JUDGMENT

K. Lakshman, J. - This Writ Petition is filed to declare the e-auction notice dated 03.06.2020 published by the respondent - Bank, proposing to conduct sale on 10.07.2020, as illegal.

2. Heard Sri Rapolu Bhaskar, learned counsel for the petitioners and Sri Meher Prasad, learned counsel for the respondent bank.

3. It is contended by Sri Rapole Bhaskar, learned counsel for the petitioners that they have availed a loan of Rs.2.00 crores from the respondent bank by executing all the necessary loan documents and creating equitable mortgage by depositing original title deeds of the properties. Since there was default in payment of regular Equal Monthly Installments (EMI) within the stipulated time, the respondent bank has declared the account of the petitioners as non-performing account (NPA). The respondent bank vide its letter dated 16.08.2018 has informed the petitioners that the petitioners are eligible for One Time Settlement (OTS) scheme of an amount of Rs.2,77,95,629/- subject to the terms and conditions stipulated in the said OTS proposal. Accordingly, the petitioners have submitted a letter accepting the said OTS proposal and paying 5% of the OTS amount i.e. Rs.14,00,000/-. The same was accepted by the respondent bank vide its letter dated 29.09.2018. As per the terms and conditions of the said accepted OTS scheme, the petitioners have to pay 20% of the OTS amount i.e. Rs.55,59,126/- within thirty (30) days i.e. 29.10.2018 and the balance can be paid within six months from the date of the letter. The petitioners have paid an amount of Rs.69,59,216/-, out of OTS amount of Rs.2,77,95,627/-.

4. It is further contended by the petitioners that since the petitioners failed to pay the OTS amount within the stipulated time mentioned, the respondent bank cancelled the said OTS vide its letter dated 03.04.2019. The respondent bank has also filed O.A. No.2793 of 2017 before the Debts Recovery Tribunal - I (DRT-I), Hyderabad, and the same was allowed. A recovery certificate was issued in favour of the respondent bank on 12.09.2018 by the DRT.

5. It is further contended by the petitioners that the respondent bank has issued sale notice dated 01.11.2019 by fixing the date of auction as 07.12.2019 without following the procedure laid down under Rules 8(6) and 9(1) of the Security Interest (Enforcement) Rules, 2002, (for short 'the SERFAESI Rules'). Therefore, the petitioners have filed an application under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the SERFAESI Act') vide SA No.320 of 2019 before the DRT-I, Hyderabad challenging the sale notice dated 01.11.2019. The petitioners have also filed I.A. No.3297 of 2019 to stay all further proceedings including dispossession of the petitioners or their tenants from the scheduled properties pursuant to the e-auction sale notice dated 01.11.2019. The DRT-I, Hyderabad vide order dated 11.12.2019 directed the respondent bank to maintain status quo pursuant to the auction conducted on 07.12.2019 in respect of the scheduled properties subject to the petitioners depositing a sum of Rs.75,00,000/- in three equal installments; 1st installment of Rs.25,00,000/- is directed to be deposited within one week from the date of the order, second installment of Rs.25,00,000/- within one week thereafter and the third installment of Rs.25,00,000/- within three weeks thereafter in no lien account with the respondent bank. It is also made clear by the DRT-I, Hyderabad in the order dated 11.12.2019 that if the petitioners fail to comply with any of the above conditions, the status quo shall stand vacated and the bank is at liberty to proceed further in accordance with law.

6. It is further contended by the petitioners that the petitioners have sent letters dated 11.02.2020 and 27.02.2020 to the respondent bank seeking time to pay the balance OTS amount and also enclosed Demand Drafts (4 in number) for an amount of Rs.2.00