HON'BLE SRI JUSTICE A.RAJASHEKER REDDY
AND
HON'BLE DR.JUSTICE SHAMEEM AKTHER
W.P.No.16172 of 2019
ORDER: (per Hon'ble Sri Justice A.Rajasheker Reddy)
This Writ Petition is filed declaring the action of the 1st
respondent in proceeding against the property
admeasuring an extent of 400 sq.yds in Sy.No.181, Plot No.47A along with house bearing municipal No.22-311/14, situated at Addagutta Cooperative Housing Society, Kukatpally Village and Municpality, R.R.District (hereinafter referred to as 'the subject property') for recovery of the alleged dues of the respondent Nos.2 to 5 as untenable and arbitrary and consequently to set aside the E-auction notices dated 30.06.2019 issued in New Indian Express and Namaste Telangana Newspapers in respect of the subject property.
2. It is the case of the petitioner that herself and the 8th respondent are the joint purchasers of the subject property under registered sale deed dated 13.05.1994 vide document No.176/94 from Sri R.K.Gupta for valid consideration. After purchase of the same, both the petitioner as well as the 8th respondent constructed a building and gave the same on lease for running a school to the 7th respondent. While so, the petitioner as well as 2 8th respondent were served with Demand Notice on 10.09.2009 and possession notice dated 05.01.2010 and 12.04.2010 under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the Act of 2002') on the ground that the 1st respondent is the secured creditor, the 2nd respondent is the principal borrower and the respondents 3 to 5 are stated to be the guarantors for the loan availed by the 2nd respondent. Aggrieved by the same, the petitioner, respondent Nos. 6 to 8 filed S.A.No.129 of 2010 under Section 17 of the Act before the Debts Recovery Tribunal-I, Hyderabad, which was dismissed by order dated 08.12.2018. Aggrieved by the same, they preferred appeal before the Debts Recovery Appellate Tribunal at Kolkata vide Diary No.10 of 2019, which is pending.
3. It is further case of the petitioner that neither herself nor the 8th respondent availed any loan facility from the 1st respondent and that they are only third parties, unconnected with the loan availed by the 2nd respondent from the State Bank of Hyderabad, ICRISAT Branch, Patancheru, Medak District-1st respondent. The subject property was sold to the petitioner and 8th respondent much prior to the sanction of the loan by the 1st 3 respondent to the 2nd respondent, as such, the 1st respondent has no title over the subject property.
4. Since the subject property falls under urban area and the provisions of the Urban Land (Ceiling and Regulation) Act, 1976 (for short 'the Act of 1976') was applicable, the Special Officer and Competent Authority, Urban Land Ceiling issued a notice under Section 10(1) of the Act of 1976, which was published in the AP Gazette on 10.05.2004, wherein it is clearly mentioned that the land standing in the name of M/s.Addagutta Cooperative Housing Society Limited, admeasuring 3,57,058.32 sq.mtrs, is deemed to have been acquired by the State Government and vested absolutely in the State Government free from all encumbrances with effect from 19.05 2004. Even though there is no participation from the vendor of the petitioner i.e., from Mr.R.K.Gupta or respondents 2 to 5, the petitioner and 8th respondent made an application under Section 23(4) of the Act of 1976 to allot the excess land acquired by the State Government. The Government vide G.O.Ms.No.36 Revenue (U.C.IV) Department dated 12.01.2006 allotted the subject property to the petitioner and 8th respondent on payment of Rs.77,130/-. As such, the petitioner and 8th respondent are the owners of the subject property. 4
5. Counter affidavit is filed by the 1st respondent denying the averments in the affidavit filed in support of the writ petition stating that the subject property was mortgaged by late R.K.Gupta in the year 1989 by depositing original registred sale deed dated 25.11.1981 with the 1st respondent, during his lifetime and created security interest thereon, on account of the credit facilities availed by the 2nd respondent company. Late R.K.Gupta along with respondents 3 to 5 were the Directors of the 2nd respondent company and that late R.K.Gupta is the husband of 3rd respondent and father of respondents 4 &
5. Since the 2nd respondent company committed default in repayment of the outstanding loan payable to the 1st respondent, they filed a recovery case in OA No.1466 of 1999 (Old OA No.337 of 1989) on the file of Debts Recovery Tribunal-I, Hyderabad. During the pendency of the same, the petitioner, respondents 6 to 8 were impleaded as defendants 6 to 8, since they claimed to be the purchasers of plot Nos.47A and 57A of Addagutta Cooperative Housing Society situated at Kukatpally, Hyderabad. The petitioner and 8th respondent only contested the matter. The 1st respondent also initiated proceedings under the Act of 2002. Aggrieved by the same, petitioner and 8th respondent filed SA No.129 of 5 2010 on the file of Debts Recovery Tribunal-I, Hyderabad, which was dismissed by the Tribunal on 08.10.2018. Aggrieved by the orders dated 22.02.2019 in OA No.1466 of 1999 and orders dated 08.10.2018 in S.A.No.129 of 2010, the petitioner and the 8th respondent preferred appeals before the Debt Recovery Appellate Tribunal at Kolkata, which are pending, as such, the present writ petition cannot be entertained.
6. It is further averred that the subject property was mortgaged much prior to the purchase by the petitioner under a registered sale deed. The 6th respondent settled the claim with this respondent and got released the property from the mortgage under registered sale deed dated 23.08.1982. The security interest was created in favour of the 1st respondent by R.K.Gupta, father of respondents 4 & 5 confirming the deposit of original title deed by executing a letter of confirmation on 23.06.1989, but the petitioner and the 8th respondent claimed to have purchased the subject property through registered sale deed dated 13.05.1994, as such, the title acquired under the sale deed in favour of the petitioner and the 8th respondent is subject to prior charge and that the petitioner and the 8th respondent does not get any right, 6 title and interest over the subject property on mere payment of the amount to the government.
7. Heard Sri Vivek Jain, learned counsel for the petitioner and Sri G.Sanjeeva Reddy, learned Standing Counsel for the 1st respondent Bank.
8. Learned Counsel for the petitioner while reiterating the averments in the affidavit filed in support of the writ petition submits that since the neighbouring plot owner i.e., 6th respondent herein had settled the matter with the 1st respondent in the year 2015 for an amount of Rs.38,50,000/-, the petitioner also approached the 1st respondent for settlement and release of the subject property by giving an offer in the year 2017 on par with the 6th respondent. The said offer was not considered by the 1st respondent. Likewise, the petitioner again submitted another offer on 05.12.2018 for an amount of Rs.52,00,000/-, which was also rejected by the 1st respondent. Subsequently, the petitioner sent another proposal to the 1st respondent with an offer of Rs.1,00,00,000/- and also attached a cheque bearing No.113177 dated 08.07.2019 for a sum of Rs.10,00,000/-, which was accepted by the 1st respondent. However, without concluding the settlement, the 1st respondent 7 issued impugned paper notifications calling for auctioning the subject property, which is erroneous. The petitioner purchased the subject property much prior to the sanction of loan and that the same was also regularized under the Urban Land Ceiling At, which confers title on the petitioner by virtue of Sections 10(3) and 23(4) of the Act. Even though the appeals preferred against O.A No.1466 of 1999 and S.A No.129 of 2010 before the Debt Recovery Appellate Tribunal, Kolkata, but the same were not taken up as there is no Presiding Officer. When once the subject property comes under the Urban Land Ceiling Act and the same has been declared as excess, it vests with the Government and when the same is regularized in favour of the petitioner by the Government, by collecting amount, then the 1st respondent-Bank can no longer enforce the mortgage. In support of his contention, he relied on the judgment reported in V.Swarajyalaxi and others v. Authorized Officer, Land Reforms, Medak and others [(2003) 9 SCC 525].
9. On the other hand, Sri G.Sanjeeva Reddy, learned Standing Counsel for the 1st respondent submits that the petitioner assails only impugned sale notice dated 13.06.2019, but order of the DRT-I dated 08.10.2018 has not been challenged. He also submits that when once the 8 subject property is mortgaged prior to purchase by the petitioner, the same is a mortgaged property till it is discharged. The vendor of the petitioner has mortgaged the subject in the year 1989 whereas the petitioner purchased the same in the year 1994. Even though the petitioner and the 8th respondent approached the 1st respondent for One Time Settlement, the same could not be materialized, as the amount offered by them is on lower side. He also submits that since the petitioner and 8th respondent approached the Debt Recovery Appellate Tribunal at Kokkata against orders of the DRT-I, Hyderabad in OA No.1466 of 1999 and SA No.129 of 2010 by way of appeals, which are admittedly pending, the present writ petition is not maintainable.
10. In this case, it is to be seen that the petitioner and 8th respondents purchased the subject property from one Mr.R.K.Gupta, who was the director of the 2nd respondent company, husband of the 3rd respondent and the respondents 4 and 5 are his sons, through registered sale deed dated 13.05.1994 and that said R.K.Gupta along with respondents 3 to 5 are directors of the 2nd respondent company. Admittedly, the 2nd respondent being represented by the 4th respondent, obtained credit facilities from the 1st respondent by mortgaging the properties 9 including the subject property in the year 1989, by depositing the original title deeds through a letter dated 23.06.1989.
11. While so, when the 2nd respondent committed default in repayment of the loan amount, the 1st respondent filed OA No.1466 of 1999 before the Debt Recovery Tribunal-1, Hyderabad for recovery of the outstanding amount, wherein the petitioner and the respondents 6 to 8 were impleaded as defendants 6 to 8, claimed to be the purchasers of the subject property. The said OA was allowed on 22.02.2019. Aggrieved by the same, the defendants 6 to 8, (petitioner and respondents 6 & 8 herein) preferred appeal before the Debt Recovery Appellate Tribunal, at Kolkata, which is pending.
12. When the 1st respondent initiated proceedings under the Act of 2002, the petitioner and the respondents 6 to 8 herein preferred S.A.No.129 of 2010 on the file of DRT-I, Hyderabad, challenging the demand and possession notice dated 05.01.2010 and 12.04.2010 respectively, and the same was dismissed vide order dated 08.10.2018. Challenging the same, the petitioner and 8th respondent preferred appeal before the Debt Recovery Appellate Tribunal at Kolkata and the same is also pending. 10
13. It is pertinent to note here that the 6th respondent in the writ petition and the 1st applicant in SA No.129 of 2010, had settled the issue with the 1st respondent and got released the property in his favour by paying the amount requisitioned by the 1st respondent-Bank.
14. Learned counsel for the petitioner filed Memo dated 30.06.2021 stating that the petitioner had made certain representations including the latest representation dated 08.07.2019 offering to settle the issue with the 1st respondent by paying an amount of Rs.1,00,00,000/- (Rupees one crore only) along with cheque bearing No.113177 for a sum of Rs.10,00,000/- (Rupees ten lakhs only) and that the said amount was withdrawn by the 1st respondent-Bank, but the issue is not yet settled on the ground that the amount offered by the petitioner is on lower side when compared to the value of the subject property. It is specifically contended by the learned Standing Counsel for the 1st respondent that the amount offered by the petitioner and the 8th respondent are on lower side. It is contented by the learned counsel for the petitioner on 16.06.2021 that the petitioner will once again attempt to settle the issue with the 1st respondent for amicable settlement.
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15. Apart from filing appeals against orders in OA No.1466 of 1999 and SA No.129 of 2010 before the Debt Recovery Appellate Tribunal at Kolkata, which are admittedly pending, the petitioner and the 8th respondent are making efforts to settle the issue with the 1st respondent by negotiation.
16. It is vehemently contended by the learned counsel for the petitioner that the subject property has been declared as surplus land and that the petitioner and the 8th respondent have acquired the title over subject property from the Government by paying the amount, the 1st respondent Bank cannot enforce the mortgage by relying on the judgment of the Hon'ble Supreme Court in V.Swarajyalaxmi v. Authorized Officer, Land Reforms (supra), but said judgment is not applicable to the facts and circumstances of the present case on hand.
17. Since the petitioner and 8th respondents availed efficacious remedy of appeals before the Debt Recovery Appellate Tribunal at Kolkata against orders in OA No.1466 of 1999 and SA No.129 of 2010 apart from making efforts with the 1st respondent Bank for settling the issue, this Court is not inclined to entertain the writ petition. The petitioner and the 8th respondent are at liberty to raise all 12 the contentions raised herein before the appellate Tribunal at Kolkata, if the negotiations fail with the 1st respondent. However, this order will not preclude the 1st respondent in entertaining the offer made by the petitioner and the 8th respondent in settling the issue by accepting the offer.
Without going into the merits of the case, with the above observations, this writ petition is disposed of. Interim order granted on 31.07.2019 will continue for a further period of eight weeks enabling the petitioner to pursue his remedies before the DRAT. If petitioner fails to get any order within the aforesaid period, it is open for the respondent bank to proceed further in the matter, in accordance with law.
There shall be no order as to costs. As a sequel thereto, miscellaneous petitions, if any, pending in this Writ Petition, shall stands closed.
__________________________ A.RAJASHEKER REDDY, J _________________________ DR.SHAMEEM AKTHER, J Date:10.08.2021 kvs 13 HON'BLE SRI JUSTICE A.RAJASHEKER REDDY AND HON'BLE DR.JUSTICE SHAMEEM AKTHER W.P.No.16172 of 2019 Date: 08.2021 kvs 14