The petitioner, which is a bank, files this revision under Article 227 of the Constitution of India assailing the correctness of the orders dismissing an application filed by it purportedly under Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (For brevity 'SARFAESI Act') as per the orders in I.A.No.554 of 2007 in I.P.No. 15 of 2007, dated 8-10-2007, on the file of the I Additional Senior Civil Judge, Guntur.

2. The brief account on the back, which gives rise to the present proceedings are that the respondent NO.1 herein has filed a petition purportedly under Section 10 of the Provincial Insolvency Act, 1920 to adjudicate him as an insolvent showing that there exists liabilities to a tune of RS.3,37,83,000-00 to different individuals including the petitionerbank. In the schedule B attached thereto the immovable property belonging to him is shown as items NO.1 to 3. The said petition was filed on 13-4-2007 and was registered on 17-4-2007 in the Court below. Since the petitioner bank was added as a party respondent, notice was sent to the petitioner and it was served on the petitioner on 31-5-2007.

3. Subsequently, on 7-6-2007 the petitioner had issued the notice purportedly under sub-section (2) of Section 13 of the SARFAESI Act, which was received by the respondent NO.1 on 12-6-2007. The petitioner got published the same in the newspapers on 13-7-2007 and 14-7-2007. However, there appears no response or any reply by the respondent NO.1.

4. While the matter stood thus, since the Official Receiver appointed in the impugned insolvency petition, who is added as 2nd respondent herein has taken over the properties above mentioned at items 1 to 3 under schedule-B, the present application has been filed by the petitioner for a direction to the Official Receiver to remove the seals against the item No.1 of the schedule B property. The case of the petitioner in brief was to the effect that the respondent No.1 had availed a cash credit limit for his business carried out by him as a partner of M/s. Siva Computerised Printing Center on 16-10-2004 wherein his wife and son are the partners. The said loan of Rs.5,00,000/- is repayable with interest at 11.75% p.a compounded monthly and there is an outstanding of Rs.14,34,507 -01 ps. It is also the case of the petitioner that the respondent No.1 had availed a term loan towards the said business for a sum of Rs.22,00,000/- on the same date i.e., 16-10-2004 repayable with interest at 11.7% per annum compounded monthly and there exists debt balance of Rs.16,87,448/-. Further the 1st respondent also availed a housing loan of Rs.6,00,000/- on 9-9-2004 under loan account NO.350400084 with interest at 7.7% of which the outstanding balance is Rs.5,62,359/-. The respondent NO.1 had also obtained another house loan on 2-12-2004 for Rs.1,50,000/- under loan account No. 350400184, which is repayable with interest at 7.7% per annum and the balance as existed was Rs.1,38,959/-. It was submitted that at the timeof availing these loans the respondent NO.1 has created equitable mortgage of the said item NO.1 of the B Schedule as a collateral security and all the machinery movables, materials, stationary and other accessories situated in the said property are hypothecated to the bank. Therefore, it is the case of the petitioner that it is a secured creditor in respect of item NO.1 of B schedule property since it was exclusively mortgaged to it. Therefore, since these loans were not discharged, the petitioner is entitled to enforce the said security under the provisions of SARFAESI Act. The petitioner states that it has first charge over the said property and no other person can make any claim over the same. Therefore, the very proceedings as initiated against the petitioner under Provincial Insolvency Act, 1920 is not maintainable and the said item property could not have been included in the schedule nor can be proceeded against in tho