parties, it is needless to say that the writ petitioner is having an alternative remedy. Even otherwise, several of the factual controversies cannot be gone into in the present Writ Petition. However, in the light of the peculiar facts and circumstances since it had been stated before this Court that the writ petitioner is ready and willing to clear off the rest of the amount also provided proper accounts are furnished, this Court is of the considered opinion that that it is for the Banking Institution to take appropriate decision in this regard. Let the writ petitioner make a representation to the concerned Banking Institution and this Court does hope that the concerned Banking Institution would take an appropriate decision in this regard furnishing the details of the rest of the amount due and this Court also does hope that the writ petitioner would clear off the rest of the amount due as represented before this Court. Except making this observation, nothing further can be done in the present Writ Petition. 7. The Writ Petition is accordingly disposed of. No order as to costs. _________________ Justice P.S.Narayana December, 2007 smr