IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
P.V. SANJAY KUMAR, GUDISEVA SHYAM PRASAD, JJ.
J. VEERAIAH - Appellant
Versus
INDIAN OVERSEAS BANK - Respondent
Writ Petition Nos. 6089 and 6426 of 2016
Decided on : 04-07-2017
Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960 – Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Eviction – Tenant – Protection under Act - Five petitioners are the legal heirs of late Jalla Lachaiah and late Jalla Sattaiah. They claim to be co-sharers of the property in question. Petitioners 3 to 5 claim to be living in the said property along with the tenants. It is an admitted fact that late Jalla Sattaiah was a guarantor for the loan availed by M/s. Vasavi Enterprises, Hyderabad, the 2nd respondent in both writ petitions, from Indian Overseas Bank, Hyderabad, the 1st respondent in both cases. The said loan account was classified as a non-performing asset owing to the default committed in repayment thereof – Held, settled legal position that an order passed against a dead person would be a nullity if the legal heir of the dead person does not waive his right to have the same declared as such, would ensure to the benefit of the legal heirs of late Jalla Sattaiah in the present case. In the affidavit filed in support of W.P.No.6089 of 2016, they specifically stated that they were not bound by the order - Order secured by the 1st respondent bank under Section 14 of the SARFAESI Act is a nullity and cannot be executed against the legal representatives of late Jalla Sattaiah as they were not made parties to the proceedings and never had an opportunity to counter the same. The writ petitions therefore deserve to be allowed on this short ground and are accordingly allowed. Order dated 22.01.2016 in Crl.M.P.No.2976 of 2015 passed by the learned Chief Metropolitan Magistrate, Hyderabad, is set aside –Ordered accordingly
SANJAY KUMAR, J.
1. The petitioners in W.P.No.6426 of 2016, eight in number, claim to be the tenants in possession of the property bearing Municipal No. 13-4-752, Sabzimandi, Karwan, Mehdipatnam, Hyderabad. The original owners of the said property were late Jalla Sattaiah and late Jalla Lachaiah. The petitioners claim to have obtained lease deeds from late Jalla Sattaiah and the legal heirs of late Jalla Lachaiah. They claim protection under the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960.
2. The five petitioners in W.P.No.6089 of 2016 are the legal heirs of late Jalla Lachaiah and late Jalla Sattaiah. They claim to be co-sharers of the property in question. Petitioners 3 to 5 claim to be living in the said property along with the tenants. It is an admitted fact that late Jalla Sattaiah was a guarantor for the loan availed by M/s. Vasavi Enterprises, Hyderabad, the 2nd respondent in both writ petitions, from Indian Overseas Bank, Hyderabad, the 1st respondent in both cases. The said loan account was classified as a non-performing asset owing to the default committed in repayment thereof. The 1st respondent bank thereupon issued a demand notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), calling upon the 2nd respondent to repay the sum of Rs.6,00,05,867/-. Failure to comply led to measures being initiated by the 1st respondent bank under Section 13(4) of the SARFAESI Act.
3. The 1st respondent bank invoked the power of the learned Chief Metropolitan Magistrate, Hyderabad, under Section 14 of the SARFAESI Act to obtain possession of the secured asset, vide Crl.M.P.No.2976 of 2015. By order dated 22.01.2016 passed therein, the learned Chief Metropolitan Magistrate, Hyderabad, appointed an Advocate Commissioner to take possession of the secured asset and deliver the same to the bank. Pursuant thereto, the Advocate Commissioner issued notice dated 12.02.2016 informing the occupants of the subject property to vacate and hand over its possession to him. This led to the filing of these writ petitions.
4. The case of the petitioners in W.P.No.6089 of 2016, the legal heirs of the original owners, is that they were ignorant of the creation of the security interest over the property in question by late Jalla Sattaiah. They pointed out that the 1st respondent bank had filed O.A.No.1387 of 2014 before the Debts Recovery Tribunal, Hyderabad, under the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, against Jalla Sattaiah and others and that the same was still pending. They claimed that during the pendency of the said O.A., it was not open to the 1st respondent bank to initiate measures under the SARFAESI Act. The third ground urged by them was that no notice had been issued to them individually in Crl.MP.No.2976 of 2015 and that the order passed therein by the learned Chief Metropolitan Magistrate, Hyderabad, was against a dead person, viz., Jalla Sattaiah, who had expired on 12.07.2015.
5. The petitioners in W.P.No.6426 of 2016 claimed that their tenancy rights were up to the year 2018 and that they could not be dispossessed from the property in question in the meanwhile. Copies of the unregistered lease deeds executed during the years 2012 to 2014 in favour of the eight petitioners were placed on record.
6. By interim order dated 29.02.2016 passed in W.P.No.6426 of 2016, this Court granted stay of delivery of possession by the petitioners therein subject to their depositing each month's rent with the 1st respondent bank on or before the 10th of the succeeding month, commencing from the month of February, 2016.
7. In its counter filed in W.P.No.6089 of 2016, the 1st respondent bank, speaking through its Assistant General Manager, Asset Recovery Management Branch, Regional Office, Hyderabad, stated as under: Late Jalla Sattaiah executed a guarantee deed on 25.03.2010 in favour of
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