Dismissed

R.K Polymers v. Prithvi Asset Reconstruction And Securitization Company Limited

Telangana HC4 Aug 2021WP/11452/2021

Case brief

AI extract

What is this about?

Tenants filed a writ petition challenging a DRT order dismissing their interim application to stay physical possession of properties under SARFAESI Act. The court held that no jurisdictional error or illegality was shown and statutory remedy under Section 18 was available, dismissing the writ.

What did the court decide?

Writ petition disposed of; liberty granted to work out remedies under Section 18 of the SARFAESI Act.

R.K Polymers Vs Prithvi Asset Reconstruction And… — Banking and Recovery | Telangana HC (2021)

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HIGH GOURT FOR THE STATE OF^TELANGANA AT HYDERABAD

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(Special Original Jurisdiction)

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WEDNESDAY, THE FOURTH DAY^{OF AUGUST} TWO THOUSAND AND TWENTY^ONE

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PRESENT

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THE HON'BLE SRIJUSTICE A.RAJASHEKER^REDDY AND THE HON'BLE DR, JUSTICE SHAMEEM^AKTHER

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WRIT PETITION NO: 11452 OF 2021

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Between:

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R,K Polymers, Represented by its Managing partner P. Ravindernath, S/o. P Veeraiah, Aged about 40 Years, Occupation Business, R/o. D. No. 79, Plot No. 3, Ramchandrapuram Agraharam, No. 1053, Block No.9 and 10, Guntur District.

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Tirumala Roto Pack, Represented by its N,4anaging Partner P Ravrndernath, S/o. P Veeraiah, Aged about. 40 Years, Occupation Business, R/o. Shed No.3, Sy No. 78/1 , Kamha Seshaiah Ground, Guntapadu Road, Guntar District.

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Tirumala Poly Packs, Represented by its f,4anaging Partner P Ravindernath, S/o. P Veeraiah, Aged about. 40 Years, Occupation Business, R/o, D.No. 78/1 , Ramchandrapuram Agraharam, No. 1053, Block No. 4, Guntur District.

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...PETITIONERS

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AND

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Prithvi Asset Reconstruction And Securitizatjon Company Limited, a company incorporaled under ihe provision of companies act ,'l g56 having its Regd office D.No.1-55, Pajaprasadamu, 4th Floor,Wing-1, lVasjid banda Road, Kondapur,

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^{Hyderabad Representedby its Authorised Officer and vice president,}

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1. Karur Vysya Bank, Represented by its Authorised officer, Larapet Branch,Near Jinnah Tower Centre, Lalapet, Guntur.

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K.Sathyavathi Devi, W/o Kothuri Venkata vara prasada Rao Gupta , s/o. Kothuri Venkataratnam Aged about 60 years, Occ Business, R/o 3-29-39/H, Krishna Nagar, Guntur

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Gopu Krishna Raghvendra Gupta, S/o K Subramnyam Gupta Aged about 40 years, 0cc. B usiness, Rl/o. Barkatpura, Hyderabad

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Petition under Articre 226 of the constitution of rndia ,;;ffiifliI:T: circumstances stated in the affidavit filed therewith, the High court may be pleased to issue writ in the nature of Mandamus, declaring the order Dl.12lo4l2o2l passed in lA No. 67812021 in SA No.79/202i on the fire of Honorabre Debts Recovery Tribunal-2 Hyderabad as illegal, arbitrary and against the principres of naturar justice and also oppose to Articre 14 of constitution of rndia and consequentry ariow the lA No 67812021 in sA No.7gl2021 0n the file of Honorable Debts Recovery Tribunal-2 Hyderabad as prayed for.

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lA NO: 1 OF 2021

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Petition under Section 15i cpc praying that in the circumstances stated in the affidavit filed in supporl of the petition, the High court may be preased to stay a further proceedings, incruding taking physicar possession of the property through Advocate Commissioner letter dated 23-03-2021 by the Respondent No.1 in pursuance of orders in Crl N/p No. 1g/2021 and Crl N,4 p No, 8112021 of Honorable

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cJM-cuM-PASJ, Guntur,' by the Respondent No.1 in rescect of the schedure properties of the petitioners till the disposal of the present wril petition

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IA NO: 2 oF 2021

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Between:

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Prithvi Asset Reconstruction And Securitization company Limited, a company rncorporated underthe provision of companies act,1g56 havirg its Regd'office D.No.1-55, Pajaprasadamu, 4th Floor,Wing-|, Masjid banda Road, Kon"dapur, Hyderabad Represented by its Authorised Officer and vjce pre sident ,

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AND

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PETITIO N ERS/RESPON D ENT NO,1

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R,K Polymers, Represented by its Managing partner p. Ravindernath, S/o. p Veeraiah, Aged about 40 Years, Occupation Business, Ri,t. D. No. 79, plot No. 3, Ramchandrapuram Agraharam, No. 1053, Block No. 9 arrd 10, Guntur District.

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Trrumala Roto Pack, Represented by its l,4anaging Partner P Ravindernath, S/o. P Veeraiah, Aged about. 40 Years, Occupation Business, R/o. Shed No.3, Sy No. 7811 , Kamha Sebhaiah Ground, Guntapadu Road. Gunlar District.

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Tirumala Poly Packs, Represented by its Managing Partner P Ravindernath, S/o. P Veeraiah, Aqed about. 40 Years, Occupation Business, R/o. D.No. 78/1, Ramchandrapuram Asraharam, No 1 053, atock No ap$[!iilPl,l!iJ.r,r,o*.*,

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Karur Vysya Bank, Represented by its Authorised Officer, Lalapet^Branch,Near Jinnah Tower Centre, Lalapet, Guntur,

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K.sathyavathi Devi, W/o Kothuri Venkata vara Prasada^Rac Gupta,^S/o.Kothuri Venkataratnam Aged about 60^{years, Occ} Business,^{R/o 3-29-39/H,Krishna} Nagar, Guntur

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Gopu Krishna Raghvendra Gupta,^{S/o K Subramnyam Gupta Aged about 40} years,Occ. Business, R/o. Barkatpura, Hyderabad

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...RESpoNDENrs

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Petition under Section¹ 51 CPC^{prayingthat in the circ rmstances stated in} the counter affidavit filed.in support^{of the petition, the Highcourt maybe pleased} to vacate the lnterim orders dated^{2810412021passedin l.A No 1 of 2021 in W.P,} No 1145212021 and dismiss the WP^{with exemplary costs} Counsel for the Petitioneis: SRl.^{G K DESHPANDE}

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Counsel for the Respondent^{no.1:SMTV DYUMANI}

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The Court made the following: ORDER

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THE HON'BLE SRI JUSTICE A.RAJASHEKER REDDY AND THE HON,BLE DT. JUSTICE SHAMEEM AKTHER

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WRIT PETITION No.11452 OF 2021

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ORDER: (Per the Hon'bte Dr. Just ce Shameem Akther)

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This Writ Petition, under Article 226 of the Constitution oF India, is filed by the petitioners, wherein, the following prayer is made:

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"... to issue writ in the nature of Mandamus, declaring the Order Dt. 72-04-202t passed in IA No.678/2021 in SA No.79/202t on the file of Honorable Debts Recovery Tribunal-2, Hyderabad, as illegal, arbitrary and against the principles of natural justice and also oppose to Article 14 of Constitution of India and consequently allow the IA No. 67812O2l in SA No.7912021 on the file of Honorable Debts Recovery Tribunai-2, Hyderabad, as prayed for and pass such other order or orders..."

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Heard the iearned counsel for both sides and Derused the record

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3, The case and the contentions of the petitioners, in brief, are that they are the tenants of the subject properties, owned by the respondent Nos.3 and 4, by way oF registered lease deeds, dated 09.07.20L5, 01.10.2016, 0L07.2076, 01.05.2015 and 20.07.2077, and they are in possession of the subject properties. While so, on 23.03.2021, the officials of respondent No,1 along with Advocate Commissioner came to the subject properties for taking physical possession of the subject properties. When the petitioners enquired with the ofFicials of respondent No.1, they informed that respondent Nos.3 and 4 stood as quarantors for the loan availed by one 1.4/s. Vasavi Chillies from respondent No.2-Bank and offered the subject properties as security. The respondent No.2-Bank assigned

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the debt to respondent No.1.^{As the borrower or the gltarantorshave} not repaid the loan amount,^{the loan accountof the borrowerhas} become NPA and as such,^{proceedingswere initiat3d under the} Securitization and^{Reconstructionof FinancialAssets anl Enforcement} of Security Interest^{Act, 2002 (for short,'SARFAESIAct') and pursuant} to the same, the subject^warrant, dated^{22.03.2021, was issued to} take^possession of the^{subject propertles.Aggrievedby the same,} petitioners filed S.A.No.79 of 2021 before the Dt:bts^Recovery Tribunal-1I, Hyderabad. Along with the^{S.A., the petiti)ners filed the} subject 1.A.No.678 of 2021^{seekingstay of all furtherproceedings,} including taking physical^possession of the^{subject properties,} pursuant to the order passed in Crl.MP.Nos.1B of 2021 and B1 of 2021 by the Chief Judicial Magistrate -^cum -^{PrincipalAssistantSessions} Judge, Guntur. The Debts Recovery Tribunal-II,^{Hyderabad,vide the} impugned order, dated L2.04.2027, dismissed the^sa d^{subject I.A.} Hence, the^present Writ Petition.

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Learned counsel for the^petitioners would submit that^the petitioners are tenants of the subject properties by way of registered sale deeds executed by respondent Nos.3 and 4, owner:; of the subject properties. Since the subject properties are situated at Guntur and since no specific relief is sought in the subject S.A. in^respect oF^the measures initiated under Section 14 of the SARFAESI A,:t, the Tribunal came to the conclusion that it has no^jurisdiction tc entertain the subject I.A. and that^granting stay amounts to travelling beyond the relief sought in the subject S.A., and declined to grant the relief sought in the subject S.A., without^going into the mer ts of the case, which is erroneous. The finding of the Tribunal that it has no jurisdiction is against the provision under Section 17 l1A) (c) of the

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SARFAESI Act. Respondent No.1-assignee of respondent No.2-Bank, who lent money to the borrower, is situated at Kondapur, Hyderabad, and therefore, the Debts Recovery Tribunal-II, Hyderabad, has jurisdiction to entertain the subject i.A. The Tribunal had erroneously came to the conclusion that the petitioners being lessees subsequent to the mortgage of the subject properties to respondent No.2-Bank, they are not entitled to be served with any notice under Section 13 (2) and Section 13 (4) of the SARFAESI Act. Further, the petitioners are in possession of the subject properties by running business therein investing huge amounts and therefore, they cannot be evicted from the subject properties without following due process of law and ultimately, prayed to set aside the impugned order and allow the subject I.A. as prayed for.

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Smt. V. Dyumani, Iearned Standing Counsel for the respondent No.1, would submit that the subject properties are situated at Guntur and the petitioners are seeking stay of all further proceedings pursuant to the order passed in Crl.M.P.Nos.1B and B1 of 2021 by the Chief Judicial Magistrate - cum - Principal Assistant Sessions Judge, Guntur, as such, the Debts Recovery Tribunal-II, Hyderabad, has no jurisdiction to entertain the subject I.A. The petitioners are neither the borrowers nor guarantors for the loan sanctioned by the respondent No.2-Bank and as such, they are not entitled to file S.A. before the Debts Recovery Tribunal-II, Hyderabad, under Section 17 of the SARFAESI Act. The Tribunal rightly held that it has no jurisdiction to entertain the subject I.A. Further, no relief has been sought in respect oF the measures initiated under Section 14 of the SARFAE€I Act in the subject S.A. The registered lease deeds, relied upon by the petitioners/ were executed after the date of mortgage

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i.e., 04.02.2015.^{Further, againstthe interim orderpassed by the} Debts Recovery Tribunal,^{a statutoryappeal lies under Section1B of} the SARFAESI Act and^{withoutexhaustingthe said remedy,the} petitioners straight away filed the^{presentwrit Petition.There is no} irregularity or illegality^{in the impugned order and ultinrately,prayed} to dismiss the^{Writ Petition.}

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As seen from the material^{placedon record,the Tribunal,having} examined the contentions^{raised by both the sides, was pleased to} dismiss the subject I.A.^{vide the impugned order, dated 12.04'2027'} Though the^{petitioners have raised several contentionstouching the} merits of the case, as^{pointedout by the learned StandingCounselfor} the respondent No.1, a^{statutoryappeal lies underSer:tion1B of the} SARFAESI Act against^{the impugnedorder, dated L2.04 2021.}

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Here, it is apt to state^{that judicialreviewundet Article 226 of} the Constitution of^{Indiais directed,not againstthe dr:cision,but the} decision-making^{process.Administrative decisions;rre subjectto} judicial review under Article 226 of the Constitution ol India,^{only on} grounds of perversity,^patent illegality,^{irrationality,w,rntof power to} take the decision and^{proceduralirregularity.Excepton thesegrounds,} administrative decisions cannot^{be interferedwith. A decision is} vitiated by irrationality, if the^{decisionis so outrageous,that it is in} defiance of all logic;^{when no person acting reasonablycould possibly} have taken such decision. In^{the instant case, none of the contentions} raised on behalf of the^{petitionersdo establish any of the above} circumstances to^grant the^{relief sought by them. Nlo extraordinary} circumstances exist to deal^{with and determine the cc,rrectnessof the} impugned order, dated 72.04.2O2L^{Further, when a statutoryand}

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efficacious remedy is available to the petitioners by way of appeat under Section 18 of the SARFAESI Act, i t is not appropriate to go into the merits of the case. The petitioners a re granted liberty to work out the remedies available under Section 1B oF the SARFAESI Act before the appellate Tribunal in accordance with law.

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