Chairman, A.P. State Financial ... vs Smt. M. Mahalakshmi, Chittoor Dist. 3 ...
2024 Latest Caselaw 7602 AP

Citation : 2024 Latest Caselaw 7602 AP
Judgement Date : 23 August, 2024

Andhra Pradesh High Court - Amravati

Chairman, A.P. State Financial ... vs Smt. M. Mahalakshmi, Chittoor Dist. 3 ... on 23 August, 2024

APHC0105155420                                                           Bench
     11                IN THE HIGH COURT OF ANDHRA PRADESH               Sr.No:-
                                    AT AMARAVATI                           14
                                                                         [3483]

                            WRIT APPEAL NO: 801 of 2011

The A.P. State Financial Corporation,
Rep. by its Chairman, 5-9-194,
Chirag Ali Lane, Abids,
Hyderabad - 500 001 and another.
                                                            ...Appellant(s)
      Vs.

Smt. M. Mahalakshmi, W/o. G.D.Gopi,
Aged 22 years, Occ: Housewife,
R/o. D.No.25-5-526, G.K.Nagar,
Reddygunta, Chittoor, Chittoor District and 3 Others.          ...Respondent(s)


                                      **********

G R SUDHAKAR, Y N Lohita, Advocate(s) for Appellant(s)

SYED KHADER MASTAN, Advocate(s) for Respondent(s)

CORAM : THE CHIEF JUSTICE DHIRAJ SINGH THAKUR SRI JUSTICE RAVI CHEEMALAPATI

DATE : 23rd August 2024

PER DHIRAJ SINGH THAKUR, CJ:

The present writ appeal filed under Clause 15 of the Letters Patent has

been preferred against the judgment and order, dated 07.07.2011, passed in

W.P.No.5458 of 2009.

2. By virtue of the judgment and order impugned, the learned single

Judge set aside the action of the Andhra Pradesh State Financial Corporation

in subjecting the land furnished by the guarantor as a collateral security by

HCJ & RC, J

invoking the powers under Section 29 of the State Financial Corporations Act,

1951 (in short, 'the Act of 1951'), on the ground that Section 29 of the Act of

1951 could not be invoked for proceeding against the securities offered by a

surety/guarantor and that it was only under Section 31(1)(aa) inserted in the

Act of 1951 by way of amendment Act No.43 of 1955 which provides the

remedy to the Corporation for enforcing the liability against such a

surety/guarantor. The view expressed has its basis in the Apex Court

judgment rendered in the case of Karnataka State Financial Corporation

Vs. N. Narsimahaiah and Others1.

3. Learned counsel for the appellants would submit that while the

position of law as settled by the Apex Court in the case of N. Narsimahaiah

was undisputed, yet it was urged that the petition ought not to have been

allowed inasmuch as the petitioners, according to the appellants herein, had

no locus to file the writ petition.

4. Learned counsel for the appellants would submit that the

property which was furnished as collateral security to the Andhra Pradesh

State Financial Corporation and for which the petitioners were claiming a right

and title based upon a registered Will dated 29.08.1998 was superseded by

another registered Will dated 09.07.2001 executed by the grandfather who

was the actual owner of the property in question.

(2008) 5 SCC 176

HCJ & RC, J

However, the issue of locus standi was dealt with by the learned single

Judge in the following words:

"As regards the allegation of the respondents that the petitioners lack locus standi to challenge the subject sale, it is to be noticed that the sale in itself is legally invalid in view of the law laid down in N. Narasimahaiah. It ill- behoves the APSFC, an instrumentality of the State, to seek to perpetuate what is now clearly established to be an illegal action by clutching at straws and assailing the petitioners' locus to challenge the same. The contention of the learned standing counsel that the petitioners must first get their title decided by the competent Civil Court and only thereafter assail the subject sale is therefore liable to be rejected. Once the petitioners are in a position to demonstrate even a modicum of a claim over the subject land, it would be sufficient for this Court to entertain their case, recognize the illegality committed by the APSFC and declare it as such. When faced with an order or action which is bereft of jurisdiction this Court is duty-bound to declare the same as such. Whether the petitioners can claim exclusive title under the Will dated 29.08.1998 or whether their father alone would be entitled to the subject land by the law of intestate succession is an issue which would have to be decided by the competent Civil Court, if the need arises. However, insofar as this case is concerned, whether the petitioners have a right to the subject land or even a part thereof, or whether their father alone is entitled to succeed are questions which are of no consequence in applying the law laid down in N. Narsimahaiah. Once the APSFC is found to have fallen foul of this judicial edict, such action cannot be sustained or permitted to continue on mere technicalities."

5. Having gone through the judgment and order impugned and

having heard learned counsel for the appellants, we find that, considering the

judgment of the Apex Court rendered in the case of N. Narsimahaiah, it is

clear that the appellant Corporation could not have invoked Section 29 of the

Act of 1951 for proceeding against the property furnished by the

guarantor/surety and that if at all the procedure prescribed under Section

HCJ & RC, J

31(1)(aa) of the Act of 1951 alone could have been resorted to. Even on the

question of locus standi, we feel that the view expressed by the learned single

Judge warrants no interference.

6. Be that as it may, we find no merit in the present appeal which is,

accordingly, dismissed. No costs.