WP/11482/2006 of Narender Kumar, Vs Andhra Bank, Corporate Finace Branch, on 26 December 2007

Conclusion

O R D E R:

The writ petitioner Narender Kumar filed the present writ petition for awrit of mandamus declaring the notice, dated 04.5.2006, issued by AdvocateCommissioner, at the instance of the respondents for vacating the premisesas illegal, arbitrary and unconstitutional.

2. This court initially granted stay of dispossession for a period of oneweek on 12.6.2006 and on 13.6.2006 ordered notice before admission andfurther continued the stay of dispossession granted earlier for some moretime and the same was extended and ultimately since none appeared for therespondents and no counter-affidavit had been filed the interim order alreadygranted was extended until further orders on 10.7.2006. This court issuedrule nisi on 07.6.2007 and directed the interim order granted earlier tocontinue until further orders.

3. R1 filed counter-affidavit and prayed for vacating the interim order.

4. Sri C.B.Ramamohan Reddy, the counsel representing petitioner andSmt. V.Dyumani representing respondents made certain submissions on thestrength of the respective pleadings.

5. The petitioner states that he is a tenant in the petition scheduleproperty comprising of Mulgies bearing No.21-6-732 to 737, situated atChelapura, Hyderabad. The petitioner obtained the said premises on rent from the respondents 2 to 5 on 01.4.2001. Further it is stated thatrespondents 2 to 5 executed a rental deed in his favour. As per the terms andconditions as agreed a sum of Rs.10,000/- has to be paid as rent per monthand the tenancy was fixed for 11 months. It was also agreed that after theexpiry of the period of 11 months the petitioner can continue as a tenant onthe payment of enhanced rent at the rate of 10% per annum on the thenexisting rent as such the tenancy is still subsisting till today. Further it isstated that on 04.5.2006 petitioner received a notice from Smt.Jhansi Rani,Advocate stating that the petitioner have to deliver the vacant physicalpossession of the petition schedule property by 11.6.2006. The said noticewas a rude shock to him as the petitioner have never defaulted in thepayment of the rent or in the payment of electricity charges or property cessetc., to the respondents 2 to 5. Further it is stated that since May 2005, therespondents 2 to 5 are trying to take physical possession from the petitionerillegally in respect of the petition schedule property. Further it is stated thaton enquiries the petitioner came to know that the respondents 2 to 5 with aview to evict him illegally and unauthorisedly have shown the petitionschedule property as mortgaged property with the 1[st] respondent and said tohave been obtained some loan. The said respondents 2 to 5 became thedefaulters to the said loan willfully and deliberately to see that the petitionercould be evicted which otherwise could not be possible except without dueprocess of law. The petitioner came to know that the respondents 2 to 5 havesufficient means and capacity to pay the amounts taken by them from the firstrespondent, but clandestinely became defaulters. However, the petitionerhave nothing to do with the transaction held between the first respondent andthe respondents 2 to 5 nor the petitioner as a party to that transaction. Further

it is stated that with great difficulty the petitioner pursued the matter withSmt.Jhansi Rani, Advocate, who had handed over him a notice said to havebeen issued by the first respondent as against the respondents 2 to 5 underSection Sarfaesi Act of 2002. It is stated that the petitioner is a lawfulphysical possession of the property in the capacity of tenant and thepetitioner have statutory right to remain in the property until and unless thepetitioner evicted by due process of law. Further certain submissions weremade in paras 9, 10, 11 and 12 of the affidavit filed in support of the writpetition.

6. In the counter-affidavit filed by the Senior Manager of respondentNo.1 specific stand had been taken that the writ petition is a misconceivedone and liable to be dismissed. It is stated that at request of M/s Chunnilal &Sons, a partnership firm represented by its partners, the respondent BankM.J.road branch sanctioned Open Cash Credit facility of Rs.15,00,000/- in2202 and the said limit was renewed in 2003 and fresh facility ie., Clean BillsPurchase Limit of Rs.5,00,000/- was sanctioned in 2003 to meet the workingcapital requirements. The Primary security was hypothecation of stocks ofPatrol, diesel and other oils. They have executed necessary documents andavailed the said facilities. As security for repayment of the said facilities therespondent Nos.2 to 5 who are no other than the partners of the said firmoffered the property bearing M.C.H.No.21-6-732 to 737 belonging to them assecurity. They have vide letter dated 1-3-2002 declared that they are theabsolute owners of the said property and no one else interested therein andthe said property is free from encumbrances. On the basis of the saiddeclaration and physical verification of the property, our Bank accepted thesaid property as security and the respondent Nos.2 to 5 created mortgage over the said properties on 16.5.2002 by depositing the original title deedsrelating to the said properties. It is also averred that as the borrower andrespondents 2 to 5 failed to liquidate the liability under OCC and CBP facilityin accordance with the agreed terms. The respondent Bank was constrainedto classify the account as NPA. The respondent bank was constrained toissue notice on 18.1.2005 under Section 13(2) of the Securitisation Act, 2002demanding the borrower and respondent Nos.2 to 5 to pay Rs.20,93,409.38. The borrower and respondent Nos.2 to 5 received demand notice, but failedto pay the amount demanded in the notice. However the borrower madecertain part payments. Since the borrower failed to pay the liability, theAuthorised Officer of the respondent bank along with the Manager visited theMortgage premises and tried to take possession of the property. Therespondent Nos.2 to 5 were not co-operative in handing over the possessionand refused to deliver peaceful possession of the property. The respondentbank was constrained to file Cr.M.P.No.1732/2006 before the Hon’ble ChiefMetropolitan Magistrate, Hyderabad under section 14 of the SecuritisationAct, 2002 seeking the assistance of the Hon’ble Chief MetropolitanMagistrate, Hyderabad for taking possession of the properties. The Hon’bleChief Metropolitan Magistrate, Hyderabad appointed Smt.K.Jhansi Raniadvocate as Commissioner to take possession of the mortgage assets andhand over the same to the Authorised Officer of the respondent bank. Thesaid advocate Commissioner visited the premises to take possession. Therespondent Nos.2 to 5 set up the petitioner as tenant in shop No.21-6-734and prevented the commissioner from taking possession of the property. Then the advocate Commissioner issued notice dated 04.5.2006 fixing thedate of execution of warrant on 11.6.2006. Further it is stated that the

borrower approached the respondent bank vide letter dated 22.5.2006 with acompromise proposal to pay Rs.1,00,000/- towards full and final settlementand offered to pay the same in 8 instalments. Since the offer was too lowcompared with the liabilities, the offer was not accepted. While the matterstood thus, respondents 2 to 5 with collusin of petitioner, got filed the presentwrit petition with false allegations. It is stated that under Section 14(2) of theSecuritisation Act, the District Magistrate or Chief Metropolitan Magistratemay take or cause to be taken such steps and use or cause to be used suchforce, as may in his opinion may necessary as per Section 14(3) of the Act,‘No act of the District Magistrate or Chief Metropolitan Magistrate, done inpursuance of this section in any court or before any authority’. Further it isstated that the execution of warrant by Advocate Commissioner is only thelikely action and that the petitioner indirectly he is challenging thesecuritisation proceedings in the present writ petition. It is stated that underSection 17 of the Securitisation Act an appeal lies before the Debts RecoveryTribunal to any party who is aggrieved by the action taken by the AuthorisedOfficer under the provisions of the Act. The alleged lease deed is an antidated and fabricated deed created with a malafide intention to file the presentwrit petition. The said deed is also hit by the provisions of Section 17(d) ofthe Registration Act as amended by A.P. for want of registration and cannotbe looked into. Further it is stated that if really the tenancy pleaded by thepetitioner is true, the petitioner ought to have filed the documents relating toTDS (Tax deducted at Source) of Income Tax, while making the payment ofrent under the provisions of Income Tax Act. Further specific stand had beentaken that the petitioner is an effective under the provisions of the Act andhence the petitioner cannot invoke the extraordinary jurisdiction of this court under Article 226 of the Constitution of India.

7. In the light of the respective stands taken by the parties and also thematerial placed before this court, and in view of the factual controversy, whichhad been averred in the respective counter-affidavits by the parties,especially, in the light of the stand taken by the petitioner pleading tenancyand also in the absence of any other material placed before this court by anyof the respondents, this court is of the considered opinion that it is a fit matterwhere the petitioner may have to invoke the alternative remedy by way ofappeal. Hence, in view of the facts and circumstances, the writ petitioner isbeing given liberty to avail the alternative remedy, of appeal if he is soadvised.

8. With the above observation, the writ petition is hereby dismissed. No order as to costs.

26[th] December, 2007.

_________________

P.S.NARAYANA,J

PNV

Date:-12-2007