Chinta Venkateshwarlu and 2 others v. State Bank of India

Telangana HC21 Apr 2022WP/12264/2022

Case brief

AI extract

What is this about?

Petitioners challenged the respondent bank's attempt to take physical possession of secured property under the SARFAESI Act during a stay application pending before the Debt Recovery Tribunal. The Court directed petitioners to deposit Rs. 15,00,000 within thirty days to prevent further coercive steps, subject to the final outcome of the Tribunal's stay application.

What did the court decide?

Directed petitioners to deposit Rs. 15,00,000 within thirty days; respondent bank restrained from coercive steps pending deposit and Tribunal outcome.

Chinta Venkateshwarlu and 2 others Vs State Bank of… — Banking and Recovery | Telangana HC (2022)

¶1

¶2

HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction)

¶3

THURSDAY, THE TWENTY FIRST DAY OF APRIL TWO THOUSAND AND TWENTY TWO

¶4

PRESENT

¶5

THE HONOURABLE SRI JUSTICE UJJAL BHUYAN AND

¶6

THE HONOURABLE MRS JUSTICE SUREPALLI NANQA

¶7

I I

¶8

WRIT PETITION NO: 12264 OF 2022

¶9

Between:

¶10

1, Chinta Venkateshwarlu, S/o. Late Chinta^{Venkataiah,Aged 48 years,Occ.} business, All are Rl/o. Door No. 30-50, 50A,^Revenue Quarters,^{near Girinath} Hospital, Polytechnic college Road, Nandyal,^Kurnool District.

¶11

Chinta Srinivasulu, S/o. Late Chinta Venkataiah,^Aged 46^years,Occ. business,

¶12

Chinta Venkata Ramana, S/o. Late Chinta^{Venkataiah,0 Aged 44 years, Occ.} business, All are Fl/o. Door No. 30-50, 50A,^Revenue Quarters,^{near Girinath} Hospital, Polytechnic college Road, Nandyal, Kurnool^District.

¶13

...PETITIONERS

¶14

AND

¶15

State Bank of lndia, rep.by its Authorized^{Officer, Nandyal Bazar Branch, Nandyal,} Kumool District.

¶16

...RESPONDENT

¶17

Petition Under Article 226 of lhe Constitution of lndia^{praying that in the} circumstances stated in the^{affidavit filed therewith,the High Court may be} pleased to pass order or direction more particularly one in the nature of Writ of Mandamus or any other appropriate writ, by^{declaringthe action of the} respondent bank in trying to take^{physical possession of securedproperty} through the^proceedings in Crl.t\ilP^{No.'1 07/202'l} on^{the file Chief Judicial} Magistrate-cum-Principal Assistant Sessions^{Judge,Kurnool,initiated by the} respondent^pursuant to Possession^{Noticedated. 07.08.2019,even during} pendency of SA No.226 12021 on the file of DRT-2, Hyderabad filed by the petitioners, as illegal, arbitrary, unjust, unconstitutional and violation of provisions of ARFAESI Act and violation of^principles of^{natural justice and} consequently direct the respondent^not to take^{any coercive steps pursuantto} the Notices issued under the^provisions of SARFAESI^{Act againstthe petitioners} in respect of secured^property, even during^{pendencyof SA No.226 of 2021on} the file of Debt Recovery^{Tribunal-2,Hyderabad.}

¶18

¶19

l.A.NO:1^()F 2022

¶20

Pelition Under section i 5i cpc praying that in the circumstances stated in the affidavit fired in support of the petition, the High court may oe pleaseo to grant an extension of time of four months to pay balance amount oi R.. t o.oo lakhs as per orders dated. 1 1 .11 .2021 passed by Debt Recovery Tribunar-2, Hyderabad in SA No.22612021, pending disposal of ihe present writ fietition,

¶21

l.A.NO:2 t)F 2022

¶22

Pel ition Under Section 1 51 cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may n. p["..a t" stay all f,:rther proceedings in crl.Mp No.107t 2021 on the file chief Judicial Magistrat,:-cum-Principal Assislant sessions Judge, Kurnool, under Section 14 of SARFAE{jl Act initiated by the respondent pursuint to possession Notice dated: 07.08.20'9 rssued under Section 13 (a) of SARFAEST Act, even ouring jend;ncy of SA Nc,.226r 202i on the fire of DRT-2, Hyderabad riteo oy tne^"petition.o, pending clisposal of the present writ petition.

¶23

Counsel JFor the Petitioners : Ms.HAMSA DURGA PONNAM

¶24

Counsel lior the Respondents : NONE APPEARED 1

¶25

The Court made the following ORDER

¶26

¶27

/ ,//'(^ .// ,/

¶28

THE HONOURABLE SRI JUSTICE UJJAL BHTIYAN

¶29

AND

¶30

THE HONOURABLE MRS JUSTICE SUREPALLI NANDA WRIT PETITION No. 12264 of 2o22

¶31

ORDER: (Per Hon'ble Sd Ju-stice Ujjal Bhugan)

¶32

Fleard Ms. Hamsa Durga Ponnam, learned counsel for the petitioners.

¶33

Replying to the query put by us in our order dated 09 .O3.2022, learned counsel for the petitioners submits that auction sale schedulcd on 22.11.2021 did not materialize.

¶34

Be that as it may, from the materials on record, we find that petitioners as borrowers of the respondent had defaulted in loan repal,ment, for which respondent initiated procecdings undcr the Securitisation and Reconstruction of Financial Asscts and Enforcement of Security Interest Act, 2002 (brief1r, refcrred to hereinafter as the 'SARFAESI Act')

¶35

The outsLarrding clues has becn quantified at Rs.75.36 lakhs as on 30.09.2021. When sale notice dated 17.10.202 1 was issued proposing to hold auction sa,le on 22.1| .2021,

¶36

I ,

¶37

I t

¶38

I 2 UB,.I & SN, J W.P.No.12264 of 2022

¶39

petitioners approached the Debts Recovery Tribunal-lI, Hy,lerabad ('lribunal) by filing securitisation application un,ler Section 17 of the SARFAESI Act, which was registered as S.A.No.226 of 2021. An interlocutory application was a1s<r filed to stay the auction, which was registered as I.A.No.lg77 of 2027. Tribunal passed an order dated I 1.tl.2o2l giving lib,:rty to the respondent to proceed with the auction sale sclreduled on 22.L1.2O21, but not to confirm the sale in farour of the highest bidder subject to petitioners, ciepositing Rs.2O,OO,0OO.O0 in three installments - 1.1 installment of Rs.4,O0,O0O.O0 on the date of auction; 2nd installment of Rs.8,O0,0OO.O0 within two (02) weeks thereafter; and thc 3.a in:;tallment of Rs.B,OO,O00.0O within two (O2) u.eeks of deposit of 2"rt installment. Further, petitioners u,ere directed to deposit the equated monthly installments everv month u.ith the respondent from January, 2022 onr.vards.

¶40

¶41

Learned counsel for the petitioncrs submits that petitioners had deposited Rs.1 1,OO,OO0/- lr,ith rhe respondent, but couid not pay the balance amount ol Rs;.9,00,000.00 as directed by the Tribunal. This ,uvas on

¶42

3 UB,J&SN,J W. P. No. 1 2264 of 2022

¶43

account of ill-heaith of their mother, rr",hich required hospitaiisation and also because of financiat distress due to the COVID-19 pandemic. She submits that ulrimately, the mother expired.

¶44

Today in the hearing, learned counsel for the petitioners have placed before us a Memo dated 06.04.2022 containing directions issued by the Chief Judicial Magistrate cum Principal Assistant Sessions Judge, Kurnool, directing the police to provide assistance to the Advocate Commissioner to break open the house lock of the petitioners. The Advocate Commissioner has been directed to submit compliance report on or before 24.06.2022.

¶45

\ q\ \

¶46

¶47

Learned counsel for the pctitioners submits that petitioners are in a position to deposit Rs. l5,O0,OOO.OO vvithin 3O days lrom today. Learned counsel for the petitioners also submits that even as on today, there is no Presicling Officer in the Tribunal. Therefore, petitioners are prcsently u.ithout any re medy.

¶48

I I

¶49

4 UB,J&SN,J W.P.No. 12264 of 2022

¶50

Having regard to the above, we direct that petitioners may deposit further alnount of Rs. 15,OO,OOO/with the respondent within a period of 3O days from today. Subject to such deposit, respondent is directed not to take further coercive steps against the petitioners, which in any event would be subject to outcome of S.A.No.226 of 2O21. However, we make it clear that if there is any default on the part of the petitioners in making the payment as above, resl>ondent would be at liberty to proceed for recovery of dues in a.ccordance with law.

¶51