1. This Writ Petition is filed for a mandamus to declare initiation of proceedings under Section 32G of A.P. State Financial Corporations Act 1951 (for short "the Act") r/w. the A.P. Revenue Recovery Act, 1864 in respect of the properties of the petitioners, as illegal and arbitrary. The petitioner sought for a consequential relief of setting aside the demand notice vide reference No.SFC/RJY/SDT/2010-11, dated 21-3-2011.

2. The petitioners offered collateral securities for the loan borrowed by one Sri Attili Koteswara Rao, Proprietor of M/s. Goutami Textile Industries and Sales Corporation. The security offered by the petitioners comprises agricultural lands owned by them. The principal borrower failed to repay the loan amount. A demand notice prior to attachment of the immovable property in Form No.4 and recovery certificate dated 21-3-2011, were issued. Petitioner No.2 approached respondent No.1 with a letter on 2-4-2011 wherein he has undertaken to discharge the entire amounts due by 21-4-2011 and requested not to proceed further in pursuance of the demand notice. Later, the petitioners have approached respondent No.2 on 30-6-2011 with a request to permit them to pay Rs.16,00,000/-towards outstanding amount and have paid only Rs.4,00,000/- towards discharge of the said liability. Thereafter, the properties of the petitioners were attached and Form No.5 dated 6-8-2011 was issued. Apprehending that the respondents will proceed with the sale of the attached properties, the petitioners filed the present Writ Petition.

3. The main ground on which the petitioners have questioned the recovery certificate and attachment order is that the same were not preceded by a notice. At the hearing, Sri Dammalapati Srinivas, the learned counsel for the petitioners stated that under Section 32G of the Act, before the loan is recovered, procedure has to be prescribed by way of Rules and that in the absence of such Rules, recovery cannot be made. Alternatively, he has submitted that respondent No.1 has framed guidelines and according to the said guidelines, 15 days’ prior notice requires to be issued by the Managing Director of the respondents-Corporation for issue of certificate for recovering the dues of the Corporation as arrears of land revenue. The learned counsel for the petitioners submitted that no such notice has been issued.

4. Sri M.S. Ramachandra Rao, the learned Standing Counsel for the respondents-Corporation, stated that the demand notice prior to attachment of immovable property was issued in Form No.4 on 21-3-2011 and in response thereto the petitioners approached the respondents with an offer to make payment on or before 21-4-2011 and that having not honoured such commitment, the petitioners have once again approached the respondents with a fresh offer of payment of Rs.16,00,000/-. He therefore submitted that no prejudice is caused to the petitioners due to non-issue of notice before issuance of recovery certificate.

5. After carefully considering the respective pleas of the learned counsel for the parties, I am of the opinion that Section 32G of the Act is only an enabling provision which empowers the competent authority to prescribe procedure for recovery of loans. Even though specific Rules have not been framed, guidelines have been prescribed laying down the procedure for recovery of the loans. Undoubtedly, before the recovery certificate is issued, a notice needs to be issued to the person from whom recovery is sought to be made. In the present case, though such notice has not been given, as rightly contended by the learned Standing Counsel, no prejudice is caused to the petitioners because in response to the attachment notice issued following the issuance of recovery certificate, the petitioners have approached the respondents with an offer to make the entire payment on or before 21-4-2011. Even if notices were given prior to the issuance of the recovery certificate, that would not have made any difference in