Smt. Bonthu Aruna vs M/S. State Bank Of India And 7 ...
2021 Latest Caselaw 2320 Tel

     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

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

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.

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

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,

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

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

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

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.

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.

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

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

HON'BLE SRI JUSTICE A.RAJASHEKER REDDY

AND

HON'BLE DR.JUSTICE SHAMEEM AKTHER

W.P.No.16172 of 2019

Date: 08.2021

kvs