Dismissed

SarepalliMukanda Lakshmi at Revella Swetha Arun v. State Bank of India

Andhra Pradesh HC15 Jun 2023WP/7301/2022

Case brief

AI extract

What is this about?

This order rejects a writ petition challenging a bank auction sale directed to the Debt Recovery Tribunal (DRT) rather than the High Court, finding the petitioner failed to prove the DRT rejected her application due to the Presiding Officer's resignation.

What did the court decide?

Writ petition dismissed; liberty granted to approach the Debt Recovery Tribunal, Visakhapatnam and file an application within four weeks.

SarepalliMukanda Lakshmi at Revella Swetha Arun Vs… — Cheque Dishonour | Andhra Pradesh HC (2023)

¶1

HON’BLE SRI JUSTICE U. DURGA PRASAD RAO AND HON’BLE SRI JUSTICE B.V.L.N. CHAKRAVARTHI

¶2

Writ Petition Nos.7301 of 2022

¶3

ORDER: ( Per Hon’ble Sri Justice U. Durga Prasad Rao)

¶4

The present writ petition is the second round of litigation, in earlier Writ Petition No.5356/2022 filed by the present writ petitioner, a division bench of this High Court passed the following order on 10.03.2022:

¶5

“The present writ petition came to be filed seeking issuance of a writ of mandamus declaring the action of the 1st respondent in issuing E-auction proceedings dated 09.03.2022, in respect of property in Item-1 of the preliminary decree in O.S.No.621 of 2005 on the file of Principal Senior Civil Judge’s Court, Vijayawada as illegal, arbitrary and violative of principles of natural justice and consequently to set aside the sale notice issued by the 1st respondent vide letter SARB/BSP 2021-2022/1946 under SARFAESI Act, 2002.

¶6

Today, when the matter came up for hearing, Sri S. Satyanarayana Moorthy, learned standing counsel for the respondent-bank, would submit that the auction scheduled to be held on 09.03.2022 took place and necessary proceedings to that effect will be issued in due course.

¶7

Recording the said submission, the writ petition is disposed of giving liberty to the petitioner to approach the Debts Recovery Tribunal, Visakhapatnam, seeking appropriate

¶8

::2::

¶9

relief, as the issue involves disputed factual aspects. There shall be no order as to costs.

¶10

As a sequel thereto, miscellaneous petitions, if any, shall stand closed”

¶11

2. The petitioner in her additional affidavit explained the

¶12

reason for her not availing the opportunity to approach Debts Recovery Tribunal (DRT), Visakhapatnam as directed by this Court in W.P.No.5356/2022. According to her, in compliance of the order dated 10.03.2022 in W.P.No.5356/2022, the petitioner’s husband Sri Arun Kumar went to DRT, Visakhapatnam on 15.03.2022 for initiating the proceedings. However, Sri Krishna Gopal Dwivedi, the Presiding Officer was adjourning all the matters to different dates on the ground that he tendered resignation to Finance Minister and therefore he cannot take up the cases came up for hearing. Since there was no other go, the petitioner filed the writ petition.

¶13

3. Now, in the present writ petition petitioner’s case is thus:

¶14

(a) One Sarepalli Venkateswara Rao was the owner of to an

¶15

extent of 262.7 Sq Yds, with G+2 building bearing No.12-2-14,

¶16

::3::

¶17

situated at Whynchpet, Vijayawada which he purchased under a registered sale deed dated 12.09.1967. He died on 17.10.2000 leaving behind his wife and 8 children i.e., 4 sons and 4 daughters of which the writ petitioner is one daughter. While so, one Sarepalli Sindhura the minor daughter of Sarepalli Srinivasa Rao and grand-daughter of S. Venkateswara Rao being represented by her mother filed O.S.No.621/2005 on the file of Principal Senior Civil Judge, Vijayawada seeking partition of the plaint schedule properties into 162 equal shares and allot 9 shares to her and put her in separate possession. Item No.1 of the plaint schedule property is the bone of contention now since the respondent No.2bank sold the said properties through respondent No.1 its authorized officer in public auction for recovery of its debts due from respondents 3 to 7 herein.

¶18

(b) Be that as it may, the further case of the petitioner is that

¶19

O.S.No.621/2005 was decreed in favour of the plaintiff therein and a preliminary decree was passed by the trial Court on 20.10.2008 as prayed for by the plaintiff.

¶20

::4::

¶21

(c) Mortgage loan was sanctioned on 30.01.2016 by the 2^nd respondent – bank to a tune of Rs.9,50,00,000/- to the 3^rd respondent – M/s Sai Meenakshi Steels represented by its two managing partners i.e., the 5^th respondent herein and late husband of respondent No.4 and father of respondents 6 and 7. Respondents 8 to 11 stood as guarantors and mortgaged item No.1 of the plaint schedule property stating that they succeeded the said property under a registered will dated 22.03.1996 executed by their late father.

¶22

(d) However, the said mortgage is not valid in the eye of law for the reasons that in respect of the same property a preliminary decree was already passed in the year 2008 in O. S No.621/2005 wherein the guarantors did not contest the suit and remain ex parte and their mother, who was the first defendant in the suit though took a plea that her husband executed the will in favour of her sons, but could not prove the will and therefore the trial Court discarded the said plea and granted a preliminary decree in favour plaintiff. Concealing these facts, the respondents 8 to 11 herein have collusively mortgaged the subject property in favour of the 2^nd

¶23

::5::

¶24

respondent and the 2^nd respondent declared the loan granted to respondent 3 as NPA and was ready to auction the subject property by issuing e-auction proceedings dated 09.03.2022. The petitioner who is one of the daughters of late S. Venkateswara Rao and one of the coparceners filed W.P.No.5356/2022 challenging the e- auction proceedings dated 09.03.2022. When the matter came up for hearing, the bank counsel reported that auction which was scheduled to be held on 09.03.2022 was taken place and further proceedings were followed up. On that, the Division Bench of this High Court gave liberty to the petitioner to approach the DRT, Visakhapatnam seeking an appropriate relief and as the Presiding Officer of the DRT, Visakhapatnam offered resignation and was not entertaining the matters, the petitioner filed the instant writ petition. Petitioner’s further case is that in the meanwhile since the respondent No.1 and 2 issued sale certificate in favour of respondent No.12, the said sale certificate is also challenged in the writ petition.

¶25

::6::

¶26

4. Respondent No.1 filed counter and additional counter inter

¶27

alia contending that the property was originally purchased by S. Venkateswara Rao under a registered sale deed dated 12.09.1967 and later by way of a registered will bequeathed all his properties including residential site with house under consideration to his sons i.e., respondents 9 to 11 herein with absolute title and later S. Venkateswara Rao died on 17.10.2000 and thereby respondents 9 to 11 obtained right, title, interest and possession over his properties. To clear the debts of their father they sold part of their property in an extent of 131.38 Sq. Yds of house site under a registered sale deed dated 10.05.2004 in favour of one Pediredla Venkata Ramana and his wife Anjali. Four years thereafter, in the year 2008 again respondents 8 to 11 have purchased the aforesaid property from P. Venkata Ramana and his wife under a registered sale deed dated 5.05.2008. Therefore, the property under consideration in an extent of 262.7 Sq Yds with old house was assessed in the name of aforesaid four brothers, in which they have clear, absolute, marketable title and possession. They have mortgaged the said property by standing as guarantors on behalf of

¶28

::7::

¶29

respondents 3 to 7. When the original borrowers failed to repay the loan, the 2^nd respondent took up the proceedings under SARFAESI Act and brought the same under public auction and sold on 09.03.2022 in favour of 12^th respondent on 14.03.2022. Sale certificate was registered in the name of auction purchaser i.e., the 12^th respondent. Though a preliminary decree was passed in the year 2008 no final decree petition was filed within twelve years but the same was filed on 29.09.2021 i.e., after initiations of proceedings under SARFAESI Act by the 2^nd respondent. The preliminary decree is not binding on the respondent bank as it was not a party therein. Respondents 8 to 11 who are the absolute owners of the subject property having mortgaged the same in favour of the 2^nd respondent, now colluded with the writ petitioner who is their sister and trying to defeat the rights of the respondent bank to recover its dues. Therefore there are crucial facts involved in the matter such as collusion between the respondents 8 to 11 and the writ petitioner and the validity of the will etc. Considering the same in the earlier W.P.No.5356/2022 another division bench of this Court directed the writ petitioner to approach DRT,

¶30

::8::

¶31

Visakhapatnam to seek appropriate reliefs but however, on a untenable ground that DRT was not functioning there, the petitioner again approached this Hon’ble Court with untenable pleas. It is submitted that the truth or otherwise of the controversial facts cannot be decided in the writ petition and therefore the writ petition may be dismissed.

¶32

5. Heard Sri V.S.R Anjaneyulu, learned counsel representing

¶33

Sri Vangala Sailaja, learned counsel for the petitioner and Sri S. Satyanarayana Moorthy, learned counsel for respondents 1 and 2 and Sri A.V. Kondiaha, learned counsel for respondent No.12.

¶34

6. Both the learned counsel reiterated their pleadings in their respective arguments. While it is the formidable argument of learned counsel Sri V.S.R. Anjaneyulu that way back in the year 2008 itself a preliminary decree was passed in favour of the plaintiff who is the daughter of 8^th respondent herein in O.S.No.621 of 2005 holding that the suit property belonged to late S. Venkateswara Rao and the plaintiff and defendants therein being his LRs were entitled to due shares and that the will dated 22.03.1996 could not be proved. The 2^nd respondent bank granted

¶35

::9::

¶36

loan in favour of respondents 3 to 7 long after the preliminary decree i.e., in the year 2016 on the strength of the mortgage created by respondents 8 to 11 herein in respect of 1^st item of plaint schedule property. The bank cannot sell the said property in public auction as the mortgagers i.e., respondents 8 to 11 had no exclusive and independent right, title or possession over the same to create a valid mortgage in favour of the 2^nd respondent. Therefore, such mortgage is subject to the preliminary and final decrees in O.S.No.621/2005. In spite of bringing the aforesaid facts to the notice of the 2^nd respondent by P. Varalakshmi, sister of the writ petitioner by way of a notice dated 09.11.2021, the 2^nd respondent nonchalantly proceeded with the auction which is unjust, illegal and invalid. He would submit that there is no limitation for filing final decree in a partition suit and therefore the 2^nd respondent cannot harp that the final decree petition is filed at a belated stage.

¶37

7. In oppugnation, Sri S. Satyanarayana Moorthy, learned

¶38

counsel for respondent 2 would submit that the writ petition is not maintainable in view of clear directions given by another Division Bench of this High Court in W.P.No.5356/2022 directing the

¶39

::10::

¶40

petitioner to seek her remedy before the Debts Recovery Tribunal, Visakhapatnam. He would vehemently argue that merely because the Presiding Officer of the DRT, Visakhapatnam had resigned and not entertaining the pending matters that does not mean that the DRT, Visakhapatnam was not entertaining the fresh matters which would be against law. Learned counsel argued that the petitioner has not produced any reliable material to show that indeed, the petitioner filed an application under SARFAESI Act and DRT, Visakhapatnam refused to receive and entertain. He would thus argue that at the first instance the present writ petition is against the directions of this Court in the earlier writ petition and hence not maintainable.

¶41

8. Nextly, while defending the action of the 2^nd respondent he would argue even by the time of filing the W.P.No.5356/2022, the respondent bank had scrupulously brought to the notice of earlier Division Bench that auction as scheduled on 09.03.2022 was held and subsequent proceedings were on the way. Considering all those aspects only the Court has directed the petitioner to approach

¶42

::11::

¶43

DRT, Visakhapatnam and therefore the petitioner cannot approach

¶44

this Court again which amounts to violation of earlier order.

¶45

9. With regard to the merits of the case learned counsel argued

¶46

that the mortgage in favour of the 2^nd respondent was validly created by respondents 8 to 11 as they are the owners of the subject property by virtue of registered will executed in their favour by their father and therefore the petitioner cannot question the same. Learned counsel for 12^th respondent supported the arguments of learned counsel for respondents 1 and 2.

¶47

10. The points for consideration are:

¶48

(1) Whether the present writ petition is maintainable in view of clear directions in the earlier W.P.No.5356/2022 ?

¶49

(2) If point No.1 is answered affirmatively, whether the auction sale and concomitant issuance of sale certificate by the 2^nd respondent in favour of 12^th respondent are legally valid in the light of the preliminary decree in O.S.No.621/2005 passed by learned Principal Senior Civil Judge, Vijayawada in respect of subject property ?

¶50

::12::

¶51

11. POINT No.1: We gave our anxious consideration to

¶52

respective arguments on this point. From the respective arguments some controversial facts would emerge. The daughter of 8^th respondent herein filed O.S.No.621/2005 seeking partition and allotment i.e., 9 out of 162 shares in plaint schedule property claiming that the suit properties were self-acquisitions of her paternal grand-father S. Venkateswara Rao. However, what is curious to note is that respondents 9 to 11 herein who are defendants 3 to 5 in the said suit though claimed to have succeeded the suit properties by virtue of registered will dated 22.03.1996 executed by their late father did not contest the suit to establish the said fact and remained ex parte. It was only their mother who was the first defendant in the suit set up a contention about the will and opposed the claim of the plaintiff. Since she failed to adduce any cogent evidence to prove the will, the trial Court discarded it and granted preliminary decree. It is not known why the defendants 3 to 5 who claim to be the legatees under the will did not contest the suit. Not only that out of 262 Sq. Yds. of house site and building obtained by way of registered will, respondents 8 to 11 sold

¶53

::13::

¶54

131.38 Sq. Yds of house site under a registered sale deed dated 10.05.2004 in favour of one P. Venkata Ramana and his wife Anjali and later in the year 2008 they re-purchased the said property from them under registered sale deed dated 05.05.2008. None of the other children of S. Venkateswara Rao questioned those transactions. When respondents 9 to 11 claim that they obtained the subject property under registered will and in exercise of right thereof sold a part of the said property to third parties and repurchased the same, it is incomprehensible as to why they did not contest the partition suit filed by their niece. Another controversial fact as argued by the learned counsel for respondents 1 and 2 is that though preliminary decree was passed in the year 2008, the plaintiff did not take steps to file final decree petition till 2021. True as argued by learned Senior Counsel Sri V.S.R Anjaneyulu and as was held by Hon’ble Apex Court in Shub Karan Bubna v. Sita Saran Bubna¹ no time limit was prescribed under Limitation Act to file final decree application in a partition suit. However, the timing of filing final decree petition is as intriguing aspect. The final decree petition was filed when the auction proceedings were 1 (2009) 9 SCC 689 = MANU/SC/1607/2009

¶55

::14::

¶56

initiated. Projecting all these aspects the respondent bank contends that there was a collusion between respondents 2 to 5, their mortgagors and their family members to scuttle the legitimate efforts of the bank to realize its dues. Though we do not make any remarks on the merits of the above contention, we must admit that controversial facts are involved in this case which require thorough enquiry and decision thereof, which is not plausible under writ jurisdiction. Perhaps in such consideration only, earlier Division Bench of this Court has directed the petitioner to approach the Debts Recovery Tribunal, Visakhapatnam to vindicate her rights.

¶57

12. Therefore, we deem it not apposite to decide such controversial questions of fact in this writ petition as against the intendment in the order in previous writ petition. We are not oblivious of the fact that the petitioner filed affidavit enclosing some material to show that her husband Sri Arun Kumar went to Visakhaptnam on 15.03.2022 to file an application under SARFAESI Act pursuant to the direction in W.P.No.5356/2022 but due to resignation of the Presiding Officer the matters were not taken up before the DRT, Visakhapatnam. A copy of the electronic

¶58

::15::

¶59

reservation slip shows that Sri Arun Kumar travelled from Vijayawada to Visakhapatnam on 15.03.2022 in Ratnachal

¶60

Express. Then a perusal of the cause list dated 15.03.2022 notified by DRT, Visakhapatnam shows that several matters were listed before DRT on that date. Then copies of “daily orders” dated 15.03.2022 in S.A Nos.164/2021, 165/2021, 166/2021 193/2020 and 117/2021 would show that those matters were posted to different dates on the ground that the Presiding Officer tendered his resignation to the Finance Minister and therefore he cannot hear those cases. These documents no doubt axiomatically manifest that on account of resignation said to be submitted by the Presiding Officer, the existing and pending matters were not taken up by him and they were posted to future dates. However these documents would not clinch that even the newly filed matters were also not accepted and returned by the DRT, Visakhapatnam during the relevant period. As such the petitioner has not produced any material to show that indeed the petitioner filed application under SARFAESI Act and it was rejected or returned.

¶61

::16::

¶62

13. In these circumstances, having regard to the facts involved in

¶63

this case, the writ petition is not maintainable, however, we deem it apposite to grant another opportunity to the petitioner to approach Debts Recovery Tribunal, Visakhapatnam and file an application to seek for appropriate reliefs by granting reasonable time. This point is answered accordingly.

¶64

14. POINT No.2 : Since the Point No.1 is held negatively, this

¶65

point cannot be taken up.

¶66

15. In the result, this Writ Petition is disposed of giving liberty to the petitioner to approach Debts Recovery Tribunal, Visakhapatnam and to seek appropriate reliefs as held in W.P.No.5356/2022 within four (4) weeks from the date of receipt of copy of this order, in which case the said Tribunal shall admit the matter filed by the petitioner and after affording an opportunity of filing counters by the respondents, and hearing both parties pass an appropriate order on merits expeditiously. No costs.

¶67

::17::

¶68

As a sequel, interlocutory applications pending, if any, shall

¶69

stand closed.

¶70

_________________________ U. DURGA PRASAD RAO, J

¶71

¶72

B.V.L.N. CHAKRAVARTHI, J

¶73