V. RAMASUBRAMANIAN, J.

1. The Andhra Pradesh State Financial Corporation has come up with the above writ petition challenging the action of the Kotak Mahindra Bank (the first respondent herein) in invoking the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘SARFAESI Act’) against the borrower (3rd respondent herein), without their consent.

2. Heard Mr. Sudarshan Malugari, learned counsel for the petitioner, Mr. Rahul Sarella, learned counsel for the 1st respondent (Kotak Mahindra Bank), Mr. Rusheek Reddy K.V. learned counsel for the 2nd respondent (Jammu & Kashmir Bank), Mr. M. Srikanth Reddy, learned counsel for the 4th respondent (State Bank of India) and Mr. Srinivas Chitturu, learned counsel for the 5th respondent (IDBI Bank).

3. The petitioner is a State Financial Corporation established under the provisions of the State Financial Corporations Act, 1951. It is the case of the petitioner that the 3rd respondent company (M/s. Ameya Laboratories Limited formerly known as M/s. Anu’s Laboratories Limited) availed credit facilities from the petitioner Corporation and the 2nd respondent bank (J & K Bank) and created a pari-passu charge in favour of both of them, over certain immovable properties. A pari-passu agreement was entered between the petitioner Corporation and the 2nd respondent bank on 24.11.2006. After sometime, the 3rd respondent borrower closed its loan account with the 2nd respondent bank and hence the 2nd respondent forwarded all original documents to the petitioner Corporation, thereby making the petitioner Corporation the exclusive first charge holder.

4. The 3rd respondent borrower also borrowed term loan and working capital facilities from the ING Vysya Bank, which later got merged with the Kotak Mahindra Bank, which is the 1st respondent herein. Apart from ING Vysya Bank, the 3rd respondent also availed working capital loans from the State Bank of India, IDBI Bank and Karur Vysya Bank. At the time of sanction of the working capital loans, the petitioner was requested to issue a No-objection Certificate for the creation of a second charge in favour of the banks which advanced working capital facilities, including the 1st respondent bank.

5. It appears that during the period May, 2010 to July, 2010, a series of correspondence took place between the petitioner and the 1st respondent, requesting the petitioner to cede pari-passu charge over the immovable properties for the term loans advanced by the ING Vysya Bank and a second charge for the working capital advanced by them. According to the petitioner, they agreed in-principle (i) to cede pari-passu charge for the term loan and (ii) to allow the creation of second charge to secure the working capital, but it did not actually materialise. However, the 2nd respondent (J & K Bank) entered into a Memorandum of Entry of Record of deposit of title deeds on 15.12.2010. The case of the petitioner is that this Memorandum was executed without the consent and knowledge of the petitioner. Therefore, on the basis of the said Memorandum, the 1st respondent (Kotak Mahindra Bank) sought the permission of the petitioner to proceed against the borrower, on the ground that their account has become a Non-Performing Asset. But, the petitioner sent a reply denying the creation of a pari-passu charge in favour of the 1st respondent.

6. According to the petitioner, they independently initiated measures under the SARFAESI Act by issuing a demand notice on 16.01.2017 under Section 13 (2) followed by the taking over of symbolic possession on 19.05.2017. The petitioner claims that they also informed all the Banks about the steps taken by them.

7. However, the 1st respondent filed an application under Section 14 before the Chief Metropolitan Magistrate and secured an order. Immediately upon coming to k