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2020 Supreme(AP) 245
IN THE HIGH COURT OF ANDHRA PRADESH
RAKESH KUMAR, D.RAMESH, JJ.
Alla Sanyasi Rao, S/o Late Buchaiah – Appellant
Versus
The Bank of India – Respondent
W.P.No.43526 of 2017 and W.P.No.2855 of 2019
Decided on : 13-03-2020
Advocate Appeared:
For the Appellant : N. VIJAY
For the Respondent: T VIDYA RANI (SC FOR BOI) ,GP FOR REVENUE (AP), HARINARAYANA K, V V SATISH
Point of Law: Effective alternative remedy under the SARFAESI Act in terms of section 17 of the Act, instead of approaching the concerned Debts Recovery Tribunal, only filing writ petitions under 226 of Constitution of India is bad. Hence requested to dismiss the writ petition.
Headnote:
A.P.Urban Areas (Development) Act, 1975 - Section 12(2) - SARFAESI Act 2002 - Section 13(2)- Loan recovery – It is very clear that the petitioners took no steps whatsoever to pay the outstanding dues to the respondent Bank either by way of valid tender or move any application before this Court, even during pendency of the writ petitions, to permit them to deposit requisite amount, either in the concerned loan account or in the Court – Suffice it to observe that the petitioners for the reasons best known to them have not chosen to deposit the amounts in the loan account or attempted to seek permission from the Courts to deposit the loan amount – Held, it is very clear that the petitioners took no steps whatsoever to pay the outstanding dues to the respondent Bank either by way of valid tender or move any application before this Court, even during pendency of the writ petitions, to permit them to deposit requisite amount, either in the concerned loan account or in the Court -Suffice it to observe that the petitioners for the reasons best known to them have not chosen to deposit the amounts in the loan account or attempted to seek permission from the Courts to deposit the loan amount -
Facts of the Case:
Petitioners were partners among others of M/s. Lavanya Yamaha and they are dealers of Yamaha motorcycles besides running service centers at Ramnagar and Gopalapatnam. They obtained loan of rupees one crore and twenty five lakhs as working capital on 11.9.2003 from the Bank of India/first respondent and when they failed to repay the dues to the bank the loan amount declared as NPA on 30.4.2009 by following due procedure under SARFAESI Act 2002, following the notice issued by the bank on 26.11.2009. The petitioners were regularly paying loan amount to the respondent bank, however due to family problems and the business of the firm was not continued, subsequently notice under Section 13(2) was issued by the respondent bank and thereafter possession notices were also issued.
Finding of the court:
it is very clear that the petitioners took no steps whatsoever to pay the outstanding dues to the respondent Bank either by way of valid tender or move any application before this Court, even during pendency of the writ petitions, to permit them to deposit requisite amount, either in the concerned loan account or in the Court -Suffice it to observe that the petitioners for the reasons best known to them have not chosen to deposit the amounts in the loan account or attempted to seek permission from the Courts to deposit the loan amount.
Result: Writ petitions are dismissed.
ORDER:
D.Ramesh, J.
1. The brief facts in W.P.No.43526 of 2017 are as follows:
The petitioners were partners among others of M/s. Lavanya Yamaha and they are dealers of Yamaha motorcycles besides running service centers at Ramnagar and Gopalapatnam. They obtained loan of rupees one crore and twenty five lakhs as working capital on 11.9.2003 from the Bank of India/first respondent and when they failed to repay the dues to the bank the loan amount declared as NPA on 30.4.2009 by following due procedure under SARFAESI Act 2002, following the notice issued by the bank on 26.11.2009. The petitioners were regularly paying loan amount to the respondent bank, however due to family problems and the business of the firm was not continued, subsequently notice under Section 13(2) was issued by the respondent bank and thereafter possession notices were also issued.
It is stated that the agricultural lands of the petitioners were given as security. The 2nd respondent issued auction notice on 26.2.2015, where under the properties of the petitioners given as security for the loan, were sought to be auctioned. That the mortgaged lands are contiguous and are treated to be agricultural lands in the revenue records. The very fact that lands are described in acreage basis by itself would indicate that the same is being treated as agricultural lands. Hence the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is not applicable as mentioned in section 31 (i). It is further emphasized that these lands which are agricultural lands being the lands proposed to be auctioned are vacant as mentioned in the impugned sale notice, still the character of the land remains to be agricultural land. As the land given as security to the land is an agricultural land, the provisions of SARFAESI Act has no application and the impugned sale notice is without jurisdiction.
2. Alternatively, it is stated that the Government of Andhra Pradesh through Municipal Administration and Urban Development (H2) Department issued G.O.Ms.No.345 dt.30.6.2006 under Section 12(2) of the A.P.Urban Areas (Development) Act, 1975 modifying the Zonal Regulations and land use plans where under the lands proposed to be auctioned were ear marked for residential use. It is submitted that the market value guidelines issued by the Stamps and Registration Department w.e.f. 01.4.2013, the basic unit rate per square yard for the land in Narava village was fixed at Rs.2,500/-per square yard and the basic unit rate of Rs.2,500/-per square yard is grossly low and it does not reflect the true market value of the land as neighboring lands which are at a distance of less than one kilometer on either side from the lands of the petitioners, the basic unit per square yard is fixed at Rs.8,000/-per square yard. Hence the reserve price in the impugned auction notice i.e. Rs.5,02,80,000/-for all the four properties is very low.
3. The reserve price fixed in the auction notice for all four properties i.e. item no.1(Ac.3.04cents), item no.2(Ac.2.00cents), item no.3(Ac.2.09cents) and item no.4(Ac.1.25cents) even though the properties are independent to each other, the reserve price fixed for the entire land as a whole is impermissible under Rule 8(5) of SARFAESI Act and the Rules 2002.
4. Auction was conducted on 31.3.2015 and the respondent no.4 in whose favour the sale was confirmed, did not pay the sale amount due to the bank within the time prescribed under the Rule 9(3) and 9(4) of SARFAESI Rules 2002. As per the unamended Rules, the sale amount has to be paid within time prescribed under Rule 9(3) and 9(4) of the Act. In the event of failure by the bidders, the bank does not have jurisdiction to extend the statutory time fixed under the Rules. Further no consent was taken from the petitioners for extension of time for payment of balance sale consideration.
5. The respondent no.4 did not pay the sale amount due to the bank within the time prescribed, the sale certifi
