Telangana High Court
WP/34818/2023 of M/s. State Bank of India Vs Employees Provident Fund Organization on 31 December 2024
HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE THIRTY FIRST DAY OF DECEMBER TWO THOUSAND AND TWENry FOUR PRESENT THE HONOURABLE JUSTICE MOUSHUMI BHATTACHARYA WRIT PETITION NO: 34818 OF 2023 Between: M/s. State Bank of lndia, Stressed Assets
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HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD(Special Original Jurisdiction)
TUESDAY, THE THIRTY FIRST DAY OF DECEMBERTWO THOUSAND AND TWENry FOUR
PRESENT
THE HONOURABLE JUSTICE MOUSHUMI BHATTACHARYA
WRIT PETITION NO: 34818 OF 2023
Between:
M/s. State Bank of lndia, Stressed Assets Management Branch Representedby Mr. Chittem Ravi Shankar, Asst. Gen6ral Manger, Case Lead Officer andAuthorized Officer, At D. No. 5-9-76, 2nd and 3rd Floors, Prabhat Towers,Opp. SBl, Amaravati, LHO, Chappel Road, Hyderabad.
...PETITIONER
AND
Employees Provident Fund Organization, Regional Office, Represented byMr. K. Madhubabu, Recovery Officer, C/o Prashanti Nagar, TSRTC BusComplex, 1st and 2nd Floors Near Y Junction, Kukatpally, Hyderabad500008.
...RESPONDENT
Petition under Article 226 of the Constitution of lndia praying that in thecircumstances stated in the affidavit filed therewith, the High Court may becircumstances stated in the affidavit filed therewith, the High Court may bepleased to issue an appropriate writ of mandam.us /direction or any other order/orders declaring that the attachment orders issued bithe respondent'vide their refNo. RO/KKPiZonL-OIS+OSS/RRC|SO: 2017, Dt. 3OtO1l2O23 with intent to put thesame on auction of the 2 mortgaged properties i.e. i) Flat No.501 A on the 5thFloor of Subhan Srisampada, belonging to Mr. P. Vidya Sagaar and Flat No.501 Bon the 5th Floor of Subhan Srisampada, belonging to Mrs. P. Chandravathi asmentioned herein above and their sale auction notice virCe paper pub{ication onOgtOgt2O23 are illegal, unjustified, in violation of 0le [provisions ]of SARFAESI ACT2002 more particularly U/Sections 26E, 34 and 35 consequently setting aside theimpugned Letter 30/0'1i2023 and auction publication DT 0910912023.rh.1Forders declaring that the attachment orders issued bithe respondent'vide their refNo. RO/KKPiZonL-OIS+OSS/RRC|SO: 2017, Dt. 3OtO1l2O23 with intent to put thesame on auction of the 2 mortgaged properties i.e. i) Flat No.501 A on the 5thFloor of Subhan Srisampada, belonging to Mr. P. Vidya Sagaar and Flat No.501 Bon the 5th Floor of Subhan Srisampada, belonging to Mrs. P. Chandravathi asmentioned herein above and their sale auction notice virCe paper pub{ication onOgtOgt2O23 are illegal, unjustified, in violation of 0le [provisions ]of SARFAESI ACT2002 more particularly U/Sections 26E, 34 and 35 consequently setting aside theimpugned Letter 30/0'1i2023 and auction publication DT 0910912023.rh.1F
lA NO: 1 OF 2023
Petition under section 151 cpc praying that in the circumstances stated inthe affidavit fired in support of the petition, the High court may be preased to issueinterim stay/directions to the Respondent Suspending the attachment orders Dt.3010112023 and not to proceed with the intended auction to seil the schedureproperties, i.e. i) Frat No.5o1 A on the sth Froor of subhan srisampada, berongingto Mr' P. Vidya sagaar and Frat No.501 A on the sth Froor of subhan srisampada,belonging to Mrs. p. Chandravathi as per ref. No. RO/KKp/Zone_6/54095/RRCis0r201r. DT 3o/o1t2023, pubrished on 0910912023 in a dairy NewsPaper IANO:1O F 2024
Petition under Section 151 cpc praying that in the circumstances stated inthe affidavit fired in support of the petition, the High court may be preased tosuspend the Sale proclamation Notice bearingreferenceno.TS/RO/KKP/RECOVERY/54095I2023 _ 24 DT. 22tl3t2024issued bytheRespondents herein, pending disposal of the Writ petition.
Counsel for the [petitioner: ]SRI K. LAKSHMINARAYANA
counsel for the Respondent: sRr s. N. VEERENDER srNGH, c FoR EpFoThe Court made the following: ORDER
THE HON'BLE JUSTICE [MOUSHUMI ][BHATTACHARYA]
WRIT PETITION [No.34818 ][of ][2O23]
Counsel for [the ]PetitionerCounsel for [tlte ][resPondent]
: Sri K. I-alshminarayana.
: Sri S.N.Veerender [Singh,]Standing [Counsel ][for ][EPFO.]
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ORDER:
The petitioner [prays ][for a writ of ][Mandamus ][on ][the]
Conclusion
respondent/Employees' [Provident ][Fund ][Organisation ][(EPFO) ][for]tJle [respondent/EPFo ][from ][giving effect ][to ][a ][Public]restraining AuctionNoticedatedog.og.2o23forauctioningthepropertiesofM/s.Seed Innovations [Private ][Ltd']
2. The basis for [seeking ][the ][writ of ][Mandamus ][is ][that ][the]has [violated ][the ][provisions of The Securitisation ][and]respondent Reconstruction of [Financia-l ][Assets ][and ][Enforcement ][of ][Security]Interest Act, [2OO2 ][(the ][SARFAESI ][Act, ][2OO2)' The ][petitioner ][also]seeks setting aside [of ][a letter ][issued ][by the ][EPFO ][on ][3O'01'2O23]under section 88 [of ][The ][Employees' ][Provident ][Funds ][ald]MiscellaneousProvisionsAct,lg52(the1952Act)restrainingM/s.SeedlnnovationsPrivateLtd.fromtransferringitspropertywhich is a subject [matter ][of ][the ][said ][notice']
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W.P.No.348l8 of 2O23
3. The petitioner claims to be the lender to one M/s.Vibha AgroTech Ltd. pursuant to which several properties of M/s.Vibha AgroTech Ltd. were offered as security and were mortgaged in favour ofthe petitioner by the borrower - M/s.Vibha Agro Tech. Thepetitioner claims to have issued Possession Notice under section13(a) of the SARFAESI Act,2OO2 and took symbolic possession oftwo properties of M/s.Vibha Agro Tech. The petitioner's case isthat the impugned Public Auction Notice includes sale of the twoproperties which were mortgaged by M/s.Vibha Agro Tech infavour of the petitioner.
4. Learned counsel appearing for the petitioner was unable toshow any document with regard to the petitioner being themortgagee of the properties forming subject matter of the PublicAuction Notice or that the petitioner can claim any right undersection 26E of the SARFAESI Act, 2OO2 which gives priority to theright of the Secured Creditor over all other debts and revenuespayable to the Central or State Government. The only documentshown is a Memorandum of Entry d.ated, 26.12.2O 13 betweenM/s.Vibha Agro Tech arld SBICAP Trustee Company Limited f(
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MB'JW.P.No.34878 of [2023]
referring to the latter [as ][the Security ][Trustee' ][Counsel ][relies on ][a]Division Bench Judgment [of ][this ][Court ][in ][W'P'No'2O196 ][of 2019 ][to]urge the signihcance [of seclion ][26E ][of ][the ][SARFAESI Act' ][2QO2']
5. trarned counsel [appearing ][for the ][respondent/EPFO]submits that the [respondent ][was unable ][to ][conduct ][the ][auction]pursuant to the [impugned ][noLice ][since there were ][no ][interested]bidders. Counsel [in ][fact ][submits ][that ][the ][respondent ][failed ][even]in the second attempt [to hold ][auction']
6. Apart from the fact [that ][counsel appearing ][for the petitioner]was not able to [show ][any ][relevant ][fact ][or ][law ][on the ][subject ][in]of the [prayer ][for ][stalling ][tl.e ][auction, ][the ][writ ][petition]support deserves to be [dismissed ][on ][several ][glounds']
7 . First, although the [petitioner claims ][to ][have ][a ][security]interest on the [properties ][of ][M/s'Vibha ][Agro ][Tech ][under ][a]the [said ][M/s.Vibha ][Agro Tech ][has ][not ][been made ][a]mortgage, party to the writ petition- [The petitioner has failed ][to ][bring ][any]documentonrecordtoestablishthefactofanexistingsecurityinterest in [favour of ][the ][petitioner ][which the ][petitioner ][would ][have]priority over all other [claims.]
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W.P.No.34878 of 2023
8. The petitioner has also not explained as to why the petitionerwould seek to set aside the impugrred notice issued by ttre EpFO toone M/s.Seed Innovations Pvt. Ltd. on 3O.O1.2O23 or the nexusbetween the said notice and the petitoiner's alleged securityinterest over the properties of M/s.Vibha Agro Tech.
9. Similariy, tle petitioner has failed to show any connectionbetween M/s.Vibha Agro Tech and M/s.Seed Innovalions privateLtd. which would persuade this Court to set-aside the impugnedPublic Auction Notice. This lack of clarity is fatal to the prayerssought for in the writ petition and disentitles the petitioner to anyrelief- lO. Above all, the impugned Public Auction Notice datedO9.O9.2O23 announced the date for the public auct_ion on14.09.2023. The petitioner filed the writ petition ot t6.72.2O23i.e., more than three months after the day on which the publicauction was scheduled to be held. The other document againstwhich the petitioner seeks to rely is dated 30.01.2023. Hence, ttrewrit petition was frled eleven months after the aforesaid impugned II
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W.P.No.34878 of 2O23
document. The admitted delay [and ][laches ][on ][the ][part ][of ][the]petitioner also disentitles the petitioner [to ][any ][equitable relief']
11. Last but not the least, tJle [respondent's ][specific ][stand ][is ][that]the respondent could not [successfully ][conduct ][two ][successive]auctions in respect of the [disputed property.]
12. The above, [particularly, the ][last ][t\/o ][reasons ][make ][it ][clear]that the cause of action in [the ][writ ][petition ][does ][not ][survive ][any]more. The EPFO was due [to ][conduct auction ][on ][14.09.2023 and]the petitioner cannot [seek ][any ][relief ][against ][the ][impugned notice]in December, 2024. As on [date, ][there ][is ][no continuing ][cause ][of]action which the [petitioner can ][bring ][before ][this ][Court.]
13. W.P.No.34818 of 2023, [along ][with ][al1]connectedis dismissed. [Interim ][orders, ][if ][any,]shall standapplications, vacated. There shall be no [order ][as ][to ][costs-]
SD/.K, SREE RAMA MURTHYASSISTANT REGISTRAR
//TRUE COPY//
SECTION OFFICER
To,1. One CC to Sri K. Lakshminarayana, Advocate [OPUC]2. One CC to Sri S. N. Veerender'Singh, Advocatd topuel3. Two CD CopiesTJ/BSw I
HIGH COURT
DATED:31 11212024
ORDERWP.No.34818 of 2023
i'IN66-)I [J\N]+oA\oI+^[t]tDE51'[rh\]
DISMISSING THE WRIT PETITION
WITHOUT COSTS
@+t,