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IN THE HIGH COURT OF ANDHRA PRADESH
SRI JUSTICE VENKATESWARLU NIMMAGADDA, J
K. Nagaraj, S/o. K. Subbappa – Appellant
Versus
A.P. State Financial Corporation Ltd. – Respondent
ORDER :
1. The writ petition is filed under Article 226 of the Constitution of India, claiming the following relief:
“To issue writ of mandamus, declaring the action of the 1st and 2nd respondents in issuing a notice for attachment (Form No.5) i.e AFC/RR AT/32G/AAR/716 dated 28.11.2019 attaching my property and also notices dated 05.11.2019 & 06.05.2019 as illegal, arbitrary and contrary to the provisions of the State Financial Corporations Act, 1951 and Andhra Pradesh Revenue Recovery Act, 1864 and violative of Articles 14 & 300-A of the Constitution of India and consequently direct the 1st and 2nd respondents to release my property mentioned, as it is illegal to keep it in their custody.”
2. The brief facts of the case are that, Respondent Nos.1 & 2 Corporation has sanctioned a Term Loan of Rs.30 lakhs on 28.11.2012 to Dr. A. Anusha Rani/Respondent No.3 under Practicing Doctor's Scheme to purchase medical equipment for Nursing Home. One third party Gundra Srinivasa Reddy S/o Sundara Rami Reddy, R/o Nellore offered his property admeasuring an extent of 458.72 sq.yds as collateral security, by depositing original title deed in respect of the property and created equitable mortgage in
The petitioner is liable for his wife's loan as per the Guarantee Agreement and cannot contest the attachment of his property, which is valid under the law.
A bank cannot exercise a general lien to retain title deeds for debts where the mortgagor is not a borrower and has cleared the outstanding loan.
A bank cannot retain a title deed for a different transaction not covered by the mortgage, and a formal agreement is necessary for guarantees.
Respondent-bank has committed an error by withholding the original documents of the petitioner in respect of the term loan of Rs. 9.80 lakh which is fully paid by the petitioner.
Point of law: rights of a secured creditor to realise secured debts due and payable by sale of assets over which security interest is created, would have priority over all debts and Government dues i....
The court established that a prior judicial attachment order supersedes subsequent government actions regarding property attachment under the relevant acts.
The SARFAESI Act, 2002 has overriding effect over state laws, ensuring secured creditors' rights are prioritized in debt recovery.
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