Telangana High Court
Uco Bank And 2 Others vs Venkata Ramana Rao Maganti on 9 December, 2022
Bench: Ujjal Bhuyan, C.V. Bhaskar Reddy
THE HON'BLE THE CHIEF JUSTICE UJJAL BHUYAN
AND
THE HON'BLE SRI JUSTICE C.V.BHASKAR REDDY
Writ Appeal Nos.768 & 770 of 2022
COMMON JUDGMENT: (Per the Hon'ble the Chief Justice Ujjal Bhuyan)
Heard Ms. N.Shalini, learned counsel for the
appellants; Mr. Vikram Pooserla, learned counsel for
respondent No.1/writ petitioners; and Mr.G.Praveen
Kumar, learned Deputy Solicitor General of India for
respondent No.2.
2. UCO Bank and its officials are appellants before
us. Both the appeals have been filed assailing the common
order dated 12.10.2022 passed by the learned Single Judge
allowing writ petition Nos.17271 & 36901 of 2022 filed by
respondent No.1 in both the appeals as writ petitioners.
3. It may be mentioned that in Writ Appeal No.768 of
2022 arising out of W.P.No.17271 of 2022, Mr.Venkata
Ramana Rao Maganti is the respondent No.1/writ
petitioner whereas, in W.A.No.770 of 2022 arising out of
W.P.No.36901 of 2022, his wife - Mrs.Usha Rani Maganti,
is the respondent No.1/writ petitioner.
4. Both the writ petitions were filed by husband and
wife assailing the Look Out Circular (LOC) dated
07.11.2020 issued against them by the first appellant -
UCO Bank.
5. Respondents No.1 / writ petitioners as co-
applicant along with three other individuals, had availed
loans from the appellants to the tune of Rs.75,00,000/-,
each by offering property admeasuring 1.871/2 cents at
Nidamanuru Village, Delhi Public School, Vijayawada.
6. As there was default, appellants have initiated
proceedings against writ petitioners under the provisions of
Securitization and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (briefly 'the
SARFAESI Act' hereinafter). According to the writ
petitioners, appellants had offered one time settlement
(OTS) for an amount of Rs.3,75,00,000/- which have been
paid by them. However, according to the appellants, writ
petitioners are required to pay Rs.6,36,32,384.21.
7. Proceedings under the SARFAESI Act are still
pending before the Debts Recovery Tribunal, Hyderabad. It
is at this stage that the LOCs were issued.
8. Contending the same to be in violation of their
fundamental rights, more particularly, guaranteed under
Article 21 of the Constitution of India, the writ petitions
came to be filed.
8.1. It was contended before the learned Single Judge
that there are no criminal proceedings either instituted or
pending against the writ petitioners. Therefore, issuance of
LOC is wholly unjustified.
9. Learned Single Judge examined the entire issue as
well as the guidelines framed by the Government of India
dated 05.02.2017 regarding issuance of LOCs. Learned
Single Judge noted that admittedly there are no criminal
cases pending against the writ petitioners. Appellants had
issued LOCs only on the ground that writ petitioners are
defaulters of loan. Writ petitioners are intending to travel
abroad to see their grand children, aged about 2 years and
6 years respectively. Learned Single Judge further noted
that appellants were not in a position to explain as to why
the physical presence of the writ petitioners was necessary
for continuation of recovery proceedings and to recover the
amount claimed by appellants. In these circumstances,
learned Single Judge issued the following directions:
"i) Both the writ petitions are disposed of
with the following directions:
a) Look out Circulars (LOCs) both dated
07.11.2020 issued against the petitioners in both
the writ petitions by 1st respondent - Bank are
suspended for a period from 13.10.2022 to
30.11.2022.
b) Respondent bank shall
inform/communicate this order to the 4th
respondent - Immigration Bureau in terms of
Office Memorandum dated 22.02.2021.
c) Petitioners shall inform their
arrival/departure to the respondent - Bank in
terms of the aforesaid Office Memorandum dated
22.02.2021. Petitioners shall cooperate with the
respondent - Bank by furnishing the
information/documents if any as and when
required.
d) Respondent - Bank/Originating Agency
shall review both the Lookout Circulars (LOCs)
dated 07.11.2020 issued against both the
petitioners on quarterly and annual basis, submit
proposals if any immediately after such review in
terms of the said Office Memorandum dated
22.02.2021. Both respondents shall comply with
the guidelines issued by the Union of India vide
Office Memorandum dated 22.02.2021.
e) Liberty is granted to respondents to take
action against the petitioner in the event of
violation of any of the aforesaid conditions.
ii) In the circumstances of the case, there
shall be no order as to costs."
10. We see no error or infirmity in the views
expressed by the learned Single Judge. It is unfortunate
that appellants have decided to file the appeals against
such reasoned order of the learned Single Judge. Approach
of the appellants in not accepting reasoned judicial verdicts
and continuing to challenge the same being in a dominant
position cannot be appreciated. Such an attitude needs to
be changed by the appellants, more particularly, since they
are public sector undertakings. That apart, LOCs were
suspended for a period from 13.10.2022 to 30.11.2022,
which period had already expired.
11. In the proceedings held on 25.11.2022, we had
directed Regional Manager, UCO Bank to be present before
us and to answer queries of the Court pertaining to LOC.
12. In terms of our order, Mr.Sandeep Sharma,
Regional Manager is present before us. He submits that it
is only in the interest of the bank, the LOCs were issued.
On a query by the Court as to whether LOCs were issued
against all the loan defaulters, he submits that only in case
of persons committing economic offences, LOCs are issued
by the Bank.
13. We deprecate the approach of the appellants in
selectively issuing LOCs against two senior citizens who
have not only substantially complied in discharging the
loan amount but are also contesting the SARFAESI
proceedings before the Debts Recovery Tribunal.
14. In view of the above, both the appeals are
dismissed. Cost of Rs.50,000/- is imposed on Mr.Sandeep
Sharma, Regional Manager, UCO Bank, Hyderabad which
shall be recovered from him personally by the UCO Bank
and deposited before the High Court Legal Aid Committee,
Telangana within 60 days.
Miscellaneous applications pending, if any, shall
stand closed. However, there shall be no order as to costs.
______________________________________
UJJAL BHUYAN, CJ
______________________________________
C.V.BHASKAR REDDY, J
09.12.2022
MRM
