G. Krishna Mohan Reddy

Writ Petition No.20579 of 2010 is filed to declare the action of the respondents in proceeding to take possession of the secured assets of the petitioners having obtained orders from the Chief Metropolitan Magistrate, Hyderabad under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (for short ‘the Act’) without considering the representation of the petitioner therein and without issuing any notice to them under Section 13(2) or Section13(4) of the Act respectively as illegal and arbitrary and also direct the respondents not to dispossess the petitioners from the secured assets respectively.

Writ Petition No.14487 of 2011 is filed to declare the action of the respondents to take possession of the secured assets of the petitioners having obtained orders from the Chief Metropolitan Magistrate, Hyderabad under Section 14 of the Act, without considering the representation of the petitioner therein, pursuant to the issuance of notice under Section 13(2) of the Act and without issuing any notice to them under Section 13(4) of the Act respectively, as illegal and arbitrary and direct the respondents not to dispossess the petitioners from the secured assets respectively.

The background facts which lead to the filing of the writ petitions are as follows:

The 1st petitioner in W.P.No.20579 of 2010, for business, availed loan facility of Rs.20,00,000/-vide Trade Account No.4008 0611 1000 029 from the respondent Bank. The Respondent Bank also extended similar loan facility to the 2nd petitioner for its business. One Smt.Sulochana stood as guarantor for both the loans. All of them mortgaged their residential houses as securities to repay the loan amounts. On the ground that the loan facilities became non performing assets (NPA), demand notice dated 7.1.2010 was issued under Section 13(2) of the Act. Apart from that the respondent Bank obtained order dated 15.7.2010 from the Chief Metropolitan Magistrate, Hyderabad under Section 4 of the Act to take possession of the property. The petitioners claim that they could not pay the loans payable by them and therefore they approached the legal heirs of Smt.Sulochana and informed them about their difficulty, for which her legal heirs agreed to handover their property to the respondent Bank for the purpose of selling the property to clear the loan amounts. Accordingly her legal heirs wrote a letter to the respondent Bank with a request to take necessary action under Section 13(3A), which has not been considered. It is also their claim at the outset that no notice was issued to them under Section 13(2) or Section 13(4) of the Act, but surprisingly the respondent Bank obtained order dated 15.7.2010 under Section 14 of the Act and has been taking steps to take possession of their properties. Hence, in this writ petition the petitioners assail the impugned order passed under Section 14 of the Act on the ground that the order was passed without taking any steps under Section 13 (4) of the Act and also assail the consequential steps being taken to dispossess them from the properties. Ultimately, however, no dispute is raised about the issuance of Section 13(2) notice by reason which this factor need not be deliberated.

The petitioners in W.P.No.14487 of 2011, in order to purchase a residential flat, obtained housing loan from HDFC Bank at Basheerbagh for Rs.6,00,000/-which was scheduled to be paid in 180 equal monthly installments at the rate of Rs.7,539/-each per month and created secured asset of the same property for the repayment of the loan. However, on persuasion and assurance of the respondent Bank, the petitioners approached and were sanctioned a loan of Rs.9,00,000/-payable together with interest in monthly equal instalments @ Rs.9,945/-per month by the respondent Bank. An amount of Rs.6,06,453/-was disbursed to the petitioner by the respondent Bank consequently. Thereby the account of HDFC Ban